Ukrainian President Viktor Yanukovych said Friday that the question of taking away a steel plant belonging to the world's largest steel maker ArcelorMittal (MT) "will not arise."

ArcelorMittal had said Wednesday that the Ukrainian government could take back into state control its $4.8 billion steel plant in the east of the country based on charges that the steelmaker violated its 2005 purchase agreement.

"In my opinion, it will not develop further. In any case, I told [French] President Nicolas Sarkozy yesterday that this question will most likely not reach court, and the question of reprivatizing or canceling the agreement on...this plant will not arise," Yanukovych said at a meeting in Paris.

ArcelorMittal says it reached an agreement in 2009 with the state body responsible for privatization to postpone investment after declaring a force majeure because of the global economic crisis.

A court in Kiev will hear a challenge Tuesday that the steel maker was not granted valid permission to postpone investment.

The Kryvorizhstal steel mill was first privatized in 2004, when it was sold for $800 million to Rinat Akhmetov, Ukraine's richest man, and Viktor Pinchuk, son-in-law of then-President Leonid Kuchma. The deal prompted an outcry and was reversed after a new government was swept to power following mass protests against alleged electoral fraud in a presidential election later that year. The plant, now called the ArcelorMittal Kryviy Rih steel plant, was resold to Mittal Steel, now known as ArcelorMittal, for $4.8 billion in 2005.

-By James Marson, contributing to Dow Jones Newswires; +7 495 232-9192, j.r.marson@googlemail.com
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