ArcelorMittal to spend $263 mln on Kazakh mines

ALMATY, April 24 (Reuters) - ArcelorMittal's (ISPA.AS) Kazakhstan subsidiary, criticised by the Kazakh government over safety standards, will spend $263 million this year to modernise its mines, a company source said on Thursday.

Kazakhstan has piled pressure on the company since an explosion at one of its Kazakh mines killed 30 miners in January. A blast at another mine killed 43 workers in 2006. Two earlier blasts, in 2002 and 2004, left more than 30 people dead.

The source, speaking after a meeting on Wednesday between Arcelor (MT.N) and Kazakh officials, told Reuters the company had started implementing a long-term programme to upgrade working conditions and equipments at its mines.

"The general prosecutor's office ordered a probe after the January explosion," the source said. "It was mainly to do with upgrading equipment because our equipment is quite outdated. So we said that this year we will spend a total of $262.8 million to modernise equipment."

Kazakh officials had previously said ArcelorMittal Temirtau, Kazakhstan's biggest steel mill, was using equipment dating back to 1948 at its mines.

"From our side we said that we have started implementing a programme which was coordinated with the Kazakh Emergencies Ministry after (the January blast)," the source said.

"It contained a coordinated plan, and one of its points was to upgrade all the equipment."

Kazakhstan, which is also a big global producer of copper and uranium, has alarmed investors operating in the resource-rich nation over past years by toughening its legislation and seeking to strengthen the state's role in key sectors.

Mining accidents are commonplace in the former Soviet Union, where safety practices tend to be less rigorous than at Western mines. Explosions in coal mines are most often the result of a build-up of methane. (Reporting by Tatyana Seroshtanova; Writing by Maria Golovnina; Editing by Quentin Bryar)