"The government dismissed this idea on the grounds of commitments it obtained from ArcelorMittal," French Prime Minister Jean-Marc Ayrault said at a news conference.
Due to weak demand for steel, the company was expected to close two blast furnaces, which have already been shut down temporarily.
The government reacted by exploring the possibility of nationalizing the company, which is based in Luxembourg, The Wall Street Journal reported Saturday.
Instead of closing down the furnaces permanently, however, the steelmaker committed itself to exploring their use as underground carbon-dioxide storage facilities, the Journal reported.
The commitment to the plant includes an investment of $233.6 million over five years, The New York Times reported.
In addition, the company said it would not lay off any of its 2,700 workers. Closing the blast furnaces had threatened to end about 600 of those jobs, the Times said.