Options considered for Port Talbot plant

March 30, 2016 8:17 am Published by

Tata Steel: Government considers Port Talbot options

  • 30 March 2016
  • From the section Business

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The BBC understands the government is considering options for Tata Steel’s Port Talbot plant, including a possible management and workforce buyout.

Sources say the unions and bosses have already come up with with a turnaround plan for the plant.

The site is part of Tata Steel’s UK steel business.

India’s Tata Steel plans to sell its loss-making UK business, putting the jobs of thousands of workers at risk.

Tata’s European holding company has been told to “explore all options for restructuring”, including the partial or entire sale of its UK operations.


Tata’s UK steel business, which employs thousands of workers, is thought to be losing £1m a day.

Government sources have said those involved in the plant should be given the chance to see if they can secure the funding to keep it going.

“It is the role of the government to intervene when a vital economic interest is at stake,” a source told BBC assistant political editor Norman Smith.

It is understood there have been extensive talks between the government and ministers, who are concerned Tata could seek to close the plant within weeks if a buyer is not found.

It is also understood the government is looking at offering loan guarantees to potential buyers and much tighter rules on procurement to ensure major British projects are obliged to buy British Steel.

Labour leader Jeremy Corbyn had called for ministers to act to protect the steel industry and “the core of manufacturing in Britain”.


The UK and Welsh governments earlier issued a joint statement saying they were “committed to working with Tata and the unions on a long-term sustainable future for British steel-making.

“Both the UK and Welsh governments are working tirelessly to look at all viable options to keep a strong British steel industry at the heart of our manufacturing base.”

Meanwhile, Plaid Cymru leader Leanne Wood said that her party wanted the Welsh Assembly to be recalled to discuss the crisis – a call that was echoed by Welsh Conservatives leader Andrew Davies.

Tata’s restructuring decision, which was announced after a board meeting in Mumbai on Tuesday, also affects workers at its other UK plants including Rotherham, Corby and Shotton.


Tata said trading conditions had “rapidly deteriorated” in the UK and Europe due to a global oversupply of steel, cheap steel imports, high costs and currency volatility.

“These factors are likely to continue into the future and have significantly impacted the long-term competitive position of the UK operation,” it said.

That means finding a commercial buyer for the whole business may not be easy.

Colin Hamilton, commodities expert at Macquarie Group, told the BBC: “Steel demand is still falling. It peaked in 2013. It is very hard to see who would buy the ‘hot end’ of the business, the steel making end itself, although the rolling mills are more attractive, I think its is unlikely we will see a buyer for the business as a whole.”

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