By Inti Landauro

PARIS--Tensions rose between ArcelorMittal (MT) and the French government Friday, with the steel giant rejecting the government's request to put the rest of its Florange plant up for sale.

As the deadline for finding a buyer approaches, the company insisted it only agreed to sell the idled part of the mill in eastern France.

"The sale of downstream activities at Florange would threaten the rest of ArcelorMittal's activities in France where the group employs 20,000 people," the company said in a statement.

Labor Minister Michel Sapin and Industry Minister Arnaud Montebourg have asked the company to sell more assets than just the liquid phase of the mill, which was due to close until the company gave the government two months to find a buyer. That was Oct. 1.

With the deadline approaching, Mr. Montebourg says potential buyers have shown interest for the full plant and not only the liquid phase. He also mentioned the possibility of a government takeover of the plant.

ArcelorMittal said it has no information about bidders for Florange.

The government is opposed to the closure because hundreds of workers risk losing their jobs. Several officials have met with the Florange unions and said they would try to prevent the closure.

-Write to Inti Landauro at inti.landauro@dowjones.com

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