Redcar Rescue Hopes Snuffed Out as Blast Furnace Closes

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) - Hopes that there would be some future for the Redcar steelworks in England were extinguished this week when the receiver confirmed that the blast furnace and coke ovens would have to close.

The news will affect the remaining 500 employees, just over a week after owner Sahaviriya Steel Industries (SSI) U.K. Limited, part of SSI PCL (BAK:SSI) (Bangkok), announced the sudden closure of the steel-making plant with the loss of 1,700 jobs. For additional information, see October 5, 2015, article - U.K. Steel Plant to Close with 1,700 Job Losses.

Redcar, located in Teesside, is one of the U.K.'s largest steel-makers, with a capacity of 3.6 million tonnes of steel per year. Iron and steel had been worked at the Redcar location for more than 160 years.

Ken Beasley, the official receiver, explained: "SSI was placed into liquidation with substantial debts and had no funds available to purchase the coal needed to keep the coking ovens operational. I have ensured the continued operation of the ovens whilst I dealt with health and safety issues, and considered whether there were any viable offers for the ovens. There is no realistic prospect of a buyer being found and the priority now is to close the ovens down safely. I cannot continue to draw on taxpayers funds to keep the ovens operational when there is no realistic prospect that a buyer will be found."

Beasley said that the liquidation of the company will continue, and talks are under way with "interested parties" about purchasing the company's other assets. SSI blamed its decision to mothball Redcar on the high costs of production, coupled with plummeting global prices for steel caused by Chinese oversupply.

U.K. Business Minister, Anna Soubry, said: "I had hoped that a commercial buyer for the coke ovens could be found, but unfortunately this has not happened. This news is very, very disappointing and my thoughts are with the workers and their families."

The U.K. government is to host a national steel summit with leading companies and trade unions later this week to address the country's crippled S steel Iindustry.

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