London: Tata Steel, the biggest steelmaker in Britain, is expected to cut around 1,200 jobs at its Scunthorpe plant, a person familiar with the matter said on Friday as the government convened a crisis summit on the sector.

Scunthorpe, which produces steel mainly used in construction and infrastructure projects, is part of Tata Steel’s loss-making long products unit, which the company is trying to sell. The unit employs about 6,500 people.

The liquidation of the UK’s second largest steelmaker, SSI UK, was announced this month, with the loss of over 2,000 jobs and thousands more indirectly related to steelmaking.

“This is yet another blow to our steel communities and demonstrates the precarious state of the UK steel industry," said Roy Rickhuss, general secretary of union Community.

“(This) emphasises the need for government action which Community and the employers have been calling for at the summit today."

A Tata Steel spokesman said, “We’ve made a number of structural changes to our UK business over the last months and years to make us more competitive." He further said, without addressing reports of job losses, “Like all companies we continue to review the performance of our business".

Europe’s second-largest steelmaker, Tata has cut thousands of jobs since it bought Anglo-Dutch producer Corus in 2007. In July it said it could cut more than 700 jobs, mostly at its operations in Rotherham.

The company spun off its long products division into a standalone business in August after the withdrawal of Klesch Group, a global commodities business, from talks to buy the division.

British media reports on Friday said jobs were also at risk at Tata Steel operations in Scotland.

Commenting, the Unite union said, “Time is ticking on the UK’s steel industry and the news of yet more job losses should jolt the government out of its laissez-faire approach to this vital part of the UK economy."

“If the government is serious about rebalancing the economy then it needs to take action against the dumping of cheap Chinese imports and support an industry which is being hammered by high energy costs."

Producing steel profitably in Britain is difficult due to cheap imports especially from China as well as due to a strong currency, energy costs and “green" taxes imposed on heavy industry that are some of the highest in the world.

The sector employs fewer than 20,000 people, down from 200,000 in the 1970s.

Steel prices globally are at their lowest levels in over a decade thanks to over-capacity and an economic slowdown in China, which consumes nearly half the world’s steel. Reuters

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