Tata Steel is close to a deal to save its Port Talbot plant despite Britain’s vote to leave the EU, as sterling’s slump potentially boosts the industry’s survival prospects.
MPs and trade unions have said the steel industry faces a new crisis after the referendum result, with bidders for Tata Steel UK ready to pull out of the process, according to reports.
Sources familiar with Tata Steel’s thinking, however, say the company is still working on a deal with the government to keep its UK business, and that the slump in sterling’s value could help the industry.
More than 11,000 jobs are at risk after Tata Steel announced in March that it was considering pulling out of its UK business, which includes the Port Talbot steelworks in south Wales.
The company began a sales process for the business, and seven potential bidders were shortlisted, but it has decided to work on a deal to keep its UK concern after the government pledged to offer hundreds of millions of pounds of support and restructure the company’s pension scheme.
A senior source close to the Indian company said it was still likely to keep the business, which would be a boost to the beleaguered Conservative government, whose efforts to help Port Talbot have been criticised. The source said: “Unless something drastic happens, then early next week they will make a statement.”
The company believes the impact of Britain voting to leave the EU, which threatens to spark years of uncertainty for businesses, could be softened by the weakening of sterling.
The pound fell to its lowest levels in 30 years against the dollar on Friday, which means it will be more expensive for China to export steel to Britain. Cheap imports from China have been one of the factors behind the crisis facing the steel industry.
Source: theguardian