Kazakhstan considers sale of ArcelorMittal Temirtau to Russian investors

Negotiations are currently underway with the Russian metallurgical company Severstal

The Ministry of Finance of Kazakhstan announced the possibility of selling the country’s largest metallurgical plant ArcelorMittal Temirtau to Russian investors. This is reported by a number of local media.

The decision to change the company’s shareholders was made against the background of high mortality at work and a weak investment policy. Currently, the Kazakh authorities are negotiating with the company’s shareholders on their exit from the Kazakh business.

“Over the years of work of ArcelorMittal Temirtau, there are more than 100 dead miners at the enterprise. Recent fatal tragedies were in 2021 and 2022 and 2023,” the media noted.

The prosecutor’s office of Kazakhstan tried to obtain data on what measures are being taken to prevent accidents, strengthen security measures and save the lives of workers, but the company did not provide answers to requests. After an inspection of the company’s mines in 2023, a number of safety violations were discovered.

“The condition of the mines and security systems in particular has remained the same, the management is still focused on maximizing profits. It doesn’t matter to them that Kazakhstanis are dying, that their health is under constant threat. We have lost a decade of development of technologies for the extraction and enrichment of coal, steel smelting, and we are also losing our people at these facilities. The way out of the situation is obvious – the state must expel Lakshmi Mittal’s company from the country and terminate all agreements on the use of Kazakhstani subsoil and domestic industry, in which nothing has been invested, ”comments a deputy of the VIII convocation of Kazakhstan Nikita Shatalov.

According to the Prime Minister of the country Alikhana Smoilova, the owners of ArcelorMittal Temirtau paid attention only to making a profit, without creating an adequate level of safety for workers.

According to the Minister of Finance of Kazakhstan Erulan Zhamaubaev, there is a possibility of transferring the assets of the enterprise to the ownership of the Russian metallurgical company Severstal.

“For Kazakhstan, it is important that the investor be solvent, invest certain resources in the modernization of production. So there are certain things here. And, moreover, the negotiation process with the current shareholder has not been completely completed,” he commented.

It should be noted that on August 17, 2023, a conveyor belt caught fire at a mine owned by ArcelorMittal Temirtau in the Karaganda region, after which a plan was introduced to eliminate the accident and evacuate workers – 227 miners. The number of injured due to the incident is 13 people, including 3 fatalities. The search for two more people is underway.

After this incident, the authorities of Kazakhstan began discussions on changing the shareholder of the enterprise. Environmental and industrial audits are carried out to make an appropriate decision.

Kazakhstan is not the only country where ArcelorMittal has business problems. Environmental and tax cases have been observed at the company’s facilities in Liberia, South Africa, Trinidad and Tobago and Bosnia and Herzegovina.

Recall that for the last 5 years profit of ArcelorMittal Temirtau increased to 1 trillion tenge. In particular:

• 2018 – 182.6 billion tenge;
• 2019 – 95.9 billion tenge;
• 2020 – 60.6 billion tenge;
• 2021 – 414.4 billion tenge;
• 2022 – 331.04 billion tenge.

At the same time, the enterprise has always faced environmental and personnel problems, in particular, injury to workers.

As GMK Center reported, metallurgists of Kazakhstan at the end of July 2023, steel production increased by 10.5% y/y. – up to 322.22 thousand tons. In January-July, steel production in Kazakhstan increased by 12.6% compared to the same period in 2022 – up to 2.29 million tons.