AMT’s parent company, the giant ArcelorMittal, is a merger between the largest and second largest steel companies in the world. In 2007, it earned $105.2 billion in revenues and reported a 5% increase in profits during the first quarter of 2008. In June 2008, the company announced plans to double its output in Kazakhstan in the next 5-9 years (1, 2). Civil society groups have questioned the need for EBRD and other IFI lending to large, highly profitable corporations. According to Bankwatch, AMT has already received IFI support for eight loans.
The Karaganda area faces serious environmental challenges from a long history of heavy industry and extractive mining. In 1997, EBRD approved a $293 million loan for the Ispat-Karmet Steel Works project in Temirtau, which promised improved safety, health, and environmental practices. Despite some gains in these areas, EBRD reported an accident and fatality frequency increase in 2004-2005. Similarly, a report by EcoMuseum in Karaganda, Kazakhstan, noted the vast environmental and safety hazards continuing in the mines. Kazakhstan’s government has listed Mittal Steel Temirtau (now AMT) as one of over 200 extractive companies yet to join EITI. Civil society and local residents are concerned about EBRD’s support for another project by a company with such a problematic record.
The latest Mittal Steel project has been assigned a B/1 environmental rating, which entails an environmental audit of AMT’s operations and an Environmental Action Plan (EAP) to monitor and reduce environmental dangers. In March 2008, AMT also announced a Stakeholders Engagement Plan. Civil society is seeking greater input in the project and access to information with the hope that EBRD will use its influence to promote greater engagement with civil society and responsiveness to local communities.
1. ArcelorMittal to double output (ArcelorMittal website)
2. ArcelorMittal First Quarter 2008 (Arcelor Mittal website)