The steel company Corus claims that the breaking of a non-binding contract has forced the company to mothball some of its facilities belonging to its Teesside Cast Products in the U.K.
TCP’s Redcar Blast Furnace, Lackenby steelmaking and the South Bank Coke Ovens will be mothballed at the end of January 2010. Corus intends to keep open a number of operations, including the Redcar Wharf, Redcar Coke Ovens and some of the power generating capacity.
Corus will continue to have a substantial presence in the Teesside area, employing more than 2,000 people at operations in Hartlepool, Skinningrove, the Teesside Beam Mill and Teesside Technology Centre.
The decision to partially mothball TCP follows efforts by Corus over the past eight months to secure a long-term future for the plant after the failure of four international slab buyers to fulfill their obligations under a 10-year contract that they signed with Corus in 2004. This contract committed the consortium to buying about 80 percent of the plant’s production for ten years.
Since the consortium broke this legally-binding agreement, from which it made an estimated $800m profit, Corus has been diverting internal orders to TCP. The company has also been securing external orders on an ad hoc basis in a bid to keep the plant open while an alternative future for the plant was sought.