ArcelorMittal today announced it will permanently close two blast furnaces at Florange in France and said it has accepted the French government’s request to find a buyer for the units within next two months.

Announcing the decision, ArcelorMittal said in a statement that 629 people are going to be affected by the closer of the furnaces.

“Given the continued economic difficulties affecting the French and European economies, the company wishes to propose to permanently close the liquid phase...,” the company said.

The two furnaces have been idle for the last 14 months. The temporary closure of the two units, announced earlier by the company, had become a political issue in France and the French government has been making attempts to avoid its permanent closure.

The company, however, said that “this proposal has not been made lightly but it is a reality that the Florange liquid phase and the slab it produces are not competitive in today’s difficult economic context.”

“ArcelorMittal fully recognises that this is a difficult announcement for those who work at the liquid phase. However, it is important to emphasise that this does not represent the end of the steel industry in Lorraine,” company’s CEO for Flat Carbon Europe, Robrecht Himpe was quoted in the statement.

Himpe further said: “we will continue to invest and focus in Florange as an important centre in the transformation of slab into value added high-quality steels for the automotive industry and packaging sectors.”

Maintaining that there is a significant overcapacity in the European steel industry, the company said it has “accepted the French government’s request to find a buyer for the liquid phase within the next 60 days” and would include the coke plant, located in the same premises, in the sale.

“To date, the company had implemented a strategy of temporary idling of the Florange furnaces whilst waiting to see if the economic situation would improve. However after four years of challenging conditions, it is clear that there will be no swift return to pre-crisis levels,” it said.

Stating that 629 persons would be affected by the closure, the world’s largest steelmaker said it would “like to begin an exemplary social dialogue” with the workers and “believes that it can avoid any compulsory layoffs by utilising a number of social mechanisms.”

The company further said its Flat Carbon Europe segment, which controls that Florange plant, has incurred an operating loss of 839 million euros between July, 2011 and June, 2012 and it sees slow recovery in European demand in the coming years.

However, the company would continue to produce high quality value added products from the Florange plant for its customers, particularly for the automotive industry, by transporting slabs from Dunkerque in Northern France, it added.

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