ArcelorMittal shares collapse as the company loses its assets in Kazakhstan

According to the Amsterdam Exchange, the stock value of ArcelorMittal fell more than 5% at the opening trading session on Monday following news about the transfer of the company’s assets in Kazakhstan to the country’s government.

Last Friday, ArcelorMittal shares were trading at €21.07 per item. On Monday at 2:00 p.m. Astana time, they were traded at €20.17 but then dropped to €19.98, marking a 52-week low.

The government of Kazakhstan announced that it wanted ArcelorMittal to sell its mining business in Kazakhstan this summer after an accident with five casualties at the Kazakhstanskaya mine, a facility controlled by ArcelorMittal Temirtau (AMT). At the time, ArcelorMittal’s stock value increased by 1.8% against the backdrop of rumors about the company’s intention to sell its assets to another investor.

However, after a massive fire at the Kostenko mine, which killed more than 40 people, the government said that it would nationalize the metallurgic plant. This means that the deal won’t be a standard market transaction and ArcelorMittal will likely sell the plant at a significant discount. In turn, ArcelorMittal said it’s been negotiating the deal with the government of Kazakhstan for several months. Last week, the two sides reached an «agreement in principle» on the deal concerning the nationalization of the plant.

The largest beneficiary of ArcelorMittal is the family of the holding’s founder Lakshmi Mittal (via a trust managed by HSBC). BlackRock also controls a 5% stake in the company while the remaining shares belong to minority shareholders or circulate in the open market. Over the past 28 years, more than 120 people have died in accidents at AMT’s mines in Kazakhstan.