Lakshmi Mittal's ArcelorMittal, France target steelworks compromise
that would save jobs and draw new investment to Florange, Le Monde daily reported, citing government sources.
Officials have defended a temporary nationalisation of the site, saying it is a special case because ArcelorMittal has 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.
They argue that 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.
In Rome, the Italian cabinet was reviewing a decree on Friday to secure the future of the troubled ILVA steel plant after discussions between Prime Minister Mario Monti and the management on Thursday.
ILVA is a major employer in a jobs black spot in southern Italy and is threatened with closure over concerns that toxic factory emissions increased deaths from cancer and respiratory diseases in the surrounding area of Taranto.
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