| From STEEL GRIPS online business news Corus mothballs Teesside, UK, steel plant Feb 17, 2010
The mothballing of the TCP blast furnace at Redcar, where about 1,600 jobs are due to be lost, will begin on Feb 19 2010, marking the demise of 150 years of steelmaking at Teesside. TCP has been at risk since international buyers pulled out of a 10-years contract. These included Marcegaglia SpA, Dongkuk Steel Mill Co, Alvory SA and Duferco Participations Holding Ltd. These companies agreed in 2004 to buy 78% of the production of TCP under a 10-year slab offtake agreement. Corus has appealed in the court against the four companies for backing out of the TCP contract. Shut-down phase started at the end of January 2010, but following a meeting with union leaders, the firm agreed to extend operations to the end of February. In the meantime, talks have been going on to secure a positive future for TCP, as unions said the site was still viable and they would not give up hope that a buyer for the plant could be found. Anyway, the firm has now confirmed that the manufacture of steel slabs will come to an end within days. "Operating a three million tonnes per year merchant slab plant is not sustainable without a long-term strategic partner," Corus had said in December. Since the consortium broke this legally-binding agreement, from which it made an estimated $800m profit, Corus has been diverting internal orders to TCP. The company has also been securing external orders on an ad hoc basis in a bid to keep the plant open while an alternative future for the plant was sought. This has cost the company about £130 million. The knock-on effect for the area has been described as "horrendous", with Redcar and Cleveland Council estimating that up to 8,000 more jobs could be lost at nearby companies. Experts say as demand in Europe is yet to pick up, Corus' Teesside casting plant leaves no choice for the Tatas but to mothball it. Mothballing suggests the plant is not running at an economically viable condition. © Copyright 2007 by GRIPS media |
