Tata Steel says it is reviewing the sale of its biggest UK assets and could place its European operations into a partnership instead.

The move was announced following a board meeting in Mumbai on Friday amid months of speculation over progress in the UK sale process.

The company said it still intended to sell its speciality steel business employing 2,000 workers in Hartlepool, Rotherham and Stocksbridge in South Yorkshire.

But it was considering keeping its larger strip steel operation, employing about 9,000 further workers including more than 3,000 at Port Talbot, adding it had entered discussions with Thyssenkrupp and others on the possibility of a joint venture.

Pension liabilities and the UK's vote to leave the EU were all factors involved in complicating the sale process.


Tata rejected any suggestion that its decision meant the sale plan had been scrapped.

But Tata Steel's executive director for Europe, Koushik Chatterjee, said a partnership offered the "best prospects" of creating a "premium, world-class strip steel business with the scale and scope of capabilities to compete successfully on the global stage".

He added: "It is too early to give any assurances about the success of these talks. Such success, especially the inclusion of the UK business in the potential joint venture, would depend on several issues including finding a suitable outcome for the British Steel Pension Scheme, successful discussions with the UK trade unions and the delivery of policy initiatives and other support from the governments of the UK and Wales.

Roy Rickhuss, general secretary of the steelworkers' union, Community, said: "This new approach means that uncertainty will continue for thousands of steelworkers and their families.

"It seems Tata believe this is in the best interests of sustaining steelmaking in Port Talbot and its downstream operations but the test will come in the next steps that Tata takes."

He added: "Tata must also recognise the level of frustration, even anger, among the workforce over these delays and uncertainty. It is vital that they work with Community to reassure and protect the greatest asset to the business - its people."

The industry has been buckling under pressure from cheap Chinese imports and high energy costs - in a crisis which has seen thousands of British jobs lost over the past year.

Ministers had unveiled measures to try to save the business, including the possibility of taking a stake of up to 25% in the new owner, providing hundreds of millions of pounds of loans, and proposals to restructure the old British Steel pension scheme.

There has also been some relief in the pressure on the industry with the price of steel increasing.