Last month, ArcelorMittal
-- the world's biggest steelmaker -- pulled out of an agreement to buy struggling Italian firm Ilva and said it planned to cut 5,000 jobs after Italian lawmakers revoked a period of legal immunity to bring the heavily-polluted site up to environmental standards.
Since then, Italy has been trying to find a way to save the Taranto plant in the south of Italy which has long been mired in controversy over its environmental impact. Experts believe that some 7,500 people have died in the surrounding area as a result of diseases linked to toxic emissions.
Italy considers the steel mill a strategic industrial site and faces pressure from unions, which are trying to protect the 8,000 jobs at risk.
Economic Development Minister Stefano Patuanelli said the state had a role to play, along with ArcelorMittal.
"The state must be the responsible for the application of the industrial plan ... and control the actions of the private shareholder," Patuanelli said.
La Repubblica reported that the new 3.2 billion euros (USD 3.5 billion) proposal would include the participation of a state-owned bank, the state-owned gas firm SNAM, as well as steel company Arvedi. The latter would help bring needed tech innovation to the Taranto site.
The newspaper reported that the state wants to limit layoffs to 1,800 workers, with a plan in place to subsidise their hiring by other companies.
AcelorMittal began leasing the plant -- with an obligation to buy it -- late in 2018 and had plans to invest 2.4 billion euros to revive it, including 1.2 billion euros to curb pollution by 2024.