Slab buyers terminated contract with Corus

Tata Steel's European arm Corus today said four international slab buyers terminated their ten year contract with the company, ending their offtake of products from Teesside Cast Plant (TCP). Corus has begun discussions with representatives of the employees to mitigate the impact of mothballing the plant, said the company in a statement.

Any decision to mothball is likely to lead to a significant number of job loss, said the company in a statement. The company has 1,920 employees.

In 2004, four companies --- Marcegaglia SpA, Dongkuk Steel Mills, Duferco Participations Holding and Alvory SA--- had signed 10 year offtake framework agreement  (OFA) with Corus and committed to buy about 78 per cent of the plant's production.

Lasty week, Italy-based Marcegaglia's founder and chairman Steno Marcegaglia said that the company would back out of its earlier plan to acquire Teesside assets of Corus.

"Over the duration of the contract so far the consortium members have benefited tremendously. Despite this, last month the consortium unilaterally and unreasonably initiated moves to terminate the contract, thereby making the TCP operation unviable," said the company.

Corus plans to take legal action against the buyers to enforce the contract. It will also explore alternative options that might secure a viable future for TCP and its employees.