Wales

Tata's Port Talbot plant 'to keep on running' as merger falters

Port Talbot steelworks building with the words written The Pride of Welsh Steel Making on it Image copyright Getty Images
Image caption Port Talbot employs 4,000 workers - nearly half of Tata's UK workforce

Tata has committed to keeping the giant Port Talbot steel plant open after signalling its planned joint venture with German rival Thyssenkrupp was off.

It was "increasingly clear" that the European Commission would not give clearance for the tie-up, said Tata.

Tata Steel chiefs admitted rising energy costs had not helped business but "obviously the plant will keep running".

Port Talbot employs just under half of Tata's 8,385 workforce in the UK.

Tata's UK plants were put up for sale in March 2016, leading to months of uncertainty.

The move was, however, put on hold and a 10-year £1bn investment plan was announced for the UK's biggest steelworks at Port Talbot - if market conditions allowed - along with a commitment to try and avoid compulsory job losses.

Tata explored merger options with Thyssenkrupp over the next two years and a deal was finally agreed last summer.

But competition concerns emerged over creating what would be Europe's second biggest steelmaker.

It has also led to concerns that the Trostre plant in Llanelli might be off-loaded as part of arrangements to get the merger through.

Image caption Tata's workforce in England and Wales stood at 8,385 in January - more than three quarters at its Welsh plants

The European Commission, which opened its investigation last October, was expected to make a decision by 17 June.

Asked specifically about the plant, which employs 4,000 workers, chief executive T V Narendran said: "We need to make sure we run it well. We didn't have a great year last year in the UK.

"We want to make sure this year we run it well and we run it in a manner that is cash positive.

"We are a bit concerned about energy costs in the UK. In the last 18 months it's gone up quite significantly and that's not helping us."

The Welsh Government said it would help Tata "in any way" to safeguard jobs, 15,000 of which are in Port Talbot's supply chain.

Economy Minister Ken Skates said he had been touch with Tata's European boss to seek long-term assurances.

Mr Narendran said Tata had plans to keep the UK operation running "as long as they are performing well".

"I think the team there is working hard to make it that way," he added.

Image copyright Getty Images
Image caption Tata Steel runs the UK's largest steel works in Port Talbot

Executive director Koushik Chatterjee added: "One of the fundamental strategies of going ahead in the deal was to create a more sustainable business. Obviously we will go back to the drawing board and look at more options."

Unions meanwhile warned it meant another period of uncertainty for steelworkers and said it was "time for calm heads and a clear focus" on the future of Tata in Europe.

Roy Rickhuss, general secretary of the Community union said: "This is obviously a major development that raises as many questions as answers.

"It's important that there are no kneejerk reactions by Tata Steel in response to this development."

Unison's national officer for steel Tony Brady said the union would be pressing Tata's board for details of its plans.

"Tata Steel's workforce has been on a rollercoaster of uncertainty for several years," he said.

Image copyright tirc83/Getty Images

"When we meet the Tata board we will be telling it that it is a ride that has to end and demanding assurances over jobs and investment.

"Tata Steel's workforce has made great sacrifices to secure a future for the steelmaker. It would be a betrayal if their livelihoods were now put at risk because of this doomed joint venture."

Plaid Cymru AM for South Wales West, Bethan Sayed, called for the first minister to organise a steel summit to draw up a long-term plan to safeguard the future of the industry.

"The developments today have underlined the need now for this alternative strategy to be developed as a matter of urgency," she said.

Analysis - Brian Meechan, BBC Wales business correspondent

Tata had given unions a lot of commitments ahead of the intended merger but it has to be said, this joint venture with Thyssenkrupp was regarded as essential for the future of its UK business.

So this means more uncertainty for workers at Port Talbot, who have already undergone a difficult period over the past three or four years.

They will want to hear if there is a plan B - as there was none put forward before. Tata had put up all of its UK operations up for sale in 2016 and sold most of its operations in Scotland and the north of England, while holding onto its Welsh bases.

More on this story