The government of Kazakhstan has announced that it will nationalize the local assets of ArcelorMittal, the world’s second-largest steelmaker. This decision comes in response to safety concerns following a series of deadly incidents at the company’s mines in Kazakhstan. The press service of Prime Minister Alikhan Smailov made the announcement on Saturday.
Astana, the capital of Kazakhstan, has reached a preliminary agreement with the shareholders of ArcelorMittal Temirtau (AMT) and is currently preparing for the transfer of ownership of the company to the Kazakh state. The details of the deal have not been made public yet, and it is unclear how much Kazakhstan plans to pay for ArcelorMittal’s local assets.
ArcelorMittal later confirmed the transfer of ownership in a statement on its official website.
The government of Kazakhstan has been in discussions with ArcelorMittal regarding the nationalization of its local assets for some time. The government has repeatedly expressed concerns about safety conditions at the mines, where there have been several deadly incidents. The local Emergencies Ministry reported that it discovered approximately 2,000 violations of industrial safety measures at AMT facilities in 2022 alone. According to Orda.kz, a news website, over the past three decades of ArcelorMittal’s ownership, more than 140 people have died at its facilities in Kazakhstan.
In August, a fire at a conveyor belt at the Kazakhstanskaya mine resulted in the death of five miners. Prime Minister Smailov stated at that time that the issue of AMT’s ownership had become urgent and promised that those responsible for the incidents would be held accountable.
The decision to nationalize ArcelorMittal’s assets comes after yet another incident at one of the company’s mines. A fire, presumably caused by a gas explosion, occurred at the Kostenko mine in Karaganda Region. This incident trapped more than 250 miners underground. The local Emergencies Ministry reported that as of Sunday morning, most workers had been evacuated, but 36 miners were found dead and ten more are still missing.
It is unclear whether the nationalization agreement between ArcelorMittal and the Kazakh government was signed before or after this latest mine accident.
In response to the series of accidents, President Kassym-Jomart Tokayev appointed Vadim Basin, the former deputy head of Karaganda Region, as the new head of AMT operations. President Tokayev expressed his dissatisfaction with the current management of the enterprise and described AMT as the worst attempt at cooperation between the government and business in Kazakhstan’s history. He also instructed the Cabinet of Ministers to halt investment cooperation with the company until the nationalization process is complete.
ArcelorMittal acquired its Kazakh assets in the 1990s and currently owns four iron ore mines, eight coal mines, and a steel plant in the country. The steel plant, which is the largest in Kazakhstan, accounted for approximately 5% of ArcelorMittal’s total production last year.
The nationalization of ArcelorMittal’s local assets in Kazakhstan reflects the government’s commitment to addressing safety concerns and ensuring the well-being of workers in the mining industry. It remains to be seen how this decision will impact both the company and the country’s steel industry as a whole.