After 'racist' row, Lakshmi Mittal inks deal with France

Officials had defended the idea of a temporary nationalisation, saying it was a special case because ArcelorMittal had broken promises to keep the furnaces running.

But ArcelorMittal denies breaching commitments. Sources close to the group say Arcelor planned in 2003 - before its 2006 takeover by Mittal - to wind down inland blast furnaces in Europe, including the two in Florange, by 2010.

The group says overcapacity in Europe's steel market, with demand 28 percent below peak 2007 levels, has made Florange's furnaces uneconomical and that a buyer would have to absorb deep losses to take them on, even with the rest of the site.

Florange Mayor Philippe Tarillon relayed the extent of dismay with ArcelorMittal's boss, telling French media: "I understand the workers would have preferred to get rid of Mr Mittal. And I will share a secret with you. Me too."

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