ArcelorMittal shares fell 5% on news of the nationalization of a subsidiary in Kazakhstan

Shares of the international metallurgical group ArcelorMittal on the Euronext exchange are falling by almost 5%, reacting to information about the transfer of ownership of its ArcelorMittal Temirtau division to the government of Kazakhstan. As the agency notes Bloombergit is not yet clear whether Kazakhstan will pay ArcelorMittal for these assets, which include the metallurgical plant, mines, etc. Since the beginning of the year, ArcelorMittal shares have already fallen by more than 20.5% on Euronext.

ArcelorMittal reports that negotiations on the transfer of ownership of ArcelorMittal Temirtau began with the government of Kazakhstan several months ago. An agreement in principle on this was adopted a few days ago. And on October 28, at the Kostenko mine, owned by ArcelorMittal Temirtau, there was a explosion, which killed 45 miners. Expressing condolences to the relatives of those killed in the mine, ArcelorMittal management noted that it intends to transfer the rights to these assets to the Kazakh authorities as soon as possible in order to minimize possible interference with the work of the enterprises. “The parties are committed to achieving a result that would meet the interests of the people working at the plant and mines, as well as those supported by the activities of these enterprises,” ArcelorMittal said in a statement. As Bloomberg notes, since the mid-1990s, during the time when ArcelorMittal acquired these mining and production assets in Kazakhstan, tragic accidents have often occurred there. The most recent incident was a fire at the same mine in August of this year, which resulted in the death of four miners. In November 2022, five people became victims of a methane leak in another mine of the complex. ArcelorMittal notes that it has made significant efforts, especially in recent years, to improve safety performance at ArcelorMittal Temirtau enterprises. And the decision to transfer rights to the Kazakh government was “a new way forward to ensure the sustainability of operations.”

Alena Miklashevskaya