Ukraine may nullify the sale-purchase agreement it concluded in 2005 with the world's largest steel producer ArcelorMittal for the sale of Krivorozhstal (currently known as ArcelorMittal Kriviy Rih) due to the non-fulfillment of certain purchase obligations.
The Ukrainian State Property Fund (SPF) has informed the Ukrainian Cabinet of Ministers of the necessity of allocating funds to initiate court proceedings for the purpose of the nullification of Krivorozhstal's sale-purchase agreement.
As a result of an audit conducted by the SPF on March 24-28, 2008, it was determined that ArcelorMittal had not fulfilled certain articles of the sale-purchase agreement. The articles in question include the following provisions: implementation of an investment program for the modernization of coke ovens No.3 and No.4 with the installation of environment friendly technology; securing of expenditures for the improvement of social welfare conditions of workers at the level of no less than 0.5 percent of the mill's total sales per year; ensuring the fulfillment of the previously concluded collective agreement and the conclusion of collective agreements for following periods with the required calculation of standards and provisions of Ukraine's metallurgical industry and the standards and social safeguards of the previous collective agreement; and ensuring the reconstruction of the sulfur removal unit of the coke plant to achieve coke gas purity with content of hydrogen sulfide of 0.5 gr/m3 (2007).