UK govt told must improve efforts to save steel industry

The British government was told on Tuesday the steel industry could collapse unless it made a more concerted effort to deal with the crisis that threatens to engulf the sector.

The managing director of European steelmaker Celsa UK, Luis Sanz, said he had “huge expectations” the government would act quickly, “because otherwise there will be no potential interest in the steel sector in the UK in the future”.

Sanz's remarks came as Business Secretary Sajid Javid scrambled to put together a coherent strategy to save Tata's Port Talbot plant in Wales and another steel maker expressed an interest in the operation.

In an interview with the Guardian, Sanz said the government needed to be more proactive.

“In other European countries they saw these problems coming and acted in advance. In these countries there is a clear industrial strategy that understands that the steel industry is a foundation industry,” he said.

Sanz said the government needed to fight on four fronts: anti-dumping measures; energy costs; business rates and using British steel in major UK procurement projects.

He said Cesla's British division was paying twice as much in electricity costs and 11 times as much in business rates than its operations in France and Spain.

A beleaguered Javid has faced severe criticism over his handling of the Port Talbot issue. He was on a business/leisure trip in Australia when Tata announced it was reviewing the future of Port Talbot and its workers and was forced to return to London.

On Tuesday, Javid was involved in several meetings before he was due to leave in a hurried dash to India for talks with Tata's chairman Cyrus Mistry.

Prime Minister David Cameron, Finance Minister George Osborne and Javid met with Welsh First Minister Carwyn Jones at Downing Street to discuss measures to find the plant a new owner.

Speaking after the meeting Jones said the quartet had discussed pensions, energy costs and tariffs. He added that the government needed to consider a short-term takeover of the plant until a buyer was found.

"Discussions have taken place with buyers - these are early days yet, but we do have something to build on even at this early stage," he said.

"If the UK government needs to take over Tata's assets in the short term to enable a sale process to take place then that's something the UK government should consider.

Liberty interest

Indian entrepreneur, Sanjeev Gupta, who heads Liberty House, said on Monday he would be interested in holding talks with Tata and the government about an investment in the plant.

Liberty operates a steel plant in Newport and is in the process of taking over two Tata plants in Scotland.

Gupta told the BBC he believed jobs at Port Talbot could be saved if at least 700 workers in its blast furnaces were retrained.

"We would look to transition from blast furnaces to arc furnaces, from imported raw material to domestically available scrap, from making carbon steel to making what we call green steel - melting and recycling scrap using renewable energy."

He said he wanted to retrain the workforce and avoid redundancies, but warned that building arc furnaces to replace blast furnaces would take a year to 18 months.

"We've never undertaken anything which requires redundancies - I won't undertake something which will require mass redundancies," he said.