Russian regional governor said ArcelorMittal could lose coal mines

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 kilometres (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.

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.

Canadian Press