1,700 workers will lose their jobs as steelmaker Corus has confirmed it will curtail production at its Teesside Cast Products (TCP) plant.
At the TCP plant, the Redcar Blast Furnace, Lackenby steelmaking and the South Bank Coke Ovens will be shut at the end of January 2010. Corus intends to keep open a number of operations, including the Redcar Wharf, Redcar Coke Ovens and some of the power generating capacity.
A proposal was announced in May for some of the facilities to be mothballed. The breaking of a binding contract which was signed in 2004 by an international consortium of four international slab buyers, led by Italian steel specialists Marcegaglia, has led Corus to partially implement that proposal.
The deal that fell through had committed the consortium to buy just under 78% of the Redcar plant’s production for 10 years.
“This is the last thing we wanted and we feel deeply about what is happening.”
Corus chief executive Kirby Adams
Corus will continue to have a substantial presence in the Teesside area, employing more than 2,000 people at operations in Hartlepool, Skinningrove, the Teesside Beam Mill and Teesside Technology Centre.
“This is the last thing we wanted and we feel deeply about what is happening. Sadly, it has become unavoidable, through no fault of our people on Teesside,” said Corus chief executive Kirby Adams.
The 1,700 jobs that will be lost are around 600 fewer than envisaged earlier this year, said Corus. The decision follows efforts by the company to secure a future for the facilities.
A Corus statement said: “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 £130M. Operating a 3 million tonnes per year merchant slab plant is not sustainable without a long-term strategic partner.”
The facility closures are expected to happen by the end of January.
Corus has made about 1,000 job cuts since January, and announced it was cutting almost 2,000 more jobs at its UK plants in June.