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Redcar steelworks’ last hopes snuffed out

Redcar steelworks’ last hopes snuffed out

Redcar steelworks’ last hopes snuffed out
October 13
00:05 2015


©Bloomberg

The last hopes of saving the Thai-owned Redcar steelworks in Teesside have been snuffed out with the news that its coke ovens and blast furnace are to close.

The Official Receiver announced on Monday that no viable offers had been received from potential buyers following the liquidation on October 2 of Sahaviriya Steel Industries UK, which owned and operated the site in north-east England.

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Ken Beasley, the official receiver, had ensured the ovens had enough coal to keep working in order to prevent cracking and keep hopes alive. But on Monday he said: “I cannot continue to draw on taxpayers funds to keep the ovens operational when there is no realistic prospect that a buyer will be found.”

Praising the professionalism of the steelworks’ remaining workers “in a time of enormous personal pressure”, he said staff numbers would decline as closure progresses. About 650 had been retained out of 2,200 directly employed when SSI UK went into liquidation.

Sue Jeffrey, leader of Redcar and Cleveland council, described the announcement as the “worst possible news and an absolutely heartbreaking moment for all of us”.

“Our proud history of years of steelmaking has been torn out from under us,” she said.

A national steel summit, involving politicians, companies and trade unions, is due to be held on Friday to address the difficulties facing UK steelmaking.

Gareth Stace, director of lobbying group UK Steel, said the closure of the coke ovens and the Redcar blast furnace — Europe’s second biggest — “reinforces the importance of this week’s summit as it becomes ever more critical to bring forward solutions to ensure the whole steel sector in the UK can be put on a sustainable footing”.

The sector has been hit by a flood of cheap Chinese imports, while British steelmakers have said that the UK’s environmental taxes, high business rates and energy costs have increased their difficulties.

Since buying the site in 2011 from Tata Steel, bringing it out of mothballs and resuming production in 2012, SSI UK has produced steel largely for export to its parent company in Thailand.

But the site’s demise will hit many suppliers
in the north-east, to whom SSI UK owed tens of millions of pounds. It will also increase the jobless rate in the British region with the highest unemployment.

Anna Soubry, the business minister, described the news as “very, very disappointing”.

“I had hoped that a commercial buyer for the coke ovens could be found,” she said.

The government has offered £80m to fund retraining and new economic activity but, as this money is also earmarked for redundancy payments, there is growing concern that it is insufficient. The scale of reclamation work needed at the 1,800 acre site will also be a major cost to the public purse.

The area’s Labour MPs attacked the government’s failure to intervene. “Redcar blast furnace is a strategically important national asset and the government should still, at this stage, respond accordingly,” said Andy McDonald, Middlesbrough’s MP. “If we as a nation don’t produce steel our manufacturing base is completely undermined.”

Roy Rickhuss, leader of steel union Community, urged the government to step in, take the plant into temporary public ownership and preserve “these vital industrial assets” to give Teesside steel the chance of a future.

Additional reporting by Michael Pooler

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