TATA Steel said that it is continuing efforts alongside European unit Corus to find a solution for the Teesside plant in northern England and remained open for offers from third parties.

A Corus spokesman told Reuters in an e mailed statement that “Corus and TATA Steel are continuing their efforts to find a long term solution for Teesside Cast Products and remain open to credible offers from third parties interested in providing such a solution.”

It said “Reports published today suggesting otherwise are unsourced and incorrect.”

The company was responding to a report in the Economic Times newspaper which said the group was close to calling off its plan to sell the plant because prospective buyers were wary of high raw material costs.

ET reported that TATA Steel is close to aborting its plan to sell the Teesside unit of Corus as high raw material prices of iron ore and coal have made the unit unattractive for prospective buyers.

The report quoted a person with direct knowledge of the development as saying that this difficulty in finding buyers will further sour relations between TATA Steel management and Corus employees.

The person added that “It’s very difficult to get people interested in Teesside now because raw material prices are too high and there is no market for steel yet.”

The Teesside unit had so far seen interest from a mix of steelmakers and venture capitalists, including UK based investor Mr Jon Moulton, though there has been no official confirmation so far. Media reports from the UK suggest that the Middlesbrough mayor Mr Ray Mallon and Middlesbrough football club chairman Steve Gibson had initiated the process to build a consortium to bid for the plant. ET could not confirm whether the consortium is in place.

TATA Steel had mothballed the Teesside plant in January, after a year long recession in the UK compounded problems for the steelmaker which had already been forced to cut down production after a client who had contracted to buy 80% of Corus’ output walked away. Teesside makes intermediate steel products that can only be sold to a company that makes high value steel products.

Corus workers’ union has been strongly critical of the TATA Group’s decision to mothball or temporarily close, the Teesside unit and had been looking at the proposed sale as a way to bail out employees. The closure has affected about 1,600 employees at Teesside.

(Sourced from Reuters and ET)