Kazakhstan Assumes ArcelorMittal Operations Amid Deadly Fire
Kazakhstan has started the process of acquiring ArcelorMittal SA’s local business after dozens died in a fire at the company’s mine on Saturday.
(Bloomberg) -- Kazakhstan is finalizing the acquisition of ArcelorMittal SA’s local business, which was rocked on Saturday when dozens of workers died in an underground coal mine fire.
The government said it has reached a preliminary agreement with shareholders of ArcelorMittal Temirtau JSC and is preparing to transfer ownership of the enterprise to the state. Kazakh President Kassym-Jomart Tokayev ordered his administration to stop investment cooperation with the steel-making giant.
It’s unclear whether Kazakhstan plans to pay ArcelorMittal for its assets there. Kazakhstan’s industry minister Kanat Sharlapayev said in September that the government had “absolutely no intentions” of seizing company assets, Interfax reported.
The blaze at the Kostenko facility marks the nation’s worst mining disaster since at least 2008. Authorities in Kazakhstan say 28 miners were killed with 18 still missing. More than 200 people were evacuated to the surface, ArcelorMittal said in a statement.
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Mine operations in ArcelorMittal Temirtau’s coal department has been suspended for 24 hours for “gas protection checks,” the company said.
The Kostenko mine is located near Karaganda, southeast of the capital Astana. Tokayev declared Sunday a national day of mourning.
The deadly blaze comes amid steps toward a change of ownership. “The two parties have been in discussions concerning the future of ArcelorMittal Temirtau and recently signed a preliminary agreement for a transaction that will transfer ownership to the Republic of Kazakhstan,” the company said.
ArcelorMittal didn’t specify whether the agreement was signed before or after the mine accident.
“ArcelorMittal is committed to completing this transaction as soon as possible in order to minimise disruption to the greatest extent possible,” it added.
The world’s second-largest steelmaker has come under pressure over the safety of its Kazakh facilities several times. In August, five workers were killed in a fire, and in November another five workers were killed in a gas explosion.
ArcelorMittal acquired its operations in Kazakhstan in the 1990s and promised further investment to modernize. It currently owns iron mines, coal mines and a steel plant in the former Soviet republic.
The company’s Kazakh steel mill accounted for about 5% of the company’s total production last year. Kazakhstan is also home to four iron ore mines and eight underground coal mines owned by the firm.
--With assistance from Eddie Spence and Nariman Gizitdinov.
(Updates with detail, ArcelorMittal comments from third paragraph.)
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