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OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW
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DE RUEHTA #1697/01 2711042
ZNR UUUUU ZZH
O 281042Z SEP 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6427
INFO RUCNCIS/CIS COLLECTIVE 1987
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1356
RUEHKO/AMEMBASSY TOKYO 2055
RUEHUL/AMEMBASSY SEOUL 1007
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1542
RUEKJCS/SECDEF WASHDC 1418
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RHMFISS/CDR USTRANSCOM SCOTT AFB IL
RUEHAST/USOFFICE ALMATY 1900

UNCLAS SECTION 01 OF 03 ASTANA 001697 
 
SIPDIS 
 
STATE FOR SCA/CEN, EEB, OES/PCI (PHUDAK) 
 
E.O. 12958: N/A 
TAGS: ECON SENV KZ
SUBJECT:  KAZAKHSTAN:  ECOCENTER, ENVIRONMENTAL WATCHDOG; 
ARCELORMITTAL - MAJOR POLLUTER AND MAJOR ECONOMIC ROLE 
 
ASTANA 00001697  001.2 OF 003 
 
 
¶1.  SUMMARY:  Karaganda oblast, home to large coal mines, also 
boasts the large ArcelorMittal steel plant in nearby Temirtau, 
Kazakhstan's iron and steel center.  One of the world's pre-eminent 
steel plants, selling steel to more than 60 countries, ArcelorMittal 
is the only steel plant in the world that does not use natural gas 
as a fuel source in production.  Instead it takes advantage of the 
abundant, nearby supply of coal.  Although ArcelorMittal declares 
its desire to be a responsible citizen and reduce its pollution, it 
is torn between meeting environmental regulations and satisfying the 
global demand for steel.  NGO EcoCenter, the Karaganda regional 
environmental center that works closely with all regional 
environmental NGOs, local government officials, and the Ministry of 
Environment, reluctantly admits that ArcelorMittal has gradually 
reduced its pollution outflows into the Nura River after it adopted 
EU production standards.  However, EcoCenter insists that 
ArcelorMittal, which has not yet designated a person responsible for 
its environmental program, could do much better.  END SUMMARY. 
 
KARAGANDA'S REGIONAL ENVIRONMENTAL CENTER 
 
¶2.  EcoCenter, founded in 1992 immediately after Kazakhstan's 
independence, is the Karaganda oblast (regional) environmental 
center.  It works closely with regional environmental NGOs, local 
government officials, local businesses, schools, and the Ministry of 
Environment.  The Ministry funds EcoCenter publications in order to 
disseminate environmental information throughout the oblast.  The 
Center has also given out micro loans to women (from private funding 
in the United States), ranging from $500-2000, to help them start 
businesses.  More than 70 percent of those businesses are still 
thriving today.  Meanwhile, the government supported a "green" 
telephone project that established a hotline to report environmental 
problems or violations. 
 
SEEKING FUNDING IS NOT A BED OF ROSES 
 
¶3.  Although the government provides some funding, according to 
Lyudmila Kurtavtseva, Director of Karaganda's EcoCenter, 
environmental groups often must return up to 10 percent of a grant 
to officials as an "otkat" (kickback).  Currently, NGOs receive 
funding for only up to nine months, which also limits their ability 
to make significant change.  At the same time, she said, 
international donors generally are reluctant to finance projects 
outside their own "agendas" and priorities, and some have shifted 
away from Kazakhstan, because it is considered a "rich" country. 
Therefore, EcoCenter wants to become more self-financed. 
 
ARCELORMITTAL, LARGE COAL MINES 
 
¶4.  Kurtavtseva said Karaganda's large coal mines and the behemoth 
ArcelorMittal steel plant in nearby Temirtau are the main sources of 
pollution in Karaganda oblast.  The Nura River that runs through 
Karaganda is filled with their pollution.  Despite modest 
improvements from a recent EcoCenter project to clean up the river, 
the pollution remains serious.  In 2004, EcoCenter held a seminar 
with ArcelorMittal to show the benefits of production line 
modernization and pollution outflows reduction.  According to 
Kurtavtseva, although improvements occurred since the seminar, 
EcoCenter has been disappointed.  Instead of the quarterly seminars 
and presentations that they expected, they seldom meet.  The current 
financial crisis has led to a reduction in salaries and other 
"unnecessary" expenses. 
 
¶5.  Despite ArcelorMittal claims of significant pollution reduction, 
Kurtavtseva insists that outside observers disagree.  KazHydroMat's 
single station on the Nura River to monitor pollution flows is 
insufficient, she asserts.  She said they need at least four 
monitoring stations downstream from ArcelorMittal to gain a clear 
picture of the situation. 
 
ECOCENTER ALSO MONITORS NUCLEAR PLANT CONSTRUCTION 
 
¶6.  According to Kurtavtseva, EcoCenter also monitors the 
construction of nuclear power plants.  She said there is a 
laboratory in Semipalatinsk that monitors and conducts research on 
 
ASTANA 00001697  002.2 OF 003 
 
 
the effects of radiation on health.  (NOTE: Semipalatinsk is the 
Soviet Union's former nuclear test site in northern Kazakhstan where 
460 tests occurred, more than 100 of which were above ground weapons 
tests, and which hosts three of Kazakhstan's four nuclear reactors. 
Widespread radiation pollution exists in this region.  END NOTE.) 
Kurtavtseva claims Kazakhstan's 1998 law on the release of radiation 
into the air is inadequate, leading environmental NGOs to lobby for 
a better law. 
 
¶7.  Kurtavtseva said the United Kingdom's Department for 
International Development (DFID) funded a project on the military 
polygon in Semipalatinsk, researching the use of pasture land and 
plants to determine how much can return to normal use.  Although the 
area is partially closed, she said, people are returning.  She 
accused the Kazakhstani government of "not worrying about the 
safety," nor taking any measure to protect those now living on the 
land.  According to Kurtavtseva, several international organizations 
have studied the polygon.  Enough evidence now exists in 
Kazakhstan's National Nuclear Center in Semipalatinsk to draw 
reliable conclusions, but no entity thus far has accepted 
responsibility to clean it.  In the meantime, people continue to 
return to the polygon area to live. 
 
ARCELORMITTAL, AN IMPRESSIVE STEEL GIANT 
 
¶8.  ArcelorMittal, the third largest steel "combinat" during the 
Soviet era, is today one of the world's pre-eminent steel plants. 
ArcelorMittal operates non-stop and sells steel to 125 buyers in 
more than 60 countries.  According to ArcelorMittal Press Secretary 
Nikolai Kubrakov, the European Bank for Reconstruction and 
Development (EBRD) loaned ArcelorMittal money to purchase new 
equipment and modernize its production line to meet world standards. 
 Kubrakov proudly boasted that ArcelorMittal is far better than 
Chinese or Ukrainian steel plants, and he urged his American 
"compatriots" to come here to "learn how to make steel again."  REO, 
having seen several modern steel plants in China, agreed with 
Kubrakov that ArcelorMittal is among the best steel plants in the 
world. 
 
¶9.  According to Kubrakov, ArcelorMittal is the only steel plant in 
the world that does not use natural gas as a production fuel source. 
 Because the Karaganda region is rich in coal, fuel costs for 
ArcelorMittal are practically negligible, he said.  He acknowledged 
a "dirtier" steel production process has resulted.  Galina Drozdova, 
the steel plant's Environmental Protection Division Deputy Director, 
said that ArcelorMittal is a responsible citizen in Temirtau and the 
Karaganda region and wants to reduce its pollution as much as 
possible, "because we live here, too, and we don't want to live in a 
polluted city any more than anyone else does!" 
 
¶10.  Drozdova said the plant is attempting to comply with 
environmental regulations while struggling to meet the 
ever-increasing demand for steel.  According to her, the plant 
recycles about 80 percent of its waste, either inside the plant as 
part of its production process, or in the community.  Steel slag is 
used in road construction and river embankments, and blast furnace 
slag is utilized in cement production.  Steel production uses a 
tremendous amount of fresh water for cooling.  She said AcelorMittal 
recycles much of the water used, but it still discharges some back 
into the Nura River. 
 
¶11.  Even EcoCenter reluctantly admits that ArcelorMittal has 
gradually reduced its pollution into the Nura River since it decided 
to adopt EU production standards.  EcoCenter, however, still insists 
that ArcelorMittal, which has not yet designated a director 
responsible for its environmental program, could do much better. 
Kurtavtseva cited a Ministry of Environment report that claimed that 
ArcelorMittal did not demonstrate "meaningful" environmental 
improvement after its modernization project.  EcoCenter went to the 
EBRD and registered its complaints about the continued pollution, 
and the EBRD sent observers to monitor the situation, but they left 
with no tangible results. 
 
¶12.  COMMENT:  ArcelorMittal is the dominant industrial giant in the 
 
ASTANA 00001697  003.2 OF 003 
 
 
Karaganda oblast, and its company town of Temirtau exists only 
because of the plant.  Approximately half the city's residents work 
at the plant, and the rest in the support economy (restaurants, 
stores, supply, repair, and so on).  NGOs are working hard to reduce 
ArcelorMittal's and the local coal mines' impact on the environment, 
but the steel plant's dominant place in Kazakhstan's economy makes 
that a daunting task.  Partially thanks to EcoCenter's efforts with 
ArcelorMittal and the government's improved environmental 
protection, ArcelorMittal sees itself as a partner in this effort to 
reduce its impact on the environment.  Progress will be slow and 
gradual, but organizations such as EcoCenter -- almost invisible in 
rural Kazakhstan -- deserve our attention and support.  END 
COMMENT. 
 
HOAGLAND