Every day, Teresa Battista wipes away the thick layers of dust that coat the graves in San Brunone cemetery in Tamburi, a neighbourhood in the south Italian coastal city of Taranto.

Yet despite her best efforts, the cleaner, who has worked at the cemetery for 35 years, has been unable to prevent the marble tombs from developing red scarring – the result of toxic iron-ore dust.

Even after death, she said, the adjacent steel factory, which since 1965 has been spewing noxious fumes alleged to have caused thousands of cancer deaths, is inescapable.

Most of the people buried in the cemetery died of the disease. Two were Battista’s brothers. “Almost all of them here were young people,” she said. “This factory kills everything.”

The long-beleaguered steelworks, one of Europe’s largest and still a major employer in Italy’s under-developed south, is once again in the spotlight as Giorgia Meloni’s government scrambles to keep it afloat.

Meloni recently appointed a special commissioner to temporarily take over the plant, which is now called Acciaierie d’Italia (ADI) but is better known by its former name, Ilva, after the collapse of talks with the global steelmaker ArcelorMittal, its majority owner since 2018.

As the government searches for new investors, residents of Taranto, and especially those in Tamburi, which is separated from the factory just by a wire fence, recount a story that pits livelihoods against lives, the economy against the environment, and rich against poor.

The factory was built in Taranto, an ancient city founded by the Greeks, in the early 1960s, after being rejected by Bari, capital of the Puglia region, and nearby Lecce. Acres of farmland and thousands of olive trees were destroyed to make way for the sprawling complex, which is almost three times the size of Taranto itself.

For the first few decades, the ­factory brought prosperity to a city that previously survived on fishing and agriculture. Workers flocked from neighbouring areas or returned home from overseas to take jobs there. At its peak, the plant produced more than 10m tonnes of steel a year, with a workforce of more than 20,000.

Pollution from the red-and-white-striped chimneys that loom over the city became an accepted part of life. Some former workers recall blowing black mucus from their nose. Children played with the dust, some finding it on their pillows in the morning when windows were left open in summer. “It was like glitter,” said Ignazio D’Andria, the owner of Mini Bar in Tamburi. “We thought it was a gift from the fairies, when really it was poison.”

The emissions – a mix of minerals, metals and carcinogenic dioxins – infiltrated the sea, all but destroying another of the city’s economic lifelines – mussel fishing.

Cancer cases climbed, but it wasn’t until 2012 that official figures showed the death rate from the disease in the area was 15% above the national average. More recent studies confirmed a link between the emissions and the prevalence of cancer as well as higher-than-average rate of respiratory, kidney and cardiovascular illnesses.

A report by Sentieri, an epidemiological monitoring group, found that between 2005 and 2012, 3,000 deaths were directly linked to “limited environmental exposure to pollutants”. Medics say the cancer rate fluctuates in line with the factory’s output.

Children have been acutely affected: a 2019 study by Italy’s higher health institute, ISS, found that in the seven years to 2012 there was almost twice the rate of childhood lymphoma in Taranto than regional averages, and a more recent study by Sentieri showed an excess of childhood cancer in the city compared with the rest of Puglia.

In January, local medical professionals appealed to the government to prioritise health in its dealings with the factory owners, and seize the opportunity to finally clean up the ailing complex.

Anna Maria Moschetti, a paediatrician, has presented studies showing the factory’s effects on health to regional, national and European politicians.

“The plant, which emits substances that can be harmful to human health such as carcinogens, was built close to homes and downwind and this has led to the exposure of the population to toxic substances, death and illness as documented by a report of the public prosecutor’s office,” said Moschetti.

“The greatest exposure is borne by the poorest population who live close to the plants and do not have the financial resources to distance themselves.”

From the balcony of their home in Tamburi, Milena Cinto and Donato Vaccaro, whose son Francesco died in 2019 after a 14-year battle with a rare immune disorder, look out towards two giant structures that contain stockpiles of iron ore and coal. Their dome-like roof coverings were an environmental measure intended to prevent toxic dust from blowing towards people’s homes and schools.

But nothing has changed. “Every day I have to clean this dust,” said Cinto as she runs her finger along a window frame.

Vaccaro worked at the factory for 30 years. “We worked like animals,” he said, showing a photograph of a colleague covered in black soot. Vaccaro often blames himself for his son’s death. The couple would like to move away, but the value of their home has plummeted to €18,000 (£15,311) and it is now impossible to sell.

Among the factory’s legal wranglings is a manslaughter case brought by Mauro Zaratta and his wife, Roberta, whose son, Lorenzo, died of a brain tumour at the age of five. An autopsy found iron, steel, zinc, silicon and aluminium in Lorenzo’s brain. Judges needs to establish if the toxins generated the cancer. “Even though it is aware of the risks of the factory, which continues to make people sick, the government seems to think its acceptable to keep it open,” said Zaratta, whose family now live in Florence.

Today, the plant employs about 8,500 people, the majority of whom travel to work from outside Taranto. The issue has caused deep divisions, between those who work there and those who suffer its effects.

“People say they need the factory to feed their families, but in reality we were the ones feeding the factory, and paying for it with the damage to our health and the environment,” said Giuseppe Roberto, who worked at the factory for 30 years and is organising a class action against it.

Decarbonising the plant and installing electric furnaces, an idea promoted by Mario Draghi’s former government, would cost €3-4bn, said Mimmo Mazza, director of the regional newspaper Gazzetta del Mezzogiorno. “Who would pay for it?” he said. “Not only is it costly but it would mean needing less staff.”

Murals of child cancer victims have been painted on walls across Taranto. One is of Giorgio Di Ponzio, who died aged 15. His father, Angelo said: “We have so many natural resources in Taranto, so saying we can’t live without the factory is a mistake. It seems to be a choice between health and the interests of the state – in ­reality, the government doesn’t give a shit for the place or the people who get sick.”