Liberty Steel has begun a consultation process to mothball its Scunthorpe Liberty Merchant Bar (LMB) plant, with the firm stating that high energy costs had ‘affected the plant’s financial viability’.

According to a report by the BBC, more than 120 jobs are at risk.

The factory produces flat steel sections used in shipbuilding and car making.

A 45-day consultation process has started with union representatives over the 127 employees, according to the Local Democracy Reporting Service (LDRS).

''We will continue to support colleagues, as we have done throughout the past two years, and will make every effort to retain critical skills and redeploy staff where possible."

Jeffrey Kabel, Liberty Steel's chief transformation officer

Liberty Steel's chief transformation officer, Jeffrey Kabel, said: "Over the last two years Liberty has restructured and refocused its UK operations so they can operate viably and we have explored every option to achieve the same at Liberty Merchant Bar. A range of external factors have prevented this, including the high energy costs all UK steel producers face, and the loss of third party gas supply to our furnaces. As a result, we have opened a consultation on the proposed mothballing of the plant. During the process we will continue to support colleagues, as we have done throughout the past two years, and will make every effort to retain critical skills and redeploy staff where possible."

''The consultation ahead must be a meaningful one which provides unions with an opportunity to scrutinise the company's plans in detail.''

Alun Davies, Community's national officer for steel

Alun Davies, Community's national officer for steel, responded to the announcement, stating: "Workers in Scunthorpe have been loyal, and the company has benefitted hugely from their skills and experience. It is clear that this announcement has not emerged in a vacuum, and the company themselves have outlined how Merchant Bar has been forced to compete against imports from overseas producers who operate under more favourable business conditions, particularly when it comes to energy costs. Our priority now is to ensure that there are no compulsory redundancies on site at Merchant Bar in Scunthorpe. The consultation ahead must be a meaningful one which provides unions with an opportunity to scrutinise the company's plans in detail. We will of course do everything we can to support our members at this difficult time."

Source: BBC