OREANDA-NEWS. August 16, 2010. State Property Fund of Ukraine (SPFU) confirmed fulfillment of the investor obligations by the OJSC “ArcelorMittal Kryviy Rih” during the inspection of the fulfillment of sale and purchase agreement of OJSC “Kryvorizhstal”.

According to the final resolution of inspection, signed by the State Property Fund representatives and “ArcelorMittal Kryviy Rih” management, the enterprise confirmed its obligations on all the items of the SPA, except for those that were postponed due to force-majeure (financial crisis) according to the Additional Agreement to the SPA, dated May 14, 2009.

In the course of the inspection, the State Property Fund confirmed that the following investor obligations are being currently implemented:

• preserving (increasing) the volume of production;

• implementing measures on work safety and safe working conditions and environment protection through tailing ponds restoration, re-cultivation of the land of open mines and dump areas, implementing ecological monitoring of the main pollution sources, implementing dust suppression measures during explosions at the open mines and on the nearby territories;

• implementing obligations in the monetary form according to the post-reprivatisation development concept (relining of the BFs, modernization of the benefication plants, mine reconstruction, technological re-equipment during the BF relining, modernization of the main metallurgical facilities, reconstruction of the oxygen station, reconstruction of the heating power plant etc);

• fulfillment of the obligation in the economic area (preserving main range of the competitive products, preserving main areas of economic activities, obeying the current legislation on the area of ensuring economic competition);

• obligations in the social area (timely payment of salaries, indexation of the salary level, maintaining the social infrastructure of the enterprise (recreational facilities, sanatorium, culture palace, recreational bases, dormitories), fulfilling annual plans of health protection measures for the employees and their family members at the recreational facilities and children camps, providing vouchers for health protection measures, ensuring expenses for the social infrastructure and conditions improvement at the level, not less than 0,5% of the amount of sold products, ensuring expenses for work safety measures at the level not less than 0,6 % of the amount of the sold products, decreasing share of production with harmful working conditions, continuing housing construction, providing medical insurance of the employees at the expense of the enterprise, opening new polyclinic for professional checkups of employees).

Olexandr Zozulya, Director for Social and General Issues, OJSC “ArcelorMittal Kryviy Rih”: “Despite the challenging economic conditions, “ArcelorMittal Kryviy Rih” keeps fulfilling its social investor obligations. Last week, on August 4, we have opened a new polyclinic, in which we invested 27 mln UAH and for which modern medical equipment was purchased. As of July 1, 2010, all our workers received medical insurance. We are finalizing construction of the two residential buildings and in September 165 apartments will be provided to our employees for free. All our recreational facilities are operating and overall 40,000 of our workers and their family members will spent their vacation in one of our recreational bases this year. In addition, 6 thousand employees will be provided with vouchers to go to other recreational facilities, 6 thousand kids of our employees will spend vacation in one of our children camps on the Azov and Black Sea shore. Our social infrastructure is working and we are entirely fulfilling our program of health protection and recreation of our workers”.

In the closing discussion with SPF, the management of the company has agreed further to respond positively to 2 remarks of the auditors. The next inspection by SPFU will take place at the beginning of 2011.

Rinat Starkov, CEO, “ArcelorMittal Kryviy Rih”: “Most important for us is the continuous dialog with the SPFU and the fact that the state through the SPFU has all the possibilities to control implementation of the investment obligations at our enterprise. During the course of the current inspection the SPFU representatives had an opportunity to see the on-going fulfillment of investor obligations, they had access to the necessary documents and an opportunity to discuss obligations fulfillment both with the management and with the TU representatives. We will continue cooperation with the SPFU in an open and transparent manner and I confirm our commitment to fulfill our investor obligations”.

Additional Info: Inspection by the SPFU is the main tool of control of the fulfillment of investment obligations by the enterprise after the privatization on the part of the state. Regular inspections by the SPFU at “ArcelorMittal Kryviy Rih” take place every quarter for the 5 years since the sale of the enterprise to the new owner. At least once a year representatives of the SPFU personally visit the enterprise to check fulfillment of the investor obligation.