Tata Steel to mothball hot strip mill at Llanwern, Newport

Part of Llanwern steelworks in south Wales is to be temporarily mothballed, with the loss of 115 jobs.

Tata Steel blamed the decision affecting the plant's hot strip mill on "continuing poor UK steel demand".

The Welsh government said it was "hugely disappointing news" that would be a blow to the local economy and community.

Tata employs about 7,500 staff in Wales, with about 1,400 at Llanwern in Newport.

The Indian-owned company said the plant was expected to remain mothballed until the UK economy and steel demand justified a restart.

In the meantime the market would be supplied with material from Tata Steel's other hot strip mill in south Wales at Port Talbot, where costs are lower, the firm said.

The Llanwern cold rolling mill and Zodiac galvanising line would continue in operation.

The jobs to go consist of roles carried out by fixed-term contract employees, agency workers and contractors, said the company.

Jon Ferriman, strip products hub director for the company at Port Talbot and Llanwern said the decision had been made with great regret.

"I would like to pay tribute to those valuable people who have helped us make the flexible working model a success at Llanwern," he said.

"Clearly this is a very difficult time for them.

'Rollercoaster'

"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."

Mr Ferriman said the decision was not connected to the effects on primary steelmaking of UK or EU environmental legislation.

Keith Hazlewood, GMB national secretary, said the announcement "yet again demonstrates what a rollercoaster industry the steel industry is".

He added: "This decision is a devastating blow for the UK steel industry, the economy and the local community of Newport, south Wales and the supply chain in the surrounding area, especially at this time of the year."

Last month, the company announced it was cutting 70 jobs by closing its construction products business at the same site.

Mr Hazlewood said the GMB along with the other steel unions would work with the company "to mitigate any compulsory job losses."

'Economic circumstances'

Welsh Secretary Cheryl Gillan said she understood the disappointment being felt in Newport as a result of Tata's decision.

But she added: "I am aware this is not the first time the company has taken this decision and I remain optimistic that the rolling mill will be brought back on line when economic circumstances allow.

"Given the difficult economic climate faced by all businesses in Wales it is important both they and government - whether in London or Cardiff - remain sufficiently flexible to adapt quickly to changing circumstances."

Mrs Gillan said that while the UK government was putting in place measures to support business, the Welsh government also had a key role to play in helping the local economy and create jobs.

"Today's news underlines the continued importance of our two governments working together, rather than in isolation, in the interests of the Welsh economy," she said.

John Griffiths, Labour AM for Newport East, commented: "This is yet another hard blow for workers at Llanwern, after the 70 job losses announced in November."

'Hugely disappointing'

The Welsh government said the decision was "hugely disappointing news that will be a blow to both the local economy and community".

"We will work with Tata to see what help we can provide to workers affected by this decision," said a spokesman.

The spokesman said the first minister had written to the prime minister to highlight the challenges facing the steel industry, and to ensure that Wales' energy intensive industries were not disadvantaged by increasing energy prices and additional environmental burdens.

"While the chancellor did announce some measures this week to alleviate some of our concerns, these will not provide any relief until at least 2013," said the spokesman.

"We need urgent action now if we are to support our economy and provide the growth we need."

Newport City council's cabinet member for economic development Ed Townsend said they wanted an urgent meeting with management.

"In all our recent discussions with the company they have been confident Llanwern would retain a central role in the steel industry in south Wales," he said.