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Half of production at the new ILVA will come from gas and we will make heavy investments, Jindal says

by Paolo Bricco

“The use of natural gas instead of coal in the iron and steel industry isn't an impossible fantasy. It's a technological and industrial reality that we've been implementing in our steel mills in India for a while. If we, along with the AcciaItalia consortium, are awarded Ilva, we will bring back Taranto's blue sky and clean air and eliminate harmful carcinogenic substances like PAHs (Polycyclic Aromatic Hydrocarbons) that result from the use of coal, thanks to our technical solutions based on natural gas such as (DRI/HBI)”. Sajjan Jindal, President of Jindal South West, talks about the Ilva dossier for the first time in this interview.

Jindal, 57, reveals that the project is an investment in Italy, not just in the company that's under special administration. “It's right for me to talk about what I call Vision Italia. So far we've never carried out an investment in Europe. We want to do so for the first time. With this transaction, we're entering the European market and betting on Italy for the experience that characterizes the workers in the Italian manufacturing sector.”

BRICCO: What industrial reasons brought you to approach this project?

JINDAL: First of all, the knowledge that Italy is one of the largest European steel markets, which still today has a potential of 30 million tons annually, and is a net importer of steel, especially flat products. Italy has seen historical plants that work with the minerals, like Cornigliano, Bagnoli, and Piombino, either close or shrink drastically. Only Taranto is left.

With Ilva, we want to make our first investment in Europe. We want to transform it into the best European steel mill, in terms of volumes and profitability. And, through the use of natural gas, we want to make it the new environmental standard for Europe, together with a reduction in greenhouse gases, which is a priority objective for the European Union.

BRICCO: How much are you thinking of investing, and what are your industrial objectives?

JINDAL: We're thinking of investing a significant amount, on the order of several billion euros. The objective is to reach, in a period of three to five years, 10 to 12 million tons produced per year. Six million tons using traditional methods, and between 4 and 6 million tons produced with alternative methods, including the direct use of natural gas in the production process, pre-reduced iron, and electric arc furnaces, which would allow us greater flexibility in terms of production volumes. Flexibility is another important aspect in being able to respond correctly to the variable trends in demand that characterize the iron and steel industry. In this way, we can safeguard the employment levels that represent a social treasure in this territory, even for industries that revolve around Ilva and who, together with Ilva, must find a new route for development.

BRICCO: Jindal South West is highly focused on the Indian internal market. Is your management capable of supplying adequate technical and managerial skills to contribute to Ilva's rebirth?

JINDAL: The standards and techniques in the international iron and steel industry are the same everywhere in the world. In addition to our particular focus on pre-reduced iron and safety, we've obtained some specific technological competences, namely on environmental protection, from our minority shareholders, the Japanese firm JFE, who holds 15% of our capital and has a widespread culture of quality in production and low environmental impact. We won't be alone in this venture, as we work alongside the other members of AcciaItalia for relaunching a great steel mill and changing the face of Taranto: it will be a union between our expertise and our Italian partners' experience.

BRICCO: You are members of a composite investor group in AcciaItalia.

JINDAL: Yes, this is a point of strenght for us. In comparison with the other members of the investor group, we have no hegemonic attitude. With 35% of the capital, we are happy to add our contribution to an institutional investor like Cassa Depositi e Prestiti, a long-standing steel industrialist like Giovanni Arvedi, and a great Italian entrepreneur like Leonardo Del Vecchio, who knew how to invest very successfully in many sectors by backing qualified managers and projects. We are part of an Italian vision: Vision Italia, which I spoke of at the beginning of our interview. We consider ourselves long-term investors. If AcciaItalia is awarded the control of Ilva, I would get a house in Italy and spend a significant amount of my time in your country, in order to personally follow the repositioning of Ilva.

BRICCO: You referred to Vision Italia. What's the first thing that you would do in Taranto?

JINDAL: We haven't spoken with the local community and we still don't know their needs. Certainly, health is the priority. For everything else, I would bring to Taranto the philosophy that characterizes our activities in India. Wherever we have plants, we frequently talk with the local community, to contribute to its social growth, invest in its health, in sports, and in education for young people. For example, in Taranto, I share Del Vecchio's desire: to finance and support a hospitals dedicated to young children who are sick because of pollution.

BRICCO: Engineer Jindal, just a few days after the delivery of the economic proposals, what chances do you think you have of winning Ilva with AcciaItalia?

JINDAL: I prefer not to answer, not only because the auction is still underway, but also because I am neither a speculator nor a bettor. I have full faith in the authority of the State functionaries who are organizing the competition, and great respect for the work that they were able to carry out in a very difficult situation. For us, Ilva would represent our only investment in Europe, and thus we have to support it, without giving up at the first difficulties or following changes in the economic cycle, since it will be our strategic asset in the European market. I strongly believe in investing in Ilva and in your country. And, should the auction have a positive result, my group and I will stay in Taranto and in Italy for a long time.