Consultation over mothballing of steel plant starts
LIBERTY Steel has started a consultation process regarding the mothballing of its Merchant Bar (LMB) plant in Scunthorpe which employs more than 120 staff.
The company said the decision comes after a “thorough review of strategic options and the challenging external conditions especially the lack of local feedstock supply that has affected the plant's viability”.
The plant stopped producing steel in 2022 amid problems with energy supply and due to cash problems.
It had been powered by gases from British Steel’s coking ovens on the same site but as those ovens are no longer running that has now stopped, and this has further impacted the plant’s viability, a statement from the company stated yesterday.
The statement added: “Over the past two years, Liberty’s parent company, GFG Alliance, has explored all possible ways to establish a sustainable business for LMB. Despite providing significant financial support and maintaining the plant’s safe, compliant facilities, the commoditised products produced by LMB face stiff competition from imports with lower energy costs and less stringent environmental standards.”
The company stated that the consultation process will begin with union representatives, and approximately 127 employees associated with the plant will be part of the process.
It is not known whether any staff can be redeployed to the firm’s other plants in Stocksbridge, near Sheffield, and Rotherham, both in South Yorkshire.
“Liberty is committed to retaining critical skills and redeploying staff where possible to minimise the impact on employees. The consultation process will last a minimum of 45 days, during which time Liberty will make every effort to achieve a consensus with the workforce,” the statement added.
The firm’s steel chief transformation officer Jeffrey Kabel said: “Over the last two years Liberty has restructured and refocused its UK operations so they can operate viably and we have explored every option to achieve the same at Liberty Merchant Bar.
“A range of external factors have prevented this, including the high energy costs all UK steel producers face, and the loss of third party gas supply to our furnaces.
“As a result, we have opened a consultation on the proposed mothballing of the plant. During the process we will continue to support colleagues, as we have done throughout the past two years, and will make every effort to retain critical skills and redeploy staff where possible.”
Liberty Steel Group, which is part of the GFG Alliance, has a total rolling capacity of 20m tonnes, and employs more than 30,000 people. It is the UK’s third largest steel making firm. LMB at Scunthorpe was the largest manufacturer of merchant bar in the UK. The product is used to make long steel bars which are used in various industries including construction.