Redcar steelworks 'stands on the brink' with vital supplies left marooned on the North Sea

Exclusive: Ships anchored just a few miles away are unable to land their cargo with the firm's owner unable to pay

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The Independent Online

The Redcar steelworks stands on the brink of disaster today while three foreign ships laden with thousands of tons of vital supplies lie anchored just a few miles away in the North Sea.

The Independent has learned that a Hong Kong-registered ship, the Tiger Shandong, has been waiting since 3 September to enter the port of Teesside carrying around 164,000 tonnes of Australian coal for the ailing plant.

Two other ships, the Japanese-owned Lowlands Serenity and the Greek-owned Cape Natalie, also lie anchored within sight of the town carrying a total of 323,000 tons of iron ore for the plant’s blast furnace, where production was paused last Friday.

But the ships are unable to land their cargo and resupply the plant, where 3,000 workers and contractors risk losing their jobs, as the steel firm’s Thai owner, SSI, is believed to be unable to pay the Dutch trading company supplying the fuel.

The news highlights how the town of Redcar, which once used coal from collieries in nearby Durham, has been left at the mercy of global forces and foreign imports.

Workers fear they will run out of coal this weekend and will have to switch off the plant’s coke ovens – a move that will cause “catastrophic damage” and will, in effect,  cause the plant’s closure.

It is believed there are now less than 8,000 tons of coal left on site to keep the ovens burning. The Tiger Shandong’s cargo could keep the fires lit for nearly two months, allowing extra time for any rescue bid.

Unions representing the workers have been calling on the Government to intervene, but Whitehall says strict state aid rules prohibit a rescue. George Osborne has spent this week 5,000 miles away on a charm offensive to win trade deals in China.

Roy Rickuss, general secretary of Community, the steelworkers’ union, said after he was told by The Independent about the cargo ships: “This news will be particularly disappointing for workers at SSI. We know that running out of raw materials could spell the end for the site.

“If SSI aren’t able to get support from the Government to get those materials off the ships and into the steelworks, then it may not survive the weekend.”

The Independent has learned that the Lowlands Serenity has been anchored off Teesside since 1 September carrying 163,000 tons of iron ore from Brazil, while the Cape Natalie has been at anchor since 4 September carrying 160,000 tons of iron ore from South Africa.

It is believed to be costing tens of thousands of pounds in “demurrage” fees for the three cargo ships to wait offshore.

Britain’s steel industry is at crisis point after the price of slab steel almost halved over the past year and Chinese companies dumped steel on the market . Currency fluctuations have added further pressures. The Department for Business, Innovation and Skills says it is “fully aware” of the challenges facing the industry.

Redcar’s MP, Anna Turley, fighting to keep the steelworks open, said: “Redcar is being buffeted by global forces and is not getting the support it needs. The catastrophic decline in steel prices combined with the dumping of steel by China has left the industry and its most vulnerable plant in Redcar teetering on the brink.”

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