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Deal to rescue Italy furnace site, 4,000 jobs at risk

Italy's Prime Minister Matteo Renzi gives a speech during a campaign meeting of the Democratic Party (PD) on April 12, 2014

A blast furnace at an Italian steel plant was shut down on Thursday with 4,000 jobs at risk despite a call by Pope Francis for officials "to make every effort in terms of creativity and generosity to rekindle hope".

The government said a deal had been signed to save the site, but it came too late to prevent the shutdown at the Lucchini plant in Piombino on the Tuscan coastline, where production began in the early 20th century.

The governor of the Tuscany region Enrico Rossi described the closure as "a dramatic moment" but said a plan to transform the furnace had been reached after an emergency meeting with Prime Minister Matteo Renzi.

Between them the region and the government have pledged 250 million euros ($345 million) to modernise the site, making it ecologically friendly.

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The plant, which produced railway tracks, will also be equipped in future to scrap military ships, Italy's defence ministry said.

"Today is the end of a long and glorious industrial history, but we want to begin another," Rossi told journalists after the government meeting.

The authorities "are determined to rebuild the furnace with advanced technologies to allow steel production at Piombino to resume within two to three years", he said.

The plant gives work to 4,000 people including contractors and has been in trouble for years.

Emotional steel workers had gathered to watch the shutdown, with one worker Lorenzo Fusco saying "the furnace is breathing its last in a surreal and dramatic atmosphere".

The environment ministry had previously promised 50 million euros to develop the site and the region has already allocated 60 million euros to finance a transformation of the plant and the port of Piombino.

Francis mentioned the plant at his general audience in St Peter's Square on Wednesday, saying he had received a video appeal from the workers.