Florange Plant

Minister Says Mittal Not Welcome in France as Deadline Looms

The fate of the Florange plant has become a litmus test of  President Francois Hollande's strategy for fighting rising unemployment and raising the flagging competitiveness of French industry.

The showdown between global steel giant ArcelorMittal (IW 1000/35) and France over its Florange plant hit new heights on Monday as a minister said the company was no longer welcome in the country.

A source close to the matter said company chief Lakshmi Mittal was to meet President Francois Hollande on Tuesday ahead of a deadline Saturday for France to find a buyer for two shuttered blast furnaces at the site in northeast of the country.

France says it has two offers, but only for the entire site, and Mittal has refused to sell the full operation.

Industrial Renewal Minister Arnaud Montebourg has raised the specter of a temporary nationalization of the plant, prompting Mittal to warn that would threaten its activities in France, where it employs 20,000 people.

Montebourg upped the stakes on Monday, saying France did not want ArcelorMittal in the country anymore and is looking for an industrial partner to take over the group's operations at the plant.

"We do not want Mittal in France any longer because they do not respect France," Montebourg told the French financial daily Les Echos.

"Mittal's lies since 2006 are damning," the French minister said, adding that the company "has never honored its commitments" to the country.

Newspaper Le Monde quoted members of the Mittal family as saying they were "extremely shocked" by Montebourg's remarks.

Montebourg told Les Echos he was working on a "transitory nationalization" project for the site.

The newspaper said that "the idea would be to associate an industrial operator with a minority capital stake for as long as it takes to stabilize activity" at the plant.

The fate of the site has become a litmus test of  President Francois Hollande's strategy for fighting rising unemployment and raising the flagging competitiveness of French industry.

The plant is based in the Lorraine region of eastern France, the traditional center of France's steel industry.

ArcelorMittal has said the furnaces, which were damped down for 14 months prior to their closure, were uncompetitive in a tough trading climate, partly because they are too far from ports for transportation.

Les Echos has reported that Russian group Severstal is among several potential buyers for the furnaces.

ArcelorMittal last month reported it had plunged into a third quarter net loss of $709 million due to a slump in Chinese demand and operating losses in Europe.

The group owns 11 blast furnaces in northern France, Germany and Belgium and, as well as the two at Florange, has shut down two furnaces in the Belgian city of Liege and one in the French port town of Dunkirk.

Thibault Le Grand, APF

Copyright Agence France-Presse, 2012

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