* 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, with
metalworkers threatening to occupy the blast furnaces if the
government did not revise its deal with ArcelorMittal, and other
employees staging sympathy actions elsewhere.
"We urge Francois Hollande: retake control of this issue,"
CFDT trade union leader Edouard Martin told I>tele news
television. "We're going to occupy the factory."
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," the company said, adding:
"This in no way means the ULCOS project is being abandoned."
Firebrand leftist Minister for Industrial Revival Arnaud
Montebourg raised the stakes last week by declaring Indian steel
magnate Lakshmi Mittal unwelcome in France, accusing him of
lying and threatening to nationalise the steelworks. He raised
workers' hopes that were dashed by last Friday's deal.
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.
Asked about the deal, Ayrault told the Senate that the
government had achieved its goals. "There will be no layoffs:
that was the objective we had set for ourself," he said.
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.
In signs of growing anger, metalworkers at ArcelorMittal's
Fos-sur-Mer plant in southern France blocked the site's
entrances to show solidarity with their peers at Florange.
Workers in the plant's finished products section went on strike.
Union leaders at the company's Basse Indre plant in eastern
France were also proposing strike action.
"We're angry to see Florange workers and their union
representatives treated this way," said Michel Tosi, a CFDT
leader at Fos. "They were fooled."
Michel Liegbott, a Socialist lawmaker for the surrounding
Moselle region, told BFM television that the government had
broken its commitments with regard to Florange.
"We've been conned. They are liars," he said. "They should
have said what they are saying today six months or a year ago."
Last week's agreement, under which ArcelorMittal committed
to preserve 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".