MINEX Forum

Month: December 2023

  • Работникам QARMET выплатили зарплаты, которые не платил «АрселорМиттал Темиртау»

    Работникам QARMET выплатили зарплаты, которые не платил «АрселорМиттал Темиртау»

    Инвестор Андрей Лаврентьев, который купил металлургическую компанию «АрселорМиттал Темиртау» (сейчас QARMET), погасил задолженности перед работниками и поставщиками, сообщила на брифинге СЦК министр труда и социальной защиты населения Светлана Жакупова.

    Какая задолженность была у АМТ. Жакупова сообщила, что на погашение направили около 286 млн тенге.

    «Новый инвестор взял на себя обязательства по тем долгам, которые были у «Арселора», бывшего инвестора. И погашение задолженностей перед работниками, даже вплоть погашения задолженностей перед поставщиками. Около 286 миллионов будет направлено непосредственно на погашение задолженностей», — сообщила Жакупова.

    Министр добавила, что сотрудники уже получили деньги — задолженностей нет как по зарплате, так и по выплатам в ЕНПФ.

    Контекст. В начале декабря стало известно, что «АрселорМиттал Темиртау» столкнулся с финансовыми проблемами из-за блокировки своих счетов по решению суда. Причиной этого стал суд с подрядчиком ТОО Backup Service Resorts (BSR), который обслуживал питание и отдых работников АМТ.

    В компании тогда заявили, что из-за блокировки счетов не могут перечислить всем работникам пенсионные отчисления и взносы в Фонд обязательного медицинского страхования (ОСМС) за октябрь. В том числе пострадавшим во время аварии на шахте имени Костенко. Нуждающиеся в лечении горняки опасались, что могут остаться без медицинской помощи.

  • AzerGold to spend 2 million manats on research

    AzerGold to spend 2 million manats on research

    AzerGold has signed an agreement with Datum for 2 million manats.

    ABC.AZ reports that the agreement envisages purchase of satellite/satellite remote hyperspectral research services in the northeastern part of the Nakhchivan Autonomous Republic and in Kepez-Buzlug-Kyurekchai area.

    The cost of the contract is 1,867,947 manats.

    Datum LLC was registered in 2008. Its authorized capital is 110 manats. Jamal Ismayilov is company’s legal representative.

  • QARMET employees were paid salaries that ArcelorMittal Temirtau did not pay

    QARMET employees were paid salaries that ArcelorMittal Temirtau did not pay

    Investor Andrey Lavrentiev , who bought the metallurgical company ArcelorMittal Temirtau (now QARMET), has repaid debts to employees and suppliers, Minister of Labor and Social Protection of the Population  Svetlana Zhakupova said at a CCS briefing .

    How much debt did AMT have? Zhakupova reported that about 286 million tenge were allocated for repayment.

    “The new investor assumed obligations for the debts that Arcelor, the former investor, had. And repayment of debts to employees, even to the extent of repayment of debts to suppliers. About 286 million will be used directly to pay off debts,” Zhakupova said.

    The minister added that the employees have already received the money – there are no arrears either in salary or in payments to the Unified Pension Fund.

    Context. In early December, it became known that ArcelorMittal Temirtau faced financial problems due to the blocking of its accounts by court decision. The reason for this was a lawsuit with the contractor Backup Service Resorts LLP (BSR), which provided food and recreation services for AMT workers. 

    The company then stated that, due to the blocking of accounts, they could not transfer pension contributions and contributions to the Compulsory Medical Insurance Fund (CMHI) to all employees for October. Including those injured during the accident at the Kostenko mine. The miners in need of treatment  feared that they might be left without medical care

  • Kazakhstan plans to increase uranium production

    Kazakhstan plans to increase uranium production

    Uranium mining in Kazakhstan is carried out by NAC Kazatomprom, reports the Sputnik Kazakhstan website .

    Over the previous 7 years, the level of uranium production in the country has decreased annually by 20% due to market conditions, however, with an increase in buyers, the need for uranium mining also increases, so the level of production capacity will be increased.

    In particular, an agreement on the supply of finished products was signed with the UAE.

    The company also plans to reduce import dependence by starting the construction of a plant for the production of sulfuric acid, since sulfuric acid is an important component in uranium mining, and the quantity produced in Kazakhstan is not enough.

    In addition, it is planned to build an onshore processing complex in the Turkestan region and refining production of uranium oxide at the Ulba Metallurgical Plant.

    The cost of these projects is 130 billion tenge.

  • Is KarMet coming back?

    Is KarMet coming back?

    The deal for ArcelorMittal Temirtau has been completed. Now the company has come under the jurisdiction of Kazakhstan. This was announced by the Minister of Industry and Construction of the Republic of Kazakhstan Kanat Sharlapaev.

    As Kanat Sharlapaev stated, the decision-making center for the new Kazakh investor should be Kazakhstan.

    These should not be people who do not want to work in Kazakhstan or for whom Kazakhstan is part of their business. This is our position. If the decision-making center for an investor or group of investors is Kazakhstan, this is probably a better choice.Kanat Sharlapaev

    The minister also added that there is potential synergy between the current business of the Allur group and steel production.

    Everyone understands that cars are made of metal. And here, in this regard, to also achieve the production of automotive steel at KarMet (AMT) and integrate this with current businesses – there is normal business logic in this, because this allows us to reduce quite large logistics costs. Deepen the localization of this production. And at the same time, it is clear that this is not some kind of individual decision. A lot of people were involved in it. An entire government commission was involved in selecting investors. And we looked at who could handle it and for whom it really is the main business and somehow allows us to create a synergy effect with their current business.Kanat Sharlapaev

    The new investor of ArcelorMittal Temirtau is Kazakh businessman Andrey Lavrentyev, who is the chairman of the board of directors and shareholder of the Allur Group of Companies. The businessman acts as an independent Kazakh investor. Under the terms of the deal, he must invest three billion dollars in the modernization of the plant and mines, as well as fulfill all obligations regarding employee salaries and social packages.

    Of course, the new owner faces important challenges. First of all, it must create conditions for labor safety and improve the level of well-being of workers. He will also have to actively participate and help develop the local community through social projects.Akim of the Karaganda region Ermaganbet Bulekpayev said while in Temirtau during the presentation of the new investor to the heads of structural divisions of the steel and coal departments

    Meanwhile, the company called ArcelorMittal Temirtau will no longer exist. The company is awaiting rebranding. The new investor said that the company will return its old name – “KarMet”, and Vadim Basin will take the place of the general director. 

    Also, the Kazakh businessman, in addition to acquiring assets, undertakes to invest $3 billion in modernizing production and protecting the environment of the region, of which $1.3 billion will be invested next year.

    Meanwhile, the Prosecutor General’s Office announced a pre-trial investigation into the explosion at the Kostenko mine, which killed 46 people. The pre-trial investigation into this fact is carried out by special prosecutors of the General Prosecutor’s Office with the participation of employees of the Ministry of Internal Affairs, the AIC, the AFM and the Ministry of Emergency Situations.

    “It was established that the explosion initially occurred at the coal mining site of longwall No. 48K3-west from the ignition of a methane-air mixture emanating from the underlying coal seam K2, the source of which was mechanical sparking from the operation of the face scraper conveyor-2.”General Prosecutor’s Office

    The explosion led to a subsequent series of explosions in the mine workings of coal dust, the concentration of which significantly exceeded permissible standards.

    “The investigation established that during the operation of the mine, numerous violations of industrial and fire safety rules, as well as labor protection rules, were committed, directly related to the tragic event. At present, the management and engineering staff of the mine, numbering 7 people, are suspected of failing to ensure safety measures during coal mining.”General Prosecutor’s Office

    The suspects, in accordance with Article 128 of the Code of Criminal Procedure, were placed in the temporary detention center of the DP in the Karaganda region. It is noted that as part of the investigation, a legal assessment will also be given to officials of ArcelorMittal Temirtau JSC and the Department of Industrial Safety of the Ministry of Emergency Situations for the Karaganda region, who did not ensure proper control over the safe operation of the mine.

    The investigation is ongoing and is under special control.

  • A regular meeting of the Coordination Council on coal exchange trading was held

    A regular meeting of the Coordination Council on coal exchange trading was held

    A meeting of the Coordination Council was held at the site of the Ministry of Trade and Integration of the Republic of Kazakhstan.

    During the meeting, business games were held at 3 commodity exchanges (JSC Caspian Commodity Exchange, JSC Commodity Exchange Eurasian Trading System, JSC Commodity Exchange Modern Trading Solutions).

    Business games simulated trading in municipal coal from six sellers (Karazhyra JSC, Maikuben-West LLP, Razrez Kuznetsky LLP, Mining Company SatKomir JSC, Shubarkol Komir JSC and Shubarkol Premium JSC ).

    Regional operators participated in business games on a regional basis, depending on regional needs.

    The meeting was attended by representatives of local executive bodies, government agencies and private businesses (regional operators and coal companies and commodity exchanges).

    Based on the results of the Coordination Council, recommendations were made on establishing the maximum amounts of membership fees and the exchange commission, approving trading instruments for municipal coal for each region, forming the annual coal demand for 2024 broken down by month, etc.

    Let us recall that by Order of the Ministry of Trade and Integration of the Republic of Kazakhstan dated December 6, 2023 No. 420-НК, changes were made to the Rules of exchange trading in the coal section regarding the sale of coal only to regional operators included in the information of the Ministry of Industry and Construction, in the context of each region in order to ensure uniform meet regional needs.

    The rules come into force on December 22, 2023.

    To ensure transparency of pricing in the coal market in order to prevent sharp price increases, sellers will ensure the sale of municipal coal through the commodity exchange in the following order:

    50% of the volume is sold at spot trading;

    50% of the volume is sold subject to monthly payment and delivery for a period of 6 to 12 months.

  • Seequent strengthens its presence in Central Asia and opens a regional hub in Kazakhstan

    Seequent strengthens its presence in Central Asia and opens a regional hub in Kazakhstan

    Alocal team of specialists will work to implement leading exploration software for mining, energy, infrastructure and environmental projects.

    Seequent , Bentley’s subsurface exploration and modeling division, has announced an expansion of its presence in Central Asia. The company opens a regional hub in Kazakhstan, represented by a team of local specialists. Seequent thus confirms its commitment to providing advanced exploration software solutions to the rapidly growing local market and throughout Central Asia.

    News of the regional hub was announced last week at the Seequent event in Almaty, where the company’s partners and clients, as well as leading industry representatives, gathered. Seequent has been supporting the Central Asian business community since 2011. The region’s largest companies are already using Seequent software for subsurface modeling, data analysis, management and collaboration. This allows for a better understanding of the underground component for the mining and energy industries, as well as civil infrastructure and environmental projects.

    (From left to right) Colin Hay, Inna Shalovenkova, Alexander Frolov, Head of Client Solutions Group, Lada Khimanych, Commercial Support, and Igor Danilov, Key Account Manager at Seequent. Image courtesy of Seequent.

    Colin Hay, Executive Vice President EMEA, said: “ Expanding Seequent’s presence in Central Asia is an important step in our global strategy. Kazakhstan, located in the heart of the region, was an ideal choice for a regional hub. Kazakhstan’s robust economy, abundant metal reserves, prime location and focus on attracting foreign investment make it stand out as a key market for Seequent solutions.”

    He further added: “ We see growing demand for our products as they fully meet the needs of the local industry, which is looking for digital innovation to improve operational efficiency. We intend to continue to expand our team as we ramp up our operations in Central Asia .”

    Seequent offers software solutions for professionals including geologists, geophysicists, geochemists, geotechnical and geomechanical engineers, hydrogeologists, ecologists, as well as builders, structural designers, quarries and underground mine workers. The company’s products include leading 3D implicit geological modeling solutions Leapfrog and Oasis montaj, which have become the industry standard for working with geophysical data.

    “ Seequent products help make these professionals’ jobs easier, more efficient, and enable them to share data with colleagues anywhere in the world ,” says Hay.

     

  • How ArcelorMittal is losing its leading position in the global steel market

    How ArcelorMittal is losing its leading position in the global steel market

    In 2022, the company took second place in the ranking of global steel producers. In 2023, Chinese companies are likely to displace ArcelorMittal into third place

    The overcapacity and deteriorating steel market conditions that have been observed since the beginning of Russia’s full-scale invasion of Ukraine have had a negative impact on global steel producers, especially the large ones with plants around the world, including ArcelorMittal.

    Since the bulk of ArcelorMittal’s steelmaking capacity is located in Europe, the war in Ukraine has a significant impact on the company’s production results. Macroeconomic problems, rising production costs along with low demand for finished products and other factors have been negatively affecting the results of the European division for almost two years in a row. In addition, the company’s Ukrainian unit has significantly reduced its capacity utilization during the war.

    In January-September 2023, ArcelorMittal reduced steel production by 3.1% y/y – to 44.4 million tons, and in the third quarter of 2023, it increased by 2% y/y – to 15.2 million tons. This means that the company is unlikely to produce as much steel, as it did in 2022, because  the fourth quarter results are expected to be worse than the third quarter due to production shutdowns and restrictions at some plants in Europe, Africa and Brazil, and the loss of a plant in Kazakhstan.

    In 2022, ArcelorMittal produced 59 million tons of steel, down 14.6% compared to 2021. The company was then ranked second among global steel producers after China Baowu Group (131.8 million tons). China’s Ansteel Group (55.65 million tons) took third place with a small gap. Thus, in 2023 the gap between Ansteel and ArcelorMittal may narrow even further, or the Chinese producer will take second place, as China is gradually increasing steel production in 2023, and production restrictions for the current year have not yet been implemented.

    ArcelorMittal’s results in the fourth quarter of 2023 are likely to deteriorate as the company has been suspending or reducing the use of its European operations, particularly at its plants in Belgium, France, Germany and Bosnia and Herzegovina, since early fall. The suspended capacities include blast furnace (BF) A in Belgium, BF No. 1 in Fos-sur-Mer (France), BF and rolling lines in Zenica (Bosnia and Herzegovina), and a coke oven battery in Krakow. At the plants in Hamburg and Bremen (Germany) and Sosnowiec (Poland), some units are temporarily shut down during the fall and winter periods. The company decided to permanently shut down its pipe division in Poland due to unprofitability.

    ArcelorMittal is also experiencing liquidity problems and is cutting steel production at Acciaierie d’Italia (ADI), the largest and only integrated steel producer in Italy. The company is 62% owned by ArcelorMittal and 38% by Invitalia. Currently, the troubled plant is on the verge of shutting down due to the main shareholder’s unwillingness to invest in its rescue and further development.

    In addition to the European division, the company’s South African and Brazilian assets have been suspended.

    Recently, ArcelorMittal Brasil confirmed that it is temporarily suspending production at three steel mills in southeastern Brazil due to low domestic demand and unprecedented levels of imports. The temporary shutdown affects the plants in Juiz de Fora (a major producer of long products), Piracicaba and Resende, where a “technical” break will be announced until December. This will lead to a drop in steel production in the country by about 1.2 million tons per annum in 2023.

    ArcelorMittal South Africa (AMSA) announced at the end of November that it plans to wind down its long products operations. The decision was driven by weak demand, ongoing infrastructure problems and the worsening power crisis. The move will affect the Newcastle Works, Vereeniging Works and rolling mills that use Newcastle Works products as raw materials.

    In addition, due to the constant accidents with fatalities, the Kazakh authorities decided to terminate investment cooperation with the shareholders of ArcelorMittal Temirtau. By December 2023, the country intends to close the deal to acquire the plant by an unnamed Kazakh investor.

    ArcelorMittal’s Ukrainian unit is currently operating at 30% of capacity and produced 390 thousand tons of steel in the first half of 2023, down 57% y/y. Amid the war, the company is unable to increase production due to the threat of shelling and logistical problems.

    «A few years ago, ArcelorMittal gave up its status as a global leader in terms of production volumes, ceding this position to Chinese companies. Instead, ArcelorMittal has focused on product quality. Reducing production is a logical consequence of this strategy. Moreover, production cuts can be explained now by additional reasons related to the market conditions», said Andriy Glushchenko, GMK Center analyst.

    In January-September 2023, ArcelorMittal’s ACIS segment, which includes plants in Ukraine and Kazakhstan, reduced steel production by 6.8% y/y – to 5.18 million tons.

    Thus, the impact of the above factors is gradually reducing the importance of ArcelorMittal in the global steel market. The company is unlikely to be able to maintain its leading position, which is being taken over by Asian companies.

  • “Lydian Armenia”: Construction work will begin on the territory of the Amulsar mine in 2024

    “Lydian Armenia”: Construction work will begin on the territory of the Amulsar mine in 2024

    The situation surrounding the operation program of the Amulsar mine had a negative impact on the investment image of Armenia. Hayk Aloyan, executive director of Lydian Armenia, stated this during a forum on the development of the Zangezur Copper-Molybdenum Combine (ZMCC) on December 19.

    He recalled that Lydian was the first company from Armenia whose shares were listed on the Toronto Stock Exchange.

    “The loss of companies and individuals of their shares had a negative impact on all sectors of the Armenian economy, and not just the mining industry. The security issues that have arisen over the past five years have had the same impact,” he said.

    Aloyan said that the Lydian Armenia company has made serious efforts, and this has led to the fact that since 2023, with the support of partners and the Government, it was possible to begin engineering work on the territory of Amulsar.

    “This stage has been completed, and construction work will begin in 2024,” emphasized the executive director of Lydian Armenia.

    He believes that Armenia’s investment reputation can be restored if the operation of the Amulsar mine is started.

  • Problem point: the export figures of the Armenian mining industry are far from ideal

    Problem point: the export figures of the Armenian mining industry are far from ideal

    The authorities acknowledge the existence of problems associated with exports in the mining industry, which are not always made known in a timely manner. The corresponding statement in a conversation with journalists on December 19 was made by the Deputy Minister of Territorial Administration and Infrastructures of Armenia Hovhannes Harutyunyan.

    He assured that in terms of statistics, the Government is not keeping anything related to the non-functioning of the Sotsky mine secret. “The Teghout mine did not work for about 7-8 months,” Harutyunyan noted.

    He emphasized that Armenia ranks quite high in terms of transparency and accountability in the mining sector. “We are constantly tightening standards,” the official was quoted as saying by Armenian News.

    Meanwhile, the Zangezur Copper-Molybdenum Combine presented another report on sustainable development.

    General Director of ZMMK, Roman Khudoliy, noted in his welcoming speech: “We are confident that the path to mutually beneficial development of all stakeholders and making the maximum contribution to the economic progress of Armenia is the introduction of a responsible approach in all areas of our activities. This year, I am especially proud that we are publishing not only a Sustainability Report, but also conducting the first industry study based on TCDF principles in Armenia. This report includes not only our achievements, but also our omissions, and this is proof of real responsibility. Sustainability is not an end point, but a challenging endeavor and an ongoing journey that we take every day.”

    Deputy of the People’s Assembly of the Republic of Armenia, Chairman of the NA Standing Committee on Economic Affairs Babken Tunyan noted the importance of publishing the Sustainable Development Report, noting that this is a responsible approach to work. “It is gratifying that one of the pioneers of this style of work is ZMMK, which, as the largest mining company, becomes the standard and sets a new bar for the entire mining industry.