Corus is to partially mothball its Teesside, UK plant resulting in 1700 job cuts.

The facilities to be shut at its Teesside Cast Products (TCP) business are the Redcar Blast Furnace (the UK’s largest), Lackenby steelmaking and the South Bank Coke Ovens which will all be mothballed at the end of January.

It plans to keep the Redcar Wharf, Redcar Coke Ovens and some of the power generating capacity open and keep 600 staff. The 150-year-old plant employs around 2300 workers and is one of the North-East of England’s biggest employers.

It blamed an international consortium of slab buyers of breaking a 10-year contract signed with Corus in 2004. This contract committed the consortium to buying about 80% of the plant’s production for ten years and made Corus about $800M profit.

The companies were Marcegaglia, Dongkuk Steel Mills, Duferco Participations Holding (through Steel Invest Trading) and Alvory (a subsidiary of Ternium).

Since the consortium broke the agreement, Corus had diverted internal orders to TCP. The company has also been securing external orders on an ad hoc basis in a bid to keep the plant open while an alternative future for the plant was sought. Corus said it had cost it £130M and that operating a 3Mt/y merchant slab plant was not sustainable without a long-term strategic partner.

Community Union general secretary Michael Leahy said: “There is still time to save TCP as a going concern and Tata Corus have a moral and social obligation to Teesside steelworkers who have moved heaven and earth to rescue TCP and save their jobs.”