Government completes takeover of ArcelorMittal assets in Kazakhstan

The Kazakh government has completed the takeover of steel tycoon Lakshmi Mittal’s mining and metal enterprise in the country, the industry minister said on Friday.

Minister Kanat Sharlapayev said the state fund Qazaqstan Investment Corporation had bought all shares in ArcelorMittal Temirtau and ArcelorMittal Tubular Products Aktau JSC.

The assets will in the next few days be handed over to Kazakh businessman Andrey Lavrentyev, the owner of the Allur Group of Companies, who has pledged to invest 3bn dollars to modernise the enterprise, the minister told journalists.

The government announced its decision to find a new investor for the industrial combine in October, following an explosion that killed 46 miners — the deadliest accident at the enterprise under ArcelorMittal’s management.  

President Tokayev described AMT after the accident as “the worst company in our history in terms of cooperation with the government and local management”. 

Minister Sharlapayev said that ArcelorMittal estimated its Kazakhstan assets at 3.5bn dollars, but “the government and international consultants disagreed”.

He said it was “very important” for the government to make sure that the takeover deal would allow the enterprise to continue to operate without losing any jobs.

“In the end, the two assets in question, ArcelorMittal Temirtau and Aktau Tubular Products were assessed at 286m dollars. This is how much ArcelorMittal got for these two assets,” Sharlapayev said.

He added that ArcelorMittal had no further claims against Kazakhstan.

Lavrentyev is 26th on Forbes Kazakhstan’s list of the country’s most influential business people. His Allur Group of Companies includes car makers and car dealers representing such brands as Chevrolet, Kia, LADA and Mitsubishi.

There have been reports alleging that Lavrentyev’s companies have been involved in helping Russia to get around the international economic sanctions by supplying it with agricultural machinery and banned engineering products.

The Luxemburg-registered ArcelorMittal took over the Soviet-built Karaganda Metal Works (KarMet), a huge complex of iron ore and coal mines, and a steel plant, in 1995.  

It was a time of uncontrolled post-Soviet privatisations, when many major state-owned industrial assets landed in private hands under dubious deals.  

About 200 AMT workers died in various accidents, including the latest, over the 28 years of ArcelorMittal’s management. The frequency of accidents has increased in the past few years. 

AMT was also persistently criticised for not doing enough to improve environmental safety. One day in 2018 Temirtau was covered in black snow; in 2021 it was carpeted in magnetic dust.

In September, following an accident in August that killed five miners, the government said it was in talks with potential new investors.  

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