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ArcelorMittal says it had “operational issues” at its Temirtau steel plant in Kazakhstan

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FEB. 7 (The Conway Bulletin) — Luxembourg-registered metals producer ArcelorMittal said that output dropped in Q4 2018 compared to Q4 2017 because of “operational issues” at its Temirtau plant in central Kazakhstan. The Temirtau plant is one of the country’s largest non-oil and gas projects and is a cornerstone of the Kazakh economy. ArcelorMittal has clashed with labour unions over pay, redundancies and holidays at its plant over the past few years. It also said that a pipeline explosion had slowed production.
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>This story was first published in issue 399 of The Conway Bulletin on Feb. 8 2019
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Explosion kills three Kazakh coal miners

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ALMATY, AUG. 31 2017 (The Conway Bulletin) — — A methane gas leak triggered an explosion at a mine in central Kazakhstan, killing three coal miners in the worst Kazakh mining accident since 2008 when 30 people died in a blast.

The Kazakhstanstkaya mine is located near the city of Karaganda and is reportedly owned by the steel works at nearby Timirtau. The steel factory is owned by Luxembourg-based ArcelorMittal.

The reputation of ArcelorMittal’s factory has fallen over the last few years as it cut jobs. This was partly linked to a global economic downturn and partly a result of international sanctions on Iran, a core client.

The factory now employs around 12,000 workers, down from 15,000 only a few years ago. It had also tried to cut staff salaries, although this effort was rebuked.

Kazakhstan has a patchy record for coal mining safety. As well as the 2008 accident, a monorail accident last year also killed three miners at another coal mine owned by ArcelorMittal. In 2006, 41 miners in Kazakhstan died in a methane blast.

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(News report from Issue No. 342, published on Sept. 7 2017)

Arcelormittal’s troubles in Kazakhstan

OCT. 17 2016 (The Conway Bulletin) – ArcelorMittal, the world’s largest steelmaker, has shown signs of trouble in its operations in Kazakhstan due to the fall in commodity prices.

In early 2014, it laid off around 1,000 workers. The subsequent devaluation of the tenge currency seemed to have fixed its cost problems but as the US dollar strengthened against all commodities, effectively pushing prices down, the company felt the bite of lower revenues.

In 2015, it cut worker salaries by 25% only to later face a court order that deemed the move illegal. Later in 2015, when the tenge sank after the Central Bank ditched the peg to the US dollar in August, ArcelorMittal Temirtau’s former boss Vijay Mahadevan said that the tenge value needed to be even lower for the company to effectively cut costs.

But exchange rate fixes are only one-off solutions that cannot ensure long-term stability.

Earlier this year, the company predicted a 13% drop in net income and cancelled a promised pay raise to its employees, lowering their benefits instead. And in September, the government lodged a veiled accusation against ArcelorMittal Temirtau for allegedly slowing production to keep revenues low and avoid a higher tax bill. The company said this week it had resumed full production, to avoid further problems.

But the headaches are still there, despite the potential growth of the Iranian market, vital for ArcelorMittal, after most sanctions were lifted this year.

Besides the thousands that it currently employs, the plant in Temirtau holds symbolic value, as President Nursultan Nazarbayev worked there in his youth.

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(News report from Issue No. 301, published on Oct. 21 2016)

Kazakhstan fines ArcelorMittal

JUNE 17 2016 (The Conway Bulletin) – Steel producer ArcelorMittal Temirtau received a fine of 3.4m tenge (around $10,000) from the Kazakh government for failing to comply with its 2014 investment plan. The company, a subsidiary of Indian giant ArcelorMittal, operates the biggest steel producing plant in Central Asia. Slower demand for steel had forced the company to cut back investment and lay off workers in 2014. It had hoped that the reemergence of Iran into the international economy would boost sales.

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(News report from Issue No. 286, published on June 24 2016)

 

Kazakhstan’s ArcelorMittal Temirtau appoints new CEO

APRIL 18 2016 (The Conway Bulletin) – ArcelorMittal Temirtau, Kazakhstan’s largest steelmaker, said it will appoint Paramjit Kahlon, the former CEO of an ArcelorMittal steel plant in Ukraine, as its new CEO in May. ArcelorMittal Temirtau has laid off thousands of workers over the past few years as it tries to deal with low steel prices triggered by a glut of supply.

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(News report from Issue No. 277, published on  April 22 2016)

 

Kazakhstan’s ArcelorMittal worries

FEB. 19 2016 (The Conway Bulletin) — Vijay Mahadevan, CEO of steel maker ArcelorMittal Temirtau which is one of the biggest employers in Kazakhstan, said his company will be looking at a drop in net income (EBITDA) of 13% in 2016, from $5.2b to $4.2b because of low global commodity prices. At the beginning of February, ArcelorMittal Temirtau scrapped plans to raise workers’ salaries in June because of worries about continued weak market conditions for its products.

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(News report from Issue No. 269, published on  Feb. 26 2016)

 

Czech steel maker delivers materials to Azerbaijan

JAN. 22 2016 (The Conway Bulletin) — Czech steel maker Trinecke Zelezarny delivered to Azerbaijan material for the renovation of a railway route. Last September, Trinecke Zelezarny won a 15b crowns ($605m) contract to supply and repair over 600km of rails. The company sealed the contract after Czech President Milos Zeman visited Baku in September 2015. Azerbaijan is also the second-largest oil exporter to the Czech Republic after Russia.

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(News report from Issue No. 265, published on  Jan. 29 2016)

Kazakhstan signs deals with China

MARCH 27 2015 (The Conway Bulletin) –  On a trip to Beijing, Kazakh PM Karim Massimov signed deals with his Chinese counterpart, Li Keqiang, worth $23.6b. The deals covered a range of industries from steel and glass production to oil refining and hydropower. China and Kazakhstan have increased cooperation in the past few years.
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(News report from Issue No. 225, published on April 12015)

Kazakh region criticises ArcelorMittal

MARCH 4 2015 (The Conway Bulletin) – The government of the Karaganda region has said that ArcelorMittal’s temporary move to knock 25% off its workers’ wages at its steel plant in Temirtau last month was illegal, the Tengrinews website reported. It has filed a lawsuit against ArcelorMittal, one of Kazakhstan’s biggest foreign investors.
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(News report from Issue No. 222, published on March 11 2015)

ArcelorMittal to cut 1,000 jobs

MAY 5 2014 (The Conway Bulletin) — The Temirtau steel plant in central Kazakhstan, owned by Luxembourg-based ArcelorMittal, said that it would make 1,000 workers redundant in order to cut costs.

Outside the energy sector, the Temirtau steel plant is one of Kazakhstan’s biggest industrial operations.

It’s been trying to navigate through a difficult period, though. The combination of sanctions on Iran, previously the factory’s biggest client, and the general global economic weakness combined to knock profits and it has steadily laid off workers over the past couple of years.

At the end of last year, reports surfaced that it would look to cut around 2,500 people from its workforce of about 14,500. This now appears to have been watered down.

There hasn’t been an official statement from the company but state-backed TV channel Astana quoted Dmitry Pavlov, head of human resources at the plant, saying that the work force would be cut by only 1,000 people.

Temirtau is a classic Soviet style monogorod. The plant is the heart and soul of the city and, although the job losses appear to be limited, they will still have a large trickle-down impact.

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(News report from Issue No. 183, published on May 7 2014)