Kazakhs warn Mittal over safety

  • 19/02/2007

  • Financial Times (London)

Kazakhstan has warned ArcelorMittal, the world's biggest steel company, that it could be forced to close one of its coal mines if it does not improve safety following an explosion last month that killed 30 people. Vladimir Bozhko, head of Kazakhstan's ministry of emergencies, has given the company one month to draw up a plan to introduce 41 safety reforms at its Abaiskaya mine in central Kazakhstan. "The owner has been warned that if measures are not taken to ensure safety, the question of withdrawing its right to exploit subsoil resources will be raised," Mr Bozhko told a government meeting yesterday. Accidents in Kazakhstan, where ArcelorMittal employs 50,000 people, have killed 191 of the company's workers in the past 12 years. The emergencies ministry accused ArcelorMittal of neglecting safety during the breakneck expansion of Abaiskaya, where production has risen more than 30 per cent since 2001 to reach 1.3m tonnes last year, roughly 10 per cent of the company's global coal production. Abaiskaya is one of several mines operated by ArcelorMittal in Kazakhstan to feed its huge and highly profitable Termirtau steel plant in the country. The warning is a blow to the reputation of the Luxembourg-based companycontrolled by the Indian billionaire Lakshmi Mittal, its chief executive. It also puts Mr Mittal on a potential collision course with Nursultan Nazarbayev, Kazakhstan's long-serving president, with whom the steel magnate is on good terms. The company's Kazakh operations have set the tone for other moves by Mr Mittal to take over underperforming industrial sites, often in the former Soviet Union or other communist nations. ArcelorMittal said it was "working closely" with the Kazakhstan government on health and safety matters and had committed $350m to bring its coal mines in the country up to internationally recognised standards. The company said: "During the coming month we will be presenting to the government our plans for the next five years, many of which are already being implemented." It added that: "The safety of our employees is, and will remain, our number one priority." Copyright The Financial Times Limited 2008