Tata Steel to shut UK operations employing 400 staff

The Tata Steel plant in Scunthorpe, north east England. (AFP/Lindsey Parnaby)

Tata, Britain's biggest steel operator, said it will close its Orb Electrical Steels in Newport, South Wales, that employs 380 staff.

It added in a statement that it had been unable to find a buyer for UK-based Wolverhampton Engineering Steels Service Centre, potentially costing a further 26 jobs.

However, it has agreed to sell Canada-based Cogent Power Inc (CPI) to Japanese group JFE Shoji Trade Corporation, protecting 300 positions.

In addition, Tata will keep Swedish operation Surahammars Bruks AB that employs around 100 people.

"We have been able to secure the future for almost 400 colleagues in CPI and Surahammars Bruks," said Henrik Adam, CEO of Tata Steel's European operations.

"However, today's proposal will be sad news for colleagues at Orb in South Wales. This is necessary, enabling us to focus our resources, including investment, on our core business and markets, helping us build a long-term sustainable future in Europe."

Tata is a major employer in Wales, with its Port Talbot plant employing more than 4,000 staff. However there is uncertainty also over Port Talbot's future after the Indian group and German industrial conglomerate Thyssenkrupp scrapped merger plans in May.

The pair acted after the EU made clear that it would not allow the merger on competition grounds.

The aim of the merger had been to create the second-largest European steel company behind multinational ArcelorMittal and to join forces in the face of the surge of Chinese steel.

Following the collapse, Thyssenkrupp announced plans to slash 6,000 jobs, mainly in Germany.

Tata's latest announcement meanwhile comes a couple of weeks after the Turkish military pension fund OYAK signed a provisional deal to buy British Steel after the UK steelmaker was forced into liquidation in May.

Tata's Adam added Monday: "Continuing to fund substantial losses at Orb Electrical Steels is not sustainable at a time when the European steel industry is facing considerable challenges.

"We saw no prospects of returning the Orb business to profitability in the coming years."