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Posted on Dec 01, 02:17PM | IBNS
The French government has shelved its plan to nationalize the Florange furnaces of steel giant ArcelorMittal after the administration and the company reached an agreement on Friday, ending a bitter acrimony between the two sides over closure of the factory.
ArcelorMittal wanted to shut down two furnaces at Florange factory because they were loss making but the decision had sparked a huge backlash from the French government and Mittal was threatened with nationalization of the site and was asked to leave the country.
French Industry Minister Arnaud Montebourg even said that the company, which employs about 20,000 people in France, should leave their country after ArcelorMittal said it would have to close down the factory.
French Prime Minister Bernard Ayrault announced Friday that there would be no nationalization of Florange, the plant of ArcelorMittal, since the group has agreed to government conditions.
"The Mittal group is committed to invest at least 180 million euros over the next 5 years in Florange to sustain activities related to cold chain, and the group reaffirmed its industrial footprint in France," said Ayrault.
He said blast furnaces at Florange be maintained "in a state that allows, in time, the realization of an industrial project for the future, ULCOS [Ultra-Low Carbon dioxide(CO2) Steelmaking]."
Ayrault said the state has set aside Euro 150 million of investment for the future of this project to produce steel in energy efficient and environmentally friendly manner.
"He [Mittal] is ready to increase its stake to actively support this project," said the Prime Minister.
The PM said since its establishment, the government has worked tirelessly for the Florange site which would continue to live and grow and its employees would be protected.
He said the government had three objectives - no layoffs, significant investment in the site and the maintenance of the furnaces of Florange to prepare for a future industrial project, ULCOS,
"Mittal group is committed to invest at least Euro 180 million over the next 5 years Florange. Thus, site activities related to the cold chain, including packaging, will be sustained and reinforced by a programme of industrial investments. This will secure the employees working in these activities," said the Prime Minister.
"ArcelorMittal has reaffirmed its industrial footprint on our territory, in particular through its sites Dunkirk and Fos in their current configuration," he said.
With 100 million tonnes of annual production capacity and 260,000 employees across 60 countries, ArcelorMittal led by India born L N Mittal is the world's leading steel and mining company.
The company has steel making operations in 20 countries on four continents, in both developing and developed steel markets. In 2011, it had revenues of US USD 94bn and crude steel production of 91.9 million tonnes, which represents around 6pc of world steel output.
Around 35pc of ArcelorMittal steel is produced in the Americas, 47pc in Europe and 18pc in other regions, including Kazakhstan, South Africa and Ukraine. ArcelorMittal is number one for market position and market share in North and South America, Western Europe, Eastern Europe and CIS, and Africa.