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ArcelorMittal sues Kazakhstan striking miners in pay dispute

ArcelorMittal's Kazakh subsidiary ArcelorMittal Temirtau is suing hundreds of striking workers who are staging an underground sit-in over a pay dispute, the company's press office told S&P Global Market Intelligence. The protest began on Dec. 11 when 200 miners refused to come to the surface at the end of their shifts, demanding a pay increase and better working conditions.

Since then, ArcelorMittal has been in negotiations with the disgruntled workers. The company said that every day this week the head of the coal division, Tanat Dauov, has visited the Tenteskaya mine and that on Dec. 14 around 100 miners abandoned the demonstration.

"Today I visited the mine four times and explained to the miners that the sit-in are not the right way to resolve the issue and that they should leave the mine immediately and proceed with negotiations. Miners are leaving the Tenteskaya mine today. I brought 37 people up with me," said Dauov in a statement.

According to the latest figures, the company said 400 people are still striking underground in the Kazakstanskaya, Tentekskaya and Lenina mines. The strike action has ceased at ArcelorMittal's other operations in Kazakhstan.

Previously, Kazakh Labor Minister Tamara Duisenova said there were 684 miners underground, demanding a pay increase of 100% and a reduction of the pension age to 50.

Maxim Khudalov, director of corporate rating group ACRA, said that suing the strikers would likely have very little effect on the situation.

"Given that a similar strike took place at Kazakhmys' Zhezkazgan South mine on Nov. 30 and the result was an increase in wages for strikers, I am expecting ArcelorMittal to be forced to increase payment for striking miners and reduce fines for violation of safety rules and mine rules," he said.

As for the overall effect on production, he said that the mines involved in the strike have an annual capacity of 7 million tonnes of hard coking coal and if the strike lasts a week that would mean a loss of 130,000 tonnes.

"That is not a material decline in output so I guess it would be covered by higher output after the end of the strike," said Khudalov.