The Government of Kazakhstan and ArcelorMittal Corporation have concluded a deal on the transfer of ArcelorMittal Temirtau JSC to Kazakhstan. Details of this agreement at a press conference was announced by the Minister of Industry and Construction Kanat Sharlapayev.

The Minister recalled that in August this year, President of Kazakhstan Kassym-Jomart Tokayev on the background of continuing accidents in JSC "ArcelorMittal Temirtau" pointed to serious violations of the company's investment and other obligations. The head of state then noted that for AMT is not excluded corresponding consequences of further stay in the Kazakhstan market.

At that time, the Government of Kazakhstan was already negotiating with the owners of ArcelorMittal Temirtau about the possible withdrawal of ArcelorMittal from the steel mill. They began after the tragic accident that occurred on November 3, 2022 at the Lenin mine, a subsidiary of AMT. 

The Government of Kazakhstan made specific demands to ArcelorMittal Temirtau.

As a result of intensive negotiations, on December 9, 2022, the Government of Kazakhstan and ArcelorMittal signed a Standstill Agreement, allowing the Kazakh side to conduct an assessment and audit of the enterprise. 

The Minister emphasized that during the negotiations, ArcelorMittal requested $3.5 billion, which did not correspond to the calculations of international consultants.

"This was one of the main reasons for the protracted negotiation process. Our goal was to acquire the mill at a fair price without allowing costly and protracted international litigation. The urgency and speed of negotiations were also dictated by the need to prevent the shutdown of the enterprise," Kanat Sharlapayev said.

According to him, the negotiation process consisted of 11 rounds, as a result of which both sides reached principled positions.

"The agreement between the Government of Kazakhstan and ArcelorMittal can be called a mega deal, it is of exceptional importance for our country. We have avoided a lot of risks faced by the governments of other countries," the Minister emphasized.

He also voiced three key elements of the deal: 

1. The state reduced the value of assets from $3.5 billion to $286 mln; 

2. Not a single tenge was spent from the state budget for the realization of the transaction; 

3. The new investor assumes obligations to the parent company ArcelorMittal to repay a short-term loan of $250 mln and a long-term loan of $450 mln within 4 years.

"I would like to emphasize that $286 million is the value of two fully operational businesses. In addition, ArcelorMittal does not make any claims against the Government of Kazakhstan. The agreement was reached within the legal framework, in full compliance with international legislation," Kanat Sharlapayev said.

Moreover, the Kazakhstan negotiating group, consisting of representatives of the Ministry of Industry and Construction and the Ministry of Justice, managed to convince ArcelorMittal to make a contribution of 16 billion tenge to support the charitable fund "Kazakhstan Khalkyna".

The funds, which will be transferred to the fund from AMT, will be used to solve urgent problems of the residents of Karaganda region and to implement socially significant projects. At the same time, 50% of this amount will be realized in Temirtau city.

#Industry #President's instruction #Press Conference