Clydebridge and Dalzell plants were due to be closed by Indian company but in deal brokered by Edinburgh government they will remain open

This article is more than 4 years old

This article is more than 4 years old

Two Lanarkshire steel mills have been saved from closure after metals group Liberty House bought them from Tata Steel, in a deal brokered by the Scottish government.

The Clydebridge and Dalzell plants were due to be mothballed after Tata announced plans to hack back its UK business, at the cost of 1,200 jobs.

They were granted a reprieve via an unusual back-to-back deal, under which the Scottish government will buy the plants from Tata before selling them on to Liberty House.

The deal is understood to have been structured to avoid the lengthy due diligence process required for a transaction between two companies. The fee for the plants is understood to be “nominal” – potentially as little as £1 – because Liberty House will take on their environmental costs and invest in them.

Liberty House is not expected to employ all 270 of the plants’ staff immediately but plans to increase the workforce back to former levels over time.

Sanjeev Gupta, Liberty House’s executive chairman, has vowed to build a profitable steel business in the UK, despite the woes affecting the sector. He said the two Lanarkshire steel mills would help Liberty House reach that goal. “This agreement saves two great facilities in Scotland,” he added.

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“Now we must turn our attention to restoring these businesses to their former glory, steadily rebuilding their skilled workforces and customer base.



“Clydebridge and Dalzell will fit well into our vision for an integrated, flexible and sustainable steel sector, from recycled local scrap using renewable energy making green steel, to value-added downstream and engineered products.”

Gupta has said he plans to increase his UK workforce from 1,500 to as much as 5,000, if the government puts in place the right conditions to allow investment in steelworks. He wants to buy old plants that once made steel from raw materials and convert them to recycle scrap steel into products for use by engineering businesses.

Gupta has already bought an advanced engineering firm from collapsed steel firm Caparo and is eyeing more such acquisitions to feed recycled steel. He has said this could replace the traditional industry of making steel from raw materials, a business hit hard in the UK due to the strong pound, high energy costs and Chinese firms dumping cheap steel on the European market.

Bimlendra Jha, executive chairman of Tata Steel’s Long Products Europe business, said: “We welcome this deal which opens the possibility of a resumption of steel processing in Scotland.”

Tata said it remains in talks to sell the remainder of its UK long products division, which previously included the two mills, to investment group Greybull Capital.

Scotland’s business minister, Fergus Ewing, said: “When Tata Steel mothballed the Dalzell and Clydebridge plants, I said we would leave no stone unturned in the quest to find an alternative buyer.

“That is why we established a Scottish steel taskforce and why I am delighted that our support for the steel industry has paid off.”