The world's largest steelmaker Arcelor Mittal confirmed Tuesday it is closing a steel plant in Madrid, but would redeploy more than 330 staff elsewhere in Spain, a union source said.

"Management has announced to us the closure for an indeterminate period of the Madrid plant," where activity had already been suspended, union leader Edouard Martin told AFP in Luxembourg after talks with company managers.

Martin said Arcelor Mittal bosses left open the possibility of the site re-opening at a later date "if market conditions allow."

The union representative said that the company refused to discuss other possible closures in Europe amid concern over sites in Luxembourg, where a plant was mothballed in October, Poland and the Czech Republic.

Arcelor Mittal has reported that third-quarter 2011 output fell by 29 percent in a division that included sites in Britain, Greece, Italy, the north African Maghreb region, Portugal and Spain.