ArcelorMittal agrees to transfer its Kazakhstan operations to government

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ArcelorMittal has agreed to transfer ownership of its operations in Kazakhstan to the government following several fatal accidents in recent years, including an underground coal mine fire at the weekend that killed at least 44 workers. 

The world’s second-largest steelmaker said it had been in talks with the government over the future of its subsidiary, ArcelorMittal Temirtau, for several months and had only recently signed a preliminary agreement to transfer ownership to the state. The company’s operations in Kazakhstan span iron ore and coal mines, as well as a steel plant.

ArcelorMittal said 252 people were underground at the time of Saturday’s fire at the Kostenko coal mine near Karaganda, south-east of the capital Astana. The fire is believed to have been caused by a methane blast.

The company said on Monday that 44 workers were confirmed dead, with one miner still missing. It is the country’s worst mining disaster for more than a decade. 

Aditya Mittal, chief executive, said in a statement over the weekend, that operating the mines has “involved inherently high safety risks owing to their complex geology, and this has led to a number of fatal accidents over the past two years”. 

“It is little consolation to say that the company expended considerable effort, further reinforced since 2020, in improving the safety performance of the ArcelorMittal Temirtau operations,” said Mittal.

The company, he added, had signed a “principle agreement” to transfer ownership last week before the fatal accident. ArcelorMittal on Monday declined to comment on the details of the agreement and whether or not it would be compensated for the assets.

The government has been pushing for nationalisation of the assets for some time. Kazakhstan’s prime minister and president visited the site of the accident on Saturday where they confirmed they would be looking to complete the transaction as soon as possible. 

Shares in the company were down just under 5 per cent in morning trading on Monday. 

ArcelorMittal has come under pressure over the safety of its Kazakh facilities several times in recent years. The company acquired the operations in 1995. 

The steel plant at Temirtau produced 3.4mn tonnes of the metal last year, equivalent to about 5.7 per cent of the group’s total output of 59mn tonnes.