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PRIVACY
Manufacturing

Concerns for Port Talbot steelworks as Tata moves to break up Europen operations

First Minister Mark Drakeford is seeking urgent talks with No 10

(Image: Jonathan Myers)

Indian-owned steel giant Tata said it is no longer prepared to subsidise its loss-making º£½ÇÊÓÆµ business, while confirming it has started the break up of its European operations.

In a trading statement Tata, which employs 7,000 in Wales, including 4,000 at its primary steelmaking business at Port Talbot, said it has commenced the separation of its Dutch steel operations from those in the º£½ÇÊÓÆµ, which currently trade under its Tata Steel Europe business.

The move comes after confirming, while no offer has yet been made, that it is in early stage discussions with Swedish steelmaker SSAB over a possible acquisition for its IJmuiden steel mill in the Netherlands and its down stream businesses, which employ around 9,500.

Economy Minister Ken Skates said the announcement will be "extremely worrying for Tata Steel workers" and said the First Minister is seeking urgent talks with the Prime Minister, to provide financial support to safeguard steelmaking in Wales and the º£½ÇÊÓÆµ.

Tata has been in discussions for months with the º£½ÇÊÓÆµ Government over a financial lifeline of £500m, which could see the taxpayer taking a minority equity stake.

Tata said it is continuing the dialogue with the º£½ÇÊÓÆµ Government on potential measures to "safeguard the long-term future of Tata Steel º£½ÇÊÓÆµ" while also "reviewing all options to make the business self-sustaining without the need for any funding support from Tata Steel India in the future."

However, if funding cannot be secured from the º£½ÇÊÓÆµ Government, and with no longer any financial backing from Mumbai, it could put a question mark over the future of Tata's º£½ÇÊÓÆµ business, which employs around 8,300.

While Chinese steelmaker Jingye has been linked with potential interest, and steel magnate Sanjeev Gupta has said Port Talbot could be of interest, this doesn't mean that if a formal sales process is undertaken by Tata a new owner would emerge.