Arcelor Mittal, the world’s largest steel producer, is under fire from the EBRD and campaign groups for repeated failures to improve transparency at its Temirtau steel and mining complex in Kazakhstan.
The company is accused of doing too little to improve relations with a community that suffered 35 deaths last year in two mine explosions at the complex.
Methane explosions have killed 99 miners all together in the past five years at the eight pits in the complex, which was bought by the Mittal group from the Kazakh government in 1995.
The company is spending $230 million to replace outdated mining equipment. It was granted a $100 million loan from the EBRD for safety upgrades in 2007.
The campaign groups’ anger is focused on a Stakeholder Engagement Plan (SEP) that Arcelor Mittal presented last year, in response to earlier criticisms of its record on health and safety, and environmental impacts.
The SEP committed the company to release the Environmental and Social Action plan it signed with the EBRD, and other documents, by December last year. But when the deadline passed, and NGOs asked where the documents were, Arcelor Mittal managers said the SEP was just a draft.
NGOs, who say greater transparency is vital if the company is to win the local community’s trust, carried their protest to Arcelor Mittal’s annual meeting in Luxemburg on Tuesday. Senior managers who met them again said the SEP was a draft – but said they would now consider releasing the Environmental and Social Action plan.
Dana Sadykova of Karaganda Ecological Museum told Emerging Markets: “We want to know how the safety improvements are being implemented; so do the groups working in the community to defend miners’ rights. But far too little information has been released.”
Alistair Clark, corporate director (environment and sustainability) at the EBRD, said the bank shared concerns about the SEP and added: “The NGOs have done a great job in focusing our attention on the safety and environmental issues.” The EBRD commissioned independent consultants to examine standards at Temirtau and was talking to the company about the results of that review. Thirty lives were claimed by a methane explosion at the Abaiskaya mine in January last year, and five at the Tentekskaya mine in June.
The Kazakh general prosecutor’s office announced last month the preliminary results of an investigation, which highlighted the role of underground equipment that was “extremely worn out” and required replacement. It said that in the Kostenko mine, equipment installed in 1948-65, with a 20-year working life, had not been replaced. The prosecutor has started proceedings against managers of all eight mines in the complex.
Charlotte Wolss, corporate responsibility manager at Arcelor Mittal, said there has been “a massive step change in corporate governance” at Temirtau. Safety is “a priority”, and investment in it had been continued while all other investments had been cut.