Not yet contacted by UK govt on Teeside plants: Tata

Tata Group today said the British government has not yet contacted it on the possible options to avoid closure of Corus steel plants in Teeside that could result in 1,700 jobs losses.

"We haven't heard anything from the British government so far. There is some political activity in England to keep it (the plant) going. As far as I know, we have not been contacted by the British Government," Tata Sons Director J J Irani said today.

Due to mounting losses, last May Tata Steel Europe announced suspension of some of the facilities belonging to Corus' Teeside Cast Products business in northeast England.

Fearing 1,700 people would be jobless, British Prime Minister Gordon Brown on the New Year even promised to talk to Tata Group Chairman Ratan Tata as a last ditch effort to the closure.

"Everybody hopes that it will not be shut down but it is matter of market dynamics. We cannot continue losing hundreds of millions of pounds to keep the plants going," Irani said.

Tatas plan to mothball the plant by end of this month. "It will be (re-)started at a future date. The plant is not going to be dismantled or sold or anything like that, it will be mothballed," Irani said.

In 2007, Tatas had acquired Corus for 6.2 billion pounds.

The collapse of the Teeside plant, Irani said, was because the four firms, which bought 80 per cent of the products, walked away cutting a 10-year contract short.

"In 2006-07, prices were at peak so as soon as the steel prices fell, these offtakers found difficulties in selling our semis (semi-finished products), so these people walked away from the contract although it was for a 10-year period... We are of course fighting a legal battle with them but the outcome will take some time," Irani said.

The global steel industry has been hit by a collapse in orders from the auto and construction sectors which have suffered during the economic downturn.

Corus has already cut about 6,000 jobs in Britain and the Netherlands since the start of 2009.