Wales

Analysis: Tata Steel - where do we go from here?

Port Talbot steelworks Image copyright Getty Images

What happens now for Tata's steel-making operations in Wales?

This process has to move pretty quickly. The Indian company is looking for another buyer but it's very difficult to see how that's going to work.

Tata is also looking at what's going to happen with the UK Government and its involvement. There's been a lot of talk about part-nationalisation - but that almost flies in the face of what successive governments have done.

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Media captionProf Jonathan Deacon of the University of South Wales said Port Talbot's sister plant Llanwern is still important to the Newport economy

I'm not sure we're going to see one company coming in and buying up all of Tata's operations.

We might be looking at parts appealing to certain companies. Liberty Steel has been talked about, which has opened up in Newport. But steel-making from scratch - which employs a lot of people in Port Talbot - is an expensive process which uses up a lot of energy and it's difficult to see who's going to come in and potentially buy that.

Tata may look towards selling parts of the business. Shotton is very successful - one part of the business not included in this rescue package because it was doing very well - and parts of Llanwern are very successful. You may also see bits of Port Talbot which are very successful being sold off.

But that idea of making steel from scratch as happens at Port Talbot when producing steel in China is so cheap and Russia as well is selling steal cheaply around the globe, it's very difficult for any potential buyers.

Image copyright Getty Images

We've heard about the potential of the UK Government underwriting a management buyout. That would need not just the £100m investment we heard about in the turnaround package but underwriting that £1m loss a day at Port Talbot until that could be turned around.

But if you look at what Tata is saying, it talks about the survival plan being unaffordable, the assumption as being risky and the delivery of it highly uncertain. So it's difficult to see how it's going to progress.

For those 750 workers already being made redundant as a result of the plan - that process is ongoing.

That leaves well over 6,000 Tata workers in Wales. We also have to remember there are a lot of other companies, from engineering firms to cafes and shops which rely on the work around Port Talbot who will be affected.

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