Tension mounts over Mittal plant facing French takeover

The fate of a French plant owned by steel tycoon Lakshmi Mittal hung in the balance Friday on the eve of his deadline to the government to find a new buyer and President Francois Hollande set to take a decision on a nationalisation threat. All scenarios were evoked and media reports were awash with names that could take control of the Florange plant in the eastern Lorraine region, where two blast furnaces have been closed by ArcelorMittal for being uneconomic. France's outspoken Industrial Renewal Minister Arnaud Montebourg on Friday met workers from the plant, camping outside his office for two days, to declare that Hollande would take a final decision on nationalising the plant. Montebourg, who had first brandished the threat and said he wanted to expel Mittal, the world's 21st richest person according to Forbes, underscored that this option was "not a false hope but a solution that is serious, credible and lasting." ArcelorMittal, which wants to continue to operate the rest of the Florange site, has given the government until Saturday to find a new investor willing to take over the furnaces. The company has warned that nationalisation of the plant would cast doubt on the future of all its operations in France, where it employs 20,000 people. Hollande's Socialist government meanwhile wants the company to guarantee the estimated 650 jobs on the line due to the closure of the furnaces. But both ArcelorMittal and the French presidency have indicated that the talks could carry on beyond the expiry of the deadline to Sunday. Montebourg, widely regarded as a loose cannon whose mantra to promote national industry has even seen him don a Breton sailor top for a popular French magazine, has defended his threat to nationalise the plant. "Barack Obama's nationalised. The Germans are nationalising. All countries are nationalising. I've also noticed the British nationalised six banks," he told CNBC after a meeting with trade unions in Paris. The minister had said there was a new buyer interested in Florange, describing him as a "steelman, an industrialist, who is not a financier, who wants to invest his own money and who is ready to put almost 400 million euros into renovating this plant." As the deadline approached, there was feverish media speculation on who the interested party could be. The names ranged from Russia's Severstal, controlled by Russian billionaire Alexei Mordashov which in 2006 suffered a high-profile setback to acquire Arcelor, Italy's Riva Steel -- Europe's third-biggest producer -- to Tata Steel, the oldest steel firm in Mittal's native India. Hollande's government has been caught in a bind over the plant, a litmus test to his pledge to create jobs as well as economic growth. But many have warned that this will dent France's credentials as an investment location. London's colourful mayor Boris Johnson has seized on the controversy to invite fleeing businessmen to invest in the British capital.