French minister doubts ArcelorMittal would stick to deal to keep furnaces open
A French minister has cast doubts the world’s top steelmaker would abide by a compromise deal to keep two struggling blast furnaces in north-eastern France open.
ArcelorMittal, owned by Indian-born tycoon Lakshmi Mittal, had wanted to close the furnaces at Florange and lay off around 630 workers because of a slump in demand.
On Friday, French prime minister Jean-Marc Ayrault announced a deal in which the steelmaker committed to invest at least 180 million euros at the Florange site over five years.
But on Sunday, the French ecology minister, Delphine Batho, told the French television network iTele she has no confidence in the deal.
"Mittal has never kept his promises in the past," she said. "We are absolutely mobilised and the arm-wrestling with Mittal will continue to ensure that the pledges are respected."
The French government and ArcelorMittal had been in disagreement for several months over the fate of the two blast furnaces, the last furnaces in the once thriving industrial region of Lorraine.
The steelmaker had given the government until December 1 to find a buyer for the blast furnaces.
The government responded by threatening to nationalise the entire site, which contains facilities to produce higher-end products that ArcelorMittal wanted to keep.
Under Friday's deal, the two blast furnaces ArcelorMittal had closed would be left intact until EU financing was confirmed for an existing carbon-capture project, while ArcelorMittal agreed not to proceed with forced job cuts.
The dispute had left President Francois Hollande's government caught between a pledge to protect jobs and the need to improve the competitiveness of French industry as the country faces rising unemployment and stagnant growth.
It also came at a difficult time for ArcelorMittal. The company is saddled with a debt mountain that is expected to rise to 22 billion euros by the end of the year.
The ratings agency Moody's recently downgraded ArcelorMittal’s credit rating to junk status.