ArcelorMittal Kazakh unit plans $328 mln capex in 2012

March 6. Reuters. ALMATY

* 2012 Investment to focus on environment
* Crude steel output rises 10 pct yr/yr in 2011
* Exports constrained by markets, logistics

ArcelorMittal Kazakh unit plans $328 mln capex in 2012ArcelorMittal, the world’s largest steelmaker, is planning a $328 million capital expenditure programme at its plant in Kazakhstan this year after raising crude steel output in the Central Asian state by 10 percent in 2011.

ArcelorMittal Temirtau, the company’s Kazakh unit, said on Tuesday it produced 3.68 million tonnes of crude steel last year, up from 3.34 million tonnes in 2010. Rolled steel output increased to 3.17 million tonnes from 2.92 million tonnes.

“We have an ambitious investment programme for 2012,” Vijay Mahadevan, chief executive of ArcelorMittal Temirtau, said in a statement. Major investments would focus on the environment, including gas cleaning in the plant’s converter shop, he said.

The company did not give a forecast for 2012 steel output.

Mahadevan said growth in steel output last year was constrained by lower orders for some products and a deficit of rail wagons for export.

“In early 2012, we faced difficulties with selling our products in certain external markets,” he said. “We were able to recover some of the losses in shipments by expanding our sales in Kazakhstan and CIS countries.”

The mill sells more than half of its steel within the former Soviet Union, although a large portion – up to 35 percent – is traditionally sold to Iran, where Western sanctions on financial transactions have made it tougher to trade since the start of the year.

Mahadevan did not specify which markets were affected.

He said salaries at the steel mill, where Kazakh President Nursultan Nazarbayev once worked, had been increased by 3.7 percent. Trade unions have demanded a bigger wage increase and the company said negotiations with management would continue.

ArcelorMittal Temirtau employed 39,445 people at its steel, coal and iron ore enterprises as of Dec. 31, 2011. The Temirtau mill and associated coal mines are located in the Karaganda region of central Kazakhstan.

The company has previously said it intends to raise annual crude steel production at the mill to 6 million tonnes by 2015.