Sale talks with Liberty throw potential lifeline to 500 Outokumpu steelworkers in Sheffield

Liberty Steel could buy Outokumpu in Sheffield rescuing 500 jobs - but only if it can buy British Steel too, The Star has learned.

Monday, 10th February 2020, 12:30 pm

Liberty believes the two companies - and its Speciality Steels operations in Stocksbridge and Rotherham - would create a ‘wider Yorkshire eco-system’ that could thrive as global demand for steel rises.

An insider said: “Connecting Outokumpu with Rotherham, Stocksbridge and Scunthorpe would give us critical mass, economies of scale and shared expertise.”

There was ‘some overlap’ between all three businesses, he added.

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Liberty employs more than 900 in Stocksbridge.

Finnish-owned Outokumpu yesterday announced a review of its Long Products business, which employs about 500 in Sheffield. The division also has sites in Sweden and the US.

The Star understands it has hired investment bankers to look at a possible sale.

But Liberty bosses have a caveat - they want British Steel in Scunthorpe too.

Chinese company Jingye agreed in November to buy the collapsed business for £50m and save about 4,000 jobs.

Outokumpu, Shepcote Lane.

But the French government could block the sale of its operations in France, which are seen as a strategic national asset.

British Steel is controlled by the UK Insolvency Service, which is responsible for selling the assets.

Liberty bosses believe their proposal offers a way to save hundreds of jobs in Scunthorpe and Sheffield - and avoid a huge backlash at the government’s lack of support for the sector.

Liberty last month announced it was itself consulting on 350 jobs losses, 283 in South Yorkshire.

Outokumpu, Shepcote Lane

But insiders say that is about improving efficiency - achieving the same output with fewer people - and not a lack of demand, which has risen in the UK over the last six years and is set to double globally over the next 30.