By Silvia Antonioli
LONDON, Feb 17 (Reuters) - Miners Kazakhmys and ENRC and steelmaker ArcelorMittal Temirtau are to raise salaries for staff in Kazakhstan by 10 percent after a devaluation of the local currency threatened their living standards.
The companies announced the pay increases on Monday after President Nursultan Nazarbayev, who has kept a firm grip on the resource-rich nation for more than two decades, said the country’s largest exporters should raise salaries to protect workers from the impact of the devaluation.
Kazakhstan said last week it would let the tenge currency devalue by about 20 percent to prevent large-scale speculation on the foreign exchange market after a slide in other emerging market currencies.
London-listed Kazakhmys operates mainly in Kazakhstan, ENRC has assets there and ArcelorMittal Temirtau is the Kazakh branch of the world’s largest steelmaker.
The companies, which have most of their local costs in tenge and sell their products mostly in dollars or dollar equivalents, will benefit from the devaluation because those costs will fall.
Shares in Kazakhyms, the most exposed to Kazakhstan among the three, rose by about 30 percent last week on the back of the devaluation.
The salary increase at all three firms will be effective from April 1.
It will apply to about two thirds of Kazakhmys’s 58,000 employees and about 65,000 Kazakhstan-based employees at ENRC. ArcelorMittal Temirtau has about 14,000 workers.
Analysts at Nomura said the pay increases only partially offset the positive effect of the devaluation on the companies’ earnings.
“In our view, it still locks in a significant benefit from the devaluation,” they said in a note to clients.
Kazakhmys’ shares in London were 1.6 percent higher by 1659 GMT on Monday, slightly underperforming a broader mining sector increase of 1.5 percent.
ArcelorMittal shares were flat on the day. ENRC’s three founders and the Kazakh government took the company private last year in a $4.5 billion buyout.