ArcelorMittal Kazakh Unit Rejects Demand for 30% Salary Increase

ArcelorMittal (MT)’s Kazakh unit rejected a call by workers for a 30 percent pay increase because of weaker demand for steel products and the need to set aside funds to upgrade its plants.

The labor unions representing AO ArcelorMittal Temirtau’s 35,300-person workforce have declined the latest wage offer from management to adjust salaries for inflation and discuss other increases after a sales target for rolled steel is reached, the unit of the world’s biggest steelmaker said in an e-mailed statement today.

“Protest actions and meetings won’t help to fulfil the company’s production tasks and solve the issue of the wage increase,” Vijay Mahadevan, the general director of ArcelorMittal Temirtau, said in the statement.

The company has been in talks with its workers over pay raises since October, according to the statement. Demands for salary increases by oil workers in western Kazakhstan triggered strikes and violence last year, leading to the death of 16 people after police used arms to suppress unrest in Zhanaozen during Independence Day celebrations on Dec. 16.

Employees of ArcelorMittal’s Kazakh unit condemned the riots in a Dec. 18 letter, criticizing “statements that disguise the events as a labor fight.”

The labor union plans a meeting to demand higher salaries, Roman Ilto, a Temirtau-based spokesman for the company, said by phone today. ArcelorMittal Temirtau faces difficulties with the sale of rolled steel products after orders dropped at the end of last year, Ilto said, without elaborating.

To contact the reporter on this story: Nariman Gizitdinov in Almaty at ngizitdinov@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net.

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