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PARIS (Reuters) - The chief executive of steelmaker ArcelorMittal ISPA.AS has agreed in principle to sell two idle blast furnaces at a steel mill in northeastern France after government pressure to prevent their closure, newspaper Liberation reported on Saturday.
The fate of the furnaces in the town of Florange has become a symbol of industrial decline as well as a test of Socialist President Francois Hollande's ability to stop rising job losses.
On Thursday, Hollande told ArcelorMittal chief executive Lakshmi Mittal to restart the idled furnaces or put them up for sale during a meeting at his office, following reports the steelmaker planned to shut them down.
Mittal "gave his consent in principle" to finding a buyer, Liberation wrote, citing a source in the president's office. The paper did not indicate whether a buyer had been identified.
The government was not immediately available for comment. An ArcelorMittal spokeswoman said the firm would not comment until after a works council meeting on Monday.
The furnaces - where iron is extracted from ore for use in steel production - employ about 550 of the 2,800 workers at the Florange plant, located in the former heart of the steel industry in a region already struck by industrial decline and high joblessness. The rest of the plant is operational.
In a defiant speech in Florange this week, Industry Minister Arnaud Montebourg told irate workers the government was in a "tug of war" with ArcelorMittal over its plans and would not accept a total shutdown.
Montebourg also said the government aims to pass a law by the end of the year that would force firms intent on closing plants to sell them to alternative operators.
The law would strengthen the government's hand as it fights to save jobs ahead of several looming shutdowns including that of PSA Peugeot's car assembly plant in Aulnay. Peugeot has pledged to convert the site, but has yet to detail its plans.
Unemployment topped 3 million in August for the first time in 13 years. Frustration over Hollande's inability to stop job losses has taken a toll on his approval rating, which many polls show below 50 percent.
Reporting By Nicholas Vinocur; editing by Jason Webb.