Liberty Steel to Restart Steel Making in Rotherham
According to latest reports in British media, Liberty Steel UK plans to restart steelmaking next week as it continued to seek new funding after its main backer Greensill Capital went into insolvency and is in constructive discussions with the UK government about potential assistance. Liberty stopped production earlier this month over supply issues linked to Greensill's demise but said it expected work to recommence on 6 April. It said restart efforts had been supported by strong orders and customers paying up front. The restart is understood to refer to electric arc furnace steelmaking at Liberty Steel's Speciality Steels site in Rotherham in northern UK, Liberty's sole crude steel production site in the UK. Liberty's Speciality Steels unit had stopped production March 8 and furloughed its employees until the end of March. As per market reports, the operation failed to buy steel scrap for EAF, typically about 40,000 -45,000 tonnes per month. Liberty did not release full details of the restart nor the expected production level at the site.
It is also reported that GFG Alliance Chairman Mr Sanjeev Gupta in a special podcast sent to all GFG Alliance staff moved to reassure his global workforce of 35,000 that every effort was being made to find alternative sources of funding. He would not confirm the extent of GFG’s debts, but said they were substantial. Describing his global steel business as the largest industrial start up, he said that its dependence on Greensill was because it had not been able to access normal, traditional financing. Mr Gupta said GFG has been in the process of diversifying its global funding away from Greensill. He said “The intention was to move our steel business away as well. We now have to complete that journey.”
UK government has already rejected appeals from GFG for a GBP 170 million emergency loan over weekend but is seeking ways to protect 3,000 British workers and the critical steel industry. The UK government refused the loan amid concern over GFG’s opaque corporate structure and whether UK taxpayer money could end up bailing out overseas businesses. GFG Alliance employs about 35,000 people around the world.
Steel worker unions, whose representatives met ministers online on Monday afternoon, have urged the government to take the UK business into public ownership. Unions have called for nationalisation.
GMB National Officer Mr Ross Murdoch said “Now that the Government has stated it will not provide the bailout sought by Sanjeev Gupta, GMB will now seek an urgent meeting with Kwasi Kwarteng, Secretary of State for BEIS to discuss Plan B. This must include all options, including taking the UK business into public ownership.”
Community General Secretary Mr Roy Rickhuss CBE said “We’re in close contact with the company and they continue to pursue every avenue to raise cash and refinance the organisation. Across Liberty Steel UK the local management and trade union representatives are working tirelessly to find a way through this difficult period. These are extremely challenging times, and we hope Mr Gupta will succeed in obtaining the necessary financing with or without government support. However if he is not able to do this then government must step in to protect the jobs and assets. Community is in regular dialogue with the Business Department and we’ve been encouraged by government’s focus on the on going situation. Community will continue to engage constructively with all stakeholders as we work day and night to secure the future of our businesses.”
Unite assistant general secretary for manufacturing Mr Steve Turner said “Steel is a foundation industry and is essential for the recovery of the UK economy as we rebuild from Covid-19. Unite is urging the government to do everything that is necessary in order to preserve Liberty Steel and secure its long-term future. This is key to protecting the jobs of its workforce and the communities where it is based, to safeguard its supply chain and ensure its customers receive the products they require. No option should be ruled out in protecting the long-term future of Liberty Steel and that must include the option of nationalising the business.”
Source - Strategic Research Institute