France strikes deal with Mittal to save Florange operations

In a huge relief to steel tycoon Lakshmi Mittal, the French government has extended a lifeline to his Florange operations.

The French authorities entered into a deal with ArcelorMittal, which would allow it to invest 180 million euros ($234 million) in its Florange steelworks in Lorraine, saving around 600 jobs at the two shuttered blast furnaces.

French prime minister Jean-Marc Ayrault, however, said the two furnaces would not restart for now, given as the European steel demand continued to be weak.

ArcelorMittal would keep the furnaces in working order for future use in a test project for environmentally friendly steel production.

Earlier, France had threatened to nationalise a steel plant in the eastern part of the country unless the Indian-born billionaire owner of the firm agreed to sell it to a private buyer.

ArcelorMittal, the world's biggest steel-maker, sought to shut or sell off two blast-furnaces at Florange while retaining other profitable activities at the site.

The company owns over 100 sites in France employing 20,000 people.