ArcelorMittal's Russian mines under threat

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

Aman Tuleyev, who heads the Kemerovo region where the two coalmines 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.

Messages left with ArcelorMittal officials in Luxembourg were not immediately returned.

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 down two of the mines.

The Kemerovo region said workers at the mines were being paid in full, but that work was ``chaotic and untransparent.''

Coking coal is a key raw material for steel manufacturing. Tuleyev also 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.

Steelmakers have been hard hit by the global financial crisis and falling demand forced several Russian steelmakers to trim production and lay off staff.