The closure of Indian steel giant Tata Steel's European subsidiary Corus' Teesside plant in Redcar, Britain will cost the area an estimated £60 million, a study quoted by local press has revealed.
According to a study ordered by Sandra Cartledge, Middlesbrough Council's head of economic development, the loss of trade generated by the plant will cost £25 million to the town's businesses, with between 3,200 and 3,800 jobs expected to be lost in total, of which between 1,300 and 1,800 people made redundant could be Middlesbrough residents.
The report added that a £60 million package will be made available to create jobs for the region's economy which will have hard time following the mothballing.
Commenting, Sandra Cartlidge said, "The overall package will create an estimated 3,000 jobs in the short to medium term and sustain over 10,000 jobs in the long term."
As SteelOrbis previously reported, the decision to mothball the plant, followed efforts by Corus during 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 in question to buying about 80 percent of the plant's production for ten years.
The global financial crisis caused a huge decrease in production at Anglo-Dutch steelmaker Corus, which was bought by Tata Steel in 2007. Tata Group found it difficult to run a 3 million mt capacity steel plant without any customers or without a long-term strategic partner, the company stated at various times