Sklyar Spoke About Mittal's Operations in Kazakhstan
The Government of the Republic of Kazakhstan has found an investor ready to buy all the assets of ArcelorMittal Temirtau from Lakshmi Mittal.
They have promised to share who this is with the public by the end of November. First Deputy Prime Minister, Roman Sklyar, revealed details regarding the deal this past weekend.
On November 4, Sklyar held a closed briefing for the media, where he answered questions about the nationalization of AMT. He stressed that the transaction is at the final stage, but he cannot disclose the name of the investor and other details before signing all the necessary documents.
We are currently unable say the name of this company, you will find out in due time, negotiations are underway between them. This is confidential information. Therefore, we will not disclose it now. But it will be a domestic investor who will buy the company at its current market value and who has committed to strictly monitor this program. There are salvo investments — more than a billion dollars in the production and social sphere of the city of Temirtau, Sklyar said.
Within three to five years, three billion dollars are planned to be invested in the enterprise's development, now there is a need for a immediate investment in the amount of $1.3 billion. But this has been known since November 1 thanks to a press briefing with Prime Minister, Alikhan Smailov.
The Government has made a number of demands to the new investor. First of all, the three billion dollars should go to the active development of production and its modernization. He noted that Lakshmi Mittal promised 2.5 years ago to invest three billion dollars in the modernization of production, environmental initiatives, as well as in the repair of Temirtau thermal power plant (apparently, this is how the Government got the number for necessary investments), but he never kept his word.
They dragged it out in every possible way. There were unacceptable conditions that they put forward for the future investment contract. Therefore, a potential investor after the completion of the purchase and sale transaction will strictly monitor this, fulfill the schedule for investing, first of all, in industrial safety. People died in the steel industry itself. If a coal mine is a source of increased danger, measures should be stricter there. Nevertheless, people died there, production stopped there, when technological accidents often happened, Sklyar added.
The Government of Kazakhstan has also put forth the following requirements:
- Expand the product range. Now the metallurgical plant produces only tin and rolled metal.
- Invest in improving the environment.
There should be no more black snow in Temirtau, Sklyar noted.
- Maintain all 30 thousand jobs. This is a system-forming enterprise, which, according to Sklyar's assurances, "should make Temirtau a large city."
Roman Sklyar also noted that the assets of ArcelorMittal Temirtau are not in the best condition because of the failure of the investor to fulfill its obligations to carry out repairs and comply with the environmental requirements of the country.
Rumors About Investor from Russia
Earlier, rumors were circulating in the media that the company could be bought out by one of the pro-Kremlin oligarchs. Sklyar called these rumors untrue.
I tell you with responsibly that this is nothing more than speculation and fakes that some foreign companies or people from other countries will come and take over the enterprise. Either by themselves or through some figureheads. In the age of digitalization, any figurehead will come to light sooner or later. Sources of funding, connections, etc. — it's all easy to find. You don't have to be an employee from the special services, you just need to go online and find it all. Therefore, there is no point in it. Be patient, an investor will come, and he will be open to communicating with the media, given the response that the company and the tragic events caused. They will be obliged to give information to the media, show investments, real improvements in production. We will control this, the first Deputy Prime Minister assured.
According to him, the new investor is independent from other states and attended President Toqayev's meeting with business in September 2023. Sklyar noted that the Government did not consider the possibility of admitting a small investor to this transaction, whereas any large one will be strongly criticized one way or another.
There will always be criticism. Our task is to bring back the enterprise’s former glory. To restore people's confidence in the future. The state in which the company is now: the moral and psychological climate in a team of many thousands, when they see how they steal, they take away with KAMAZ trucks - this is unacceptable. It is a long stretch to call An investor who invests only in maintaining production so that it does not close at all. Why do we need one? It is necessary to part with him in the legal boundaries,
said the first deputy prime minister.
And who from the leadership of the AMT will be punished for the death of 46 miners and will they be punished at all? Roman Sklyar promised that no one will escape justice, including AMT's foreign top management.
He recalled that the Prosecutor General's Office continues to investigate the explosion at the Lenin mine, another AMT asset. It occurred on November 3, 2022 and claimed the lives of five miners. According to him, the management of ArcelorMittal Temirtau JSC, including foreign managers, are not exempt from the investigation.
Regarding the accident, regarding the tragedy at the Lenin mine, which occurred and the miners died, a criminal case is now being investigated. And, too, it's no secret to anyone, with regard to officials of the entire AMT. There can be no untouchables, as you know. They just don't exist in this case. In strict accordance with the law, law enforcement agencies have undertaken to investigate and involve everyone, absolutely everyone involved in this, Sklyar said.
According to him, citizenship will be a non-factor.
Incidentally, according to Sklyar, the foreign top management of the company is still in Kazakhstan.
Today, 6 November 2023, The Ministry of Industry of the Republic of Kazakhstan and ArcelorMittal Temirtau made a statement.
On October 28, a disaster occurred at the Kostenko coal mine of ArcelorMittal Temirtau (AMT), which resulted in the death of 46 brave miners. Every effort is being made to support the families of the deceased miners, and an investigation into the cause of the incident is ongoing, the statement said.
Negotiations to transfer ownership of ArcelorMittal Temirtau to the Government of Kazakhstan have been ongoing for several months, and the government and ArcelorMittal recently reached a preliminary agreement on the future direction of AMT's steel and mining operations, as well as its subsidiaries.
The Ministry assured all AMT stakeholders that:
- All rights and obligations associated with ArcelorMittal Temirtau (AMT) (including the Temirtau steel plant, coal division, Orken, subsidiaries, including the Aqtay pipe plant and representative offices in the CIS countries) will be respected.
- The Government of Kazakhstan and AMT will ensure full continuation of business with respect to compliance with all rights and obligations of AMT, including supply agreements with customers, acceptance of goods and services, including contractor services from suppliers, obligations to employees, etc.
- AMT business processes, including booking orders, concluding contracts, shipping, invoicing and concluding contracts with suppliers, operate as usual.
- AMT will continue to maintain the status of a reliable partner for its clients and will strive to do so in the future.
Original Author: Ilya Astakhov
DISCLAIMER: This is a translated piece. The text has been modified, the content is the same. The text has been updated with relevant information as of 06/11/23. The article was originally published on 04/11/23. Please refer to the original piece in Russian for accuracy.
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