A Scottish steel mill that won a contract to supply steel plates for the Royal Navy’s new fleet solid support ships is facing production challenges due to a cash shortage, leaving the shipbuilder in an uncertain wait for the necessary materials.
Liberty Steel’s Dalzell plant in Scotland has been unable to start production in earnest because there is “no cashflow to buy slabs,” despite an order to supply 34,000 tonnes of metal plates for the Royal Navy’s fleet solid support (FSS) ships, according to two sources familiar with the situation.
The cash shortage at Liberty Steel is the latest sign of the ongoing financial troubles facing companies owned by the embattled metals tycoon Sanjeev Gupta. Gupta has lost control of several parts of his GFG Alliance empire since the 2021 collapse of his key lender, Greensill Capital.
The Dalzell mill has not filed accounts for five years, and Gupta is facing prosecution over the failure to file accounts, as well as a long-running fraud investigation by the Serious Fraud Office.
Scottish metal magnate Sir David Murray has called for the UK government to step in and pressure Liberty Steel to hand over control of the plant, saying he would be willing to take over the business. Murray previously tried to buy the plant in 2015 before it was sold to Gupta in a deal brokered by the Scottish government.
The cash shortage at Liberty Steel has left it unable to buy the slabs of steel it needs from British Steel, although workers have continued to be paid 80% of their salaries. Small trial runs in November were only able to process about 1,000 tonnes – or around three days of output – according to sources.
Liberty Steel has expressed hope of restarting production in the coming weeks, but some industry figures have expressed skepticism over its plans. The delay in production at the Dalzell plant has left the Royal Navy’s shipbuilder, Navantia, in limbo as it awaits the necessary steel to build the three new fleet solid support ships.
The FSS ships, designed to carry munition, food, and other supplies for the Royal Navy’s Royal Fleet Auxiliary, are due to be built in Belfast by the Spanish state-owned shipbuilder Navantia. The first ship, RFA Resolute, is expected to be delivered in 2031.