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Klesch abandons Tata Steel's Long Products talks Klesch abandons Tata Steel's Long Products talks
(about 2 hours later)
The head of Klesch Group has abandoned plans to buy Tata Steel's Long Products unit, which employs 6,000 in the UK. The head of Klesch Group has abandoned plans to buy Tata Steel's Long Products unit, which has 6,000 UK workers.
US billionaire businessman Gary Klesch blamed the withdrawal on rising energy prices and cheap imports from China. US billionaire Gary Klesch blamed the withdrawal on rising energy prices and cheap imports from China.
He told the FT he was frustrated by the UK government's failure to address either of these issues. He told the Financial Times he was frustrated by the UK government's failure to address either issue.
"The industrial side is hurting. If it was important to them to ensure those jobs were saved they would figure it out." "The industrial side is hurting. If it was important to them to ensure those jobs were saved they would figure it out," Mr Klesch said.
Tata's Long Products division manufactures transport rails and steel sections for use in construction, heavy industry and excavation.Tata's Long Products division manufactures transport rails and steel sections for use in construction, heavy industry and excavation.
It includes plants in Scunthorpe and Teesside in England as well as Dalzell and Clydebridge in Scotland.It includes plants in Scunthorpe and Teesside in England as well as Dalzell and Clydebridge in Scotland.
There are also sites in Workington and York along with other operations in France and Germany.There are also sites in Workington and York along with other operations in France and Germany.
UK 'at disadvantage'UK 'at disadvantage'
Steel unions said the failure to come to a deal would not have a direct effect on jobs, but called on the government to do more to help plants in the UK to compete. Steel unions said the failure to reach a deal would not have a direct effect on jobs, but called on the government to do more to help plants in the UK to compete.
Roy Rickhuss, general secretary of the Community union said: "The UK continues to be at a disadvantage because of high energy costs, compounded by environmental levies which are not faced by competitors in Europe. Roy Rickhuss, general secretary of the Community union, said: "The UK continues to be at a disadvantage because of high energy costs, compounded by environmental levies which are not faced by competitors in Europe.
"The government's much-heralded support for energy-intensive industries has been slow to come on stream, whereas French and German producers have benefited from policy changes by their own governments for a number of years.""The government's much-heralded support for energy-intensive industries has been slow to come on stream, whereas French and German producers have benefited from policy changes by their own governments for a number of years."
In 2011, George Osborne said he wanted to boost the economy by encouraging the "march of the makers" but Mr Rickhuss said they were facing more a "stumble of steel producers". In 2011, George Osborne said he wanted to boost the economy by encouraging the "march of the makers", but Mr Rickhuss said they were facing more a "stumble of steel producers".
The Department for Business Innovation & Skills said: "The steel industry is an important part of the UK economy. It is facing challenging economic conditions at the moment and we are working closely with the sector." The Department for Business said: "The steel industry is an important part of the UK economy. It is facing challenging economic conditions at the moment and we are working closely with the sector."
It said it had paid £35m in compensation to steel companies to help offset electricity costs, supported the European Commission's anti-dumping investigation into imports of Chinese steel, and launched various initiatives within the industry.It said it had paid £35m in compensation to steel companies to help offset electricity costs, supported the European Commission's anti-dumping investigation into imports of Chinese steel, and launched various initiatives within the industry.
Tata Steel said it would continue to seek a sustainable future for the business which it had turned into a standalone unit. It believes this will allow the company to pursue other strategic options.