UK Business minister Sajid Javid to meet Tata Steel chairman Cyrus Mistry

Tata Steel announced last week it was selling its loss-making UK businesses and would close its plant at Port Talbot unless a buyer is found.

PTI| Updated: Apr 05, 2016, 19:07 PM IST
UK Business minister Sajid Javid to meet Tata Steel chairman Cyrus Mistry

London: UK business minister Sajid Javid is rushing to Mumbai to hold crunch talks with Tata Group chairman Cyrus Mistry in an effort to save the British steel industry after the Indian steel giant decided to sell its loss making plants in the country.

But before he leaves today for the hurriedly planned India trip, Javid is also set to hold crucial talks with Indian-origin businessman Sanjeev Gupta, who has expressed an interest in acquiring Tata Steel's embattled Port Talbot plant in South Wales.

"Many of them are loss making at the moment but we believe they can be turned around," Gupta, founder & CEO of commodities firm Liberty House, told the BBC.

His firm is conducting due diligence of the Tata Steel operations and have held talks with the Tata Group over the prospect of acquiring the unit and saving thousands of jobs.

"If we get involved in Port Talbot we will only do so on the basis that we are confident there will not be any mass redundancies," he said.

"We have an alternative suggestion which is to still make hot metal but to make it from local raw material rather than imported raw material, so it's a change of technology rather than ending liquid steel making," he added.

Gupta indicated Tata Steel?s pension fund, with 130,000 members and liabilities of almost 15 billion pounds, could prove a barrier to rescue.

Meanwhile, British Prime Minister David Cameron has become personally involved in trying to work out a solution to the crisis triggered as a result of a combination of cheap imports from China, falling global demand, high energy prices and a tougher tax regime than many rival nations.

According to the 'Financial Times', Downing Street has indicated that under state aid rules, the UK could provide financial support for the steelmaking sites, which could include reducing pensions and energy costs.

But the government remains opposed to imposing higher tariffs on Chinese steel imports.

Cameron held a meeting with Welsh first minister Carwyn Jones to discuss how to attract potential buyers for sites such as Port Talbot. He said the UK was "doing everything it can to find a long-term, viable solution to save the Port Talbot steelworks".

Tata Steel Europe had announced its plans to sell its UK steel business last week after a "strategic review" by its board, throwing the industry into chaos.

UK steel unions have called for state support as members of the Community, GMB and Unite trade unions held talks in London on Monday.

They urged the government to back a plan that involves 1.5 billion pounds being invested into Tata?s operations over 10 years, with the government providing support for two to three years until the business is self-sufficient.