Welsh steel mill to reopen after two years out of operation

16 October 2015

A steel mill in south Wales will reopen after more than two years out of operation, on the same day as the government holds a crisis summit on the UK steel industry.

The plant in Newport, reopening on Friday, will initially produce about 50,000 tonnes of steel a month with capacity to double that amount.

Liberty House, an international steel and metals group, bought the 41-year-old site in July 2013.

The company paid the plant’s 150 workers half their salaries as it restructured its finances before reopening, its managing director, Sanjeev Gupta, said.

“Steel mills are almost impossible to revive once they have shut down. Some of these guys had been there for decades and if we had lost them it would have been almost impossible to restart,” Gupta said.

The plant will import slabs of steel from countries such as Russia or Brazil and process them into coil steel to be turned into fencing, crash barriers, lorry chassis and other products.

The launch of Liberty Steel Newport is a rare piece of good news for the UK steel industry, which has blamed cheap imports, the strength of the pound and high energy prices for its current crisis.

The government is holding a summit in Rotherham on Friday to discuss the industry’s future after the closure of the SSI plant in Redcar with the loss of 2,200 jobs. Tata Steel has also cut production at its sites in Newport, Port Talbot and Rotherham with the loss of more than 1,000 jobs.

Trade union Unite called on the government to keep Redcar open so that a buyer could be found and to intervene to support the industry. Tony Burke, the union’s assistant general secretary, who will attend the summit, said: “The Germans do it through an active industrial strategy and the Italians do it by intervening directly in their steel industry, making a mockery of ministers’ claims that EU rules forbid it.”

Gupta said it was a good time for the mill to reopen because prices cannot go much lower, and there is lots of goodwill from suppliers and customers, against the backdrop of a growing UK economy. He said if energy prices for industrial businesses were brought in line with the rest of Europe, his plant could easily employ 1,000 people by expanding its activities into other types of steel.