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ArcelorMittal Temirtau, Kazakhstan


Image: Martin Skalsky

In 2007, ArcelorMittal (AM) received a loan from the European Bank for Reconstruction and Development (EBRD) to support further improvements of health and safety practices in its mining complex ArcelorMittal Temirtau (AMT).

ArcelorMittal’s success in securing yet another loan by a public finance institution contrasts starkly with the shortcomings of the previous AMT improvement project that was supported by the EBRD and the International Finance Corporation (IFC).

Bankwatch, the Center for Introduction of New Environmentally Safe Technologies in Kazakhstan and the coalition Global Action on ArcelorMittal (GAAM) have called for greater transparency and participation in project planning and implementation and for more scrutiny by the EBRD to ensure the effectiveness of activities financed by its loans.

Arcelor Mittal and the mining complex in Temirtau

Temirtau is a town with a population of 170 000 in the Karaganda region of Kazakhstan. Founded in the early 20th century, the city rapidly expanded with the opening of its massive steelworks during the 1950s. Temirtau is heavily dependent on the steelworks for employment.

ArcelorMittal acquired the metal and mining complex in 1995. The ArcelorMittal Temirtau complex (AMT, formerly Mittal Steel Temirtau and Ispat) includes eight coal mines and one of the world’s largest integrated steel plant (i.e. a plant realising the full production cycle).

ArcelorMittal’s social and environmental record in Temirtau - the EBRD-IFC loan (1997-2006)

Temirtau remains one of the most polluted cities in Kazakhstan. There is no evidence of an improved environmental situation.

In 2006 ArcelorMittal completed a project supported by an EBRD and IFC syndicated loan of 250 million USD (approved in 1997). One of the project’s objectives was to improve the environmental and health and safety performance of ArcelorMittal Temirtau through the implementation of three Environmental Action Plans (EAPs).

Despite the EBRD’s claims that the project was implemented successfully, Temirtau remains one of the most polluted cities in Kazakhstan and there is no evidence of an improved environmental situation. In March 2010 the Karaganda Regional Prosecutor’s Office fined AMT for excess air pollution and for having no documentation for recording the main environmental characteristics of the operation procedures.

Equally poor is AM’s record regarding the health and safety performance of its Temirtau coal mines. More than a hundred miners have died in a number of accidents in the years 2004-2010. The frequency of accidents and number of deaths naturally raises questions about AM’s implementation of the project.

Old wine in new bottles? A new EBRD loan in 2007

In 2007 and only a year after completion of the first project, the EBRD approved another USD 100 million loan for AMT, which aimed to “support further improvements to the Mittal Steel Temirtau’s health and safety practices at its coal mines in Karaganda with the aim to bring them in line with international best practice”.

During 2008 and 2009 AMT has reported that new equipment has been installed in the Karaganda coalmines, both with the EBRD money and its own investments. However AMT withholds more detailed information that is crucial for a proper assessment of its performance:

  • AMT does not release the details of its health and safety investments, such as the schedule for the EBRD’s project implementation, or the already implemented, planned, postponed or cancelled activities.
  • Neither did it disclose the Environmental Action Plan - required for the EBRD loan and of great public interest given the heavy pollution in Temirtau.
  • The local company manager internally approved the Stakeholder Engagement Plan (SEP) within the EBRD project. The very stakeholders the SEP is supposed to engage were not consulted. In addition, the SEP does not specify AMT’s commitments on what environmental and social information it will disclose.

This lack of information makes it impossible to monitor how effectively public money is being spent.

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Latest developments


 

Bankwatch in the media | June 9, 2011

No-one who has driven between Bloemfontein and Johannesburg could fail to have noticed the haze, stench and massive steelworks near the motorway. But Amsa is not the only polluter in the area. Sasol, Eskom power stations and, in winter, household coal fires also contribute to the horrible air quality

Press release | February 10, 2011

Hundreds of people are expected to attend a protest against illegal levels of air pollution from the local ArcelorMittal steelmill this Friday afternoon. The action has been organized through social media and is supported by local NGOs Dosta! and Zenica Eko-Forum.

Blog entry | November 5, 2010

ArcelorMittal, one of the candidates for the worst EU lobby award, is the world's largest private steel company, producing 10 per cent of the world's steel. It is also one of Europe's largest emitters of CO2. Yet the company successfully lobbied the European Commission on behalf of Europe's biggest polluters to continue getting free greenhouse gas emissions permits until at least 2020.

Blog entry | March 11, 2010

Although the world's largest steel company, ArcelorMittal continues to receive support by international public finance. Neither does its chequered social and environmental record seem to change the public bank's proclivity for this specific borrower.

Press release | May 12, 2009

ArcelorMittal needs to move beyond good intentions on environmental and social improvements and turn words into deeds. Despite its rhetoric on social responsibility, the company continues to destroy the environment, risk peoples lives and displace local communities, according to a new report launched today by the Global Action on ArcelorMittal coalition to coincide with the company's annual shareholder meeting in Luxembourg.

Publications

Bankwatch Mail | October 9, 2012

With the EBRD due to sign off on its new mining strategy in November this year, 22 MEPs have pointed out in an open letter to European commissioners that given the state of the policy draft the bank risks contradicting the EU Resource Efficiency Roadmap and responsible mining principles. At risk of being compromised too, Bankwatch believes, are the EU's 2020 strategy and EU commitments on climate change and biodiversity protection.

Bankwatch Mail | May 14, 2012

The EBRD's development of a new Mining Strategy saw the publication last month of a draft that will now be consulted on. Among the passages in the draft to catch the eye are “Multi-national firms act as demonstrators of best (or at least better) practices in those EBRD countries of operations where EHS&S (Environmental, health, safety and social) legislation is lacking”, and that “investments by major international mining operators in local mining sites in the EBRD’s countries of operations have often led to rapid and significant improvements in the safety of workers, due to safety standards that generally exceed the most stringent local health and safety requirements”.

Study | August 15, 2011

ArcelorMittal received a loan from the European Bank for Reconstruction and Development (EBRD) for health and safety improvements in its Kazakh coal mines. While fatal accidents at the mines continue, the company has so far not provided sufficient information to allow the project's assessment. We visited Temirtau to talk with miners directly about the company's health and safety performance.

Video testimonies can also be seen on our website.

Official document | August 17, 2010

The complaint was filed by Client Earth and Bankwatch to the EIB complaint office after the EIB signed a loan to steel giant ArcelorMittal that was still under investigation from a previous complaint.

Briefing | May 10, 2010

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.