Governor says ArcelorMittal could lose mines

MOSCOW — ArcelorMittal, the world’s largest steelmaker, could lose ownership of two West Siberian coal mines if it fails to bolster production, a Russian regional governor warned.

Aman Tuleyev, who heads the Kemerovo region where the two mines are located, made the warning to ArcelorMittal chief executive Lakshmi Mittal in a letter posted on the government Web site Thursday.

“If you are not able to stabilize production at these facilities, then we propose that you hand them over without compensation,” Tuleyev wrote in the undated letter.

ArcelorMittal’s three Russian coal mines are located in Kemerovo, about 3,000 kilometers (1,850 miles) east of Moscow. In March, ArcelorMittal said it could temporarily shut two of the mines — Pervomayskaya and Anzherskaya — to cut costs as demand for steel plunges and steelmakers reduce coal shipments.

But ArcelorMittal said Friday that it was in talks with the region over the fate of only one mine.

“Due to the exceptional economic environment, ArcelorMittal is in discussion with potential investors and the local government over the future of the Anzherskaya mine only,” the company said in an emailed statement. “The discussions are ongoing.”

The company declined further comment.

The Kemerovo region said workers at both mines were being paid in full, but that work was “chaotic and untransparent.”

Tuleyev wrote that he would seek to revoke the company’s exploration license at the large Zhernovskoye deposit if Mittal does not respond, the statement said.

He also insisted that he would not allow the two threatened mines to be shut.

“I, as governor, will not allow these mines to close,” he wrote. “I believe that the mines have enough coal reserves and we can find a market for them, and, most importantly, we have an experienced labor collective here.”

Steelmakers have been battered by the global financial crisis and falling demand for their product forced several Russian steelmakers to trim production and lay off staff. With Russia in its first recession in a decade, local governments have come under pressure from Moscow to forestall major job losses that could spark social unrest.

Coking coal is a key raw material for steel manufacturing.