Tuesday, 29 March 2016

The Abbey works: uncertainty continues

The rumoured decision by Tata to sell its remaining UK assets is logical, in that the multi-national already has a rolling-mill in Ijmuiden in the Netherlands inherited from the Hoogovens side of Corus. One assumes that the running costs on the continent are less than in the UK. The company could have made the further coldly logical decision to wind down and ultimately close Port Talbot in order to reduce competitive steel-making capacity. The projected sale does offer a glimmer of hope, but one wonders whether another organisation has the financial capacity to support the works until global demand picks up again. The green shoots, in the form of rising commodity prices, are there but it could be at least another year before the recovery is in full swing.

Optimists will point to the recent deal done by the Scottish government with the Liberty group in transferring ownership of Tata's Scottish resources. However, there is a difference in scale and it could be that Liberty is already stretched financially.

It could all have been so much different if the UK government had cared about industry and shown that it had.

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