Companies interested in saving Corus steel plant, says Gordon Brown

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The Independent Online

Buyers are interested in saving a steel plant which will be mothballed this week with the loss of 1,600 jobs, the Prime Minister said today.

Gordon Brown said "a number of companies" were in talks about the Corus Teesside Cast Products site in Redcar.

During a phone-in on Real Radio ahead of a Cabinet meeting in Durham, he said he had spoken to the owners of the Indian parent company, Tata, and Corus chief Kirby Adams.

"We are still trying to find new owners for the site," he said.

Asked whether he had heard venture capitalist Jon Moulton was interested, Mr Brown replied: "I am aware that there are a number of companies talking to us and Corus, not just Mr Moulton, of whose bid I am not aware.

"A lot of work is being done behind the scenes.

"Mothballing will unfortunately have to go ahead."

Mr Brown said Business Secretary Lord Mandelson will visit the plant later.

Earlier, the mayor of Middlesbrough Ray Mallon and football club chairman Steve Gibson issued a joint statement calling for a "credible" consortium to be given more assistance in putting a bid together.

Corus announced it will mothball the plant at the end of the week.

It blamed an international consortium which pulled out of a 10-year contract to buy most of its output.

Despite the Prime Minister's comments, Corus issued a statement confirming it will start to partially mothball the steelworks tomorrow.

"This is the direct result of the decision in April 2009 by a consortium of four customers responsible for almost 80 per cent of the plant's business to renege on a binding 10-year contract.

"Since then, Corus has worked tirelessly to find an alternative long-term solution for Teesside Cast Products (TCP).

"By keeping the plant open, much of the time solely on internal orders, Corus lost approximately £150 million. The company therefore had no choice, in the absence of a strategic partner, but to announce the partial mothballing of TCP in December.

"The timing of the start of this process is determined by the availability of stocks of iron ore on the ground in Teesside. These have now run out.

"There has been speculation about potential last-minute bidders for the plant. Corus's position remains unchanged. This is a mothballing, not a permanent closure. TCP will be kept ready for a restart. Corus remains open to credible offers for TCP.

"Corus shares the concern of trade unions and Government about the implications of the mothballing for its employees and the Teesside area. The company has done everything in its power to avoid this outcome ever since the consortium first asked for TCP to be mothballed in November 2008.

"TCP has been at the top of the company's agenda throughout this period and Corus has at all times kept the highest levels of Government fully informed about TCP's situation.

"It is now time for the trade unions and Government to turn their attention to rebuilding the British economy, to reviving activity in the construction industry and to ensuring that there is a viable and sustainable future for manufacturing in the UK," said the company.

Unite's national officer for the steel industry Terry Pye said today that the mothballing of the plant was a "disgraceful charade".

He said: "The union has reason to suspect that Corus never had any intention of selling this plant and they now intend to close the site, which will have a devastating affect on the local community, which has a rich 150-year heritage of iron and steelmaking,

"Corus is trying to give the impression that it wants to mothball the Teesside site with a view to sell it once they have interested buyers.

"However, Unite think this is a smokescreen. We are aware that serious offers have been made to Corus that would allow production to remain at the plant, but the management has dismissed them all out of hand.

"We will be meeting other trade unions next week to discuss what action to take and will be calling on our members at the other Corus sites to take strategic action to force the company to take heed to the offers it is receiving to save the plant and the thousands of skilled jobs in an area already decimated by lob losses."

Community, which represents steelworkers, said the North East was now looking for help from Business Secretary Lord Mandelson, who was due to visit the plant today.

General secretary Michael Leahy said: "I've met with the Government several times and I know that they are ready to act, but Tata Corus need to show a clear commitment to the workforce and to the local community.

"The Government needs to know that any support is an investment in building a bridge to the future and not a bridge to nowhere.

"Tata Corus have a moral and social responsibility to the workforce and to Teesside, however by continually stonewalling potential buyers, Tata Corus are signing the death warrant for a more than 100-year tradition of steel making on Teesside.

"Lord Mandelson's visit to Teesside comes in the wake of the union's national executive endorsing plans to allow Tata Corus members to ballot for industrial action in support of Teesside.

"This action would exclude the at-risk workforce on Teesside but may include the Teesside Coke Ovens and Beam Mill and Tata Corus sites across the country depending on the will of the members."