In a press release published on 4 November, the steel giant notified the Italian government of its intention to break the contract. It came a day after a new law was passed by the government of the transalpine peninsula, impacting the environmental and industrial plan developed by ArcelorMitttal for Ilva.

Ilva, located in southern Italy, employs 8,000 staff and was placed in state administration in 2015. Last year ArcelorMittal began operating the heavily polluted plant, which it was due to buy outright, and promised to inject more than €1bn to bring it up to environmental standards.

The government’s promised legal shield would have given ArcelorMittal immunity from possible costly prosecution related to a clean-up plan for the plant, which has been blamed for hundreds of cancer-related deaths in the area.

But new measures would strip ArcelorMittal of this immunity. ArcelorMittal wrote:

"Effective on 3 November 2019, the Italian Parliament has removed the legal protection necessary for the Company to implement its environmental plan without the risk of criminal liability, thus justifying the withdrawal notice."

The steel giant also cited other "impossible to meet" prescriptions, which result in the closure of blast furnace 2.

ArcelorMittal wrote:

“Other serious occurrences, independent of the Company’s will, have also led to a situation of legal and operational uncertainty that has further significantly impaired the ability to carry out the necessary operations at Ilva and operate the Taranto plant."

The European Commission had obliged ArcelorMittal to divest of several of its plants, including one in Dudelange, to adhere to anti-competition rules. The sale of the latter plant has since been agreed with Liberty House Group.

Reuters cited a government source as saying that the Italian government would not let Ilva, one of Italy's largest industrial concerns, close.