Deadly mine accident: bad investor, good government?

30.10.2023, 04:10 exclusive.kz

A powerful explosion ripped through the Kostenko Mine on Saturday, killing 45 miners – the deadliest accident ever at Kazakhstan’s largest steel and mining enterprise controlled by steel tycoon Lakshmi Mittal. The official rhetoric pointed the finger of blame at the investor. The government swiftly announced the nationalisation of ArcelorMittal Temirtau. However, it is not a simple story about a bad investor. President Tokayev, who flew to Temirtau the same evening, described AMT as “the worst company in our history in terms of cooperation with the government and local management”. He said the company was going to be nationalised, and appointed Karaganda Region’s deputy governor Vadim Basin as AMT’s new boss, adding that “the current management is good for nothing”. ArcelorMittal confirmed the takeover the same day, saying “a preliminary agreement” had been reached. It pledged “to conclude the deal as soon as possible”. After Saturday’s tragedy, pro-government MP Nikita Shatalov accused ArcelorMittal of failing to deliver on its promises to modernise production and improve safety. “Nothing has changed since the 1990s … People are continuing to die. Mittal and his managers do not care what happens to our citizens,” he said on his Telegram channel. “The government must finally stop trying to talk to Arcelor [about improvements]. Our country does not need an investor like that,” he added. Public opinion, however, does not put all the blame on the investor. According to journalist Azamat Maitanov, a majority of people in Karaganda – the centre of the country’s mining industry – blame the poor state of things at AMT on the local authorities, alleging that “the investor has put in millions of dollars in safety measures, but the money lands in officials’ and mine managers’ pockets”. Maitanov also alleged, in a post on his Telegram channel, that Mittal’s departure from the country was “inevitable” because his business deal was with the former president Nursultan Nazarbayev, and the government of President Tokayev wants to review it. Journalist Jolymbet Makish said that Mittal’s disregard of Kazakh laws “simply mirrors our own officials’ attitude to them”. Blogger Ainash Kerney called for full transparency about the government’s investment contact with Mittal. She demanded that the information about how much Mittal paid for the Temirtau coal mines, how much he invested in their modernisation, and how much he paid in taxes be made public. 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 chaotic post-Soviet privatisations, when many major state-owned industrial assets landed in private hands under dubious deals, overseen personally by former President Nazarbayev. From the outset, for Mittal it was a cheap investment without earnest, long-term commitment. He, we can safely guess, had personal guarantees from Nazarbayev, which, along with general official corruption in the country, allowed him to get away with minimal concerns about environmental and labour safety issues. The air pollution in Temirtau is notoriously bad. One day in 2018 the town was covered in black snow; in 2021 it was carpeted in magnetic dust. 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. In September, following an accident in August that killed five miners, the government said it was in talks with potential new investors. It means that rather than becoming ‘the last straw’, Saturday’s accident has been used by the government as a convenient backdrop for announcing something that has already been decided. The appointment of Basin, who is not ethnic Kazakh, has given rise to speculation about government plans to transfer the industrial complex to Russian investors. Maitanov said that Basin was “known in the region for his pro-Russian views”. Makish also described Basin as “pro-Russian”. “So, we are just replacing one evil with another,” he said. The government has, in a brief statement, said it is “not considering handing over AMT to other foreign investors”. If that’s true, Tokayev’s government has on its hands a giant industrial facility which gives jobs to thousands of people. So, all the environment-related issues around coal mining in general aside, it must be kept going. The enterprise badly needs costly technological upgrades — not upgrading would mean further, potentially deadlier accidents. Will the government do better than Mittal?