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ArcelorMittal, France in Florange plant deal

Keywords: Tags  Florange plant, steel plant, French government, ArcelorMittal, hot steel, French government, Jean-Marc Ayrault, ArcelorMittal Flat Carbon Europe Henri Blaffart

LONDON — The French government has backed away from a threat to nationalize ArcelorMittal SA’s Florange steel plant after the company said it would preserve jobs and invest more at the site.

The agreement, reached Nov. 30, will continue with its process of shutting liquid steel production at the site.

The deal will not involve the restart of Florange’s two blast furnaces, which had been a key demand from France’s government and Florange workers’ unions. But ArcelorMittal has pledged no more compulsory redundancies among more than 600 staff and has promised to invest €180 million ($234 million) in downstream operations, French Prime Minister Jean-Marc Ayrault said in a statement.

"Weak activity in Europe will not allow for the prospect of restarting the blast furnaces in the short term," he said, accepting the Luxembourg-based company’s basic point that hot metal production at Florange was not currently viable.

The company has agreed to keep the furnaces, which were idled 18 months ago, in a state where they might be restarted as part of a test project for producing environmentally friendly steel, Ayrault said, rejecting what he called the hypothesis of nationalization.

"Nationalization—that is to say, the expropriation for ‘the good of the public’—may well be necessary in specific historical circumstances or to safeguard the best interests of the nation," he said. "But it is not effective against a problem or opportunity for a company facing a problem of competitiveness."

Meanwhile, ArcelorMittal Flat Carbon Europe vice president Henri Blaffart highlighted the positive aspects of the deal.

"After months of uncertainty, we have finally reached an agreement on the future of our operations in Florange," he said. "In the context of the current economic environment, this is a good agreement (which) will allow Florange to focus on developing its downstream activities and producing value-added steels."

A version of this article was first published by AMM sister publication Steel First. Staff in Shanghai contributed to this story.

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