Firm mothballs mill and sheds jobs as steel demand drops

Tata Steel yesterday said the temporary mothballing of the mill at its Llanwern site in Newport, South Wales will take immediate effect.

However 1,500 other jobs at the site will not be affected.

The move will hit 115 agency workers, contractors and others on fixed-term contract jobs. Tata Steel said the mill would probably remain mothballed until the UK economy and steel demand justify its reopening.

A Tata spokesman said: “It is with great regret that we have had to make this decision. I would like to pay tribute to those valuable people who have helped us make the flexible working model a success at Llanwern. Clearly, this is a very difficult time for them.

“The Llanwern Hot Rolling Mill is an important operation for us, and our intention is to bring it back into operation as soon as market conditions permit.”

Tata said the mothballing was a result of “continuing poor UK steel demand” amid a deteriorating European economic outlook, and was not connected to the effects on primary steelmaking of UK or EU environmental legislation.

During the 2009 financial crisis, the mill was mothballed for nine months, also as a result of poor market conditions, so the firm developed more flexible working.

The spokesman added: “We remain committed to sustainable steelmaking in Wales. Our major capital expenditure project to rebuild Port Talbot’s blast furnace number four is now under way and we are working on a raft of investment initiatives to further improve our competitiveness for the future. At the same time we are placing a strong emphasis on cost-saving measures as we weather the current economic downturn.”