ArcelorMittal Temirtau - a never ending story - EBRD AGM Issue Paper

For three years already ArcelorMittal Temirtau (AMT), financed by the European Bank for Reconstruction and Development (EBRD), has been implementing the USD 100 million Mittal Steel Temirtau - Coal Mine Modernisation project that was approved by the bank in 2007.

Since the project was approved there has been a dramatic change of economic situation in Kazakhstan. The same company that was seriously criticised by the Kazakh government for poor health and safety practices and frequent accidents at its coal mines involving the deaths of tens of workers has become a key actor in the game that the government has been playing with investors while trying to save jobs.

In October 2008 the Government of Kazakhstan signed a memorandum of understanding with AMT to prevent thousands of workers from being dismissed, granting at the same time delays in environmental obligations, as well as providing reduced social tax and state subsidies such as lower prices for energy and railway rates, and guaranteed state purchase of steel.