* ArcelorMittal withdraws French site bid for EU-funded
* Move throws into question a deal to preserve Florange site
* Steelmaker, govt say agreement intact but locals, unions
By Yves Clarisse and Catherine Bremer
PARIS, Dec 6 A politically charged deal between
the French government and ArcelorMittal to preserve jobs at an
ailing steelworks looked at risk of unravelling on Thursday
after the global steel giant ditched a bid to run an EU-funded
ArcelorMittal, 40-percent owned by India's Mittal
family, withdrew an application to use the Florange site in
northern France for an EU pilot project in less polluting steel
that Paris had hoped could keep two idled blast furnaces going.
ArcelorMittal and Prime Minister Jean-Marc Ayrault said the
move did not mean the idea of using Florange for the ULCOS
"green steel" project was being permanently abandoned, nor that
the deal with the French government had been undone.
But unions and local politicians reacted angrily.
ArcelorMittal, which has been under fire for months in
France over its plan to permanently shut its Florange furnaces
on the grounds they are not economically viable, said it could
not currently pursue the ULCOS project for technical reasons.
"(This) is perfectly coherent with what is in the agreement
signed with the French government," it said, adding: "This in no
way means the ULCOS project is being abandoned."
Ayrault, whose government was appointed by Francois Hollande
after the Socialist was elected president in May, said in a
statement that the European Commission had indicated that the
project could be pursued in a future tender.
Yet in the best case, a potential start-date would now be
delayed by several years, throwing into question the idea that
ArcelorMittal would keep spending money to keep its mothballed
Florange furnaces in viable working order.
"We've been conned. They are liars," Michel Liegbott, a
Socialist lawmaker for the surrounding Moselle region, told BFM
television. "They should have said what they are saying today
six months or a year ago."
CFDT trade union leader Edouard Martin told French media
that ArcelorMittal had "misled everybody" and vowed to restart
the fight to keep Florange operational.
Ayrault's own industry minister, leftist Arnaud Montebourg,
had made waves before the deal was struck by accusing the steel
firm's Indian chief executive Lakshmi Mittal of telling
"shameful lies" and saying he was no longer welcome in France.
Last week's agreement, under which ArcelorMittal has
committed to preserving some 630 jobs at the two blast furnaces,
was a crucial test of Hollande's pledge to stem a run of
industrial layoffs and also revive French competitiveness.
France's unemployment rate hit a new 13-year high of 10.3
percent in the third quarter of the year, data showed on
Thursday, piling more pressure on Hollande, who has vowed to
halt the rise by the end of 2013.
ArcelorMittal had agreed to invest 180 million euros ($235
million) in Florange and keep the furnaces in working order so
they could be used if its application to use the site for the
ULCOS project was successful.
ULCOS (Ultra-Low Carbon Dioxide Steelmaking) is a consortium
of 48 European companies and other organisations working to
develop ways to cut CO2 emissions from steel production in order
to curb the greenhouse gases blamed for global warming.
A European Commission spokesman confirmed on Thursday it had
received written notification from ArcelorMittal that it had
decided to withdraw its bid "due to technical difficulties".