London: Tata Steel on Friday said it has temporarily shut down its hot strip mill partly in South Wales and has cut 115 jobs at the plant due to poor demand from within Britain.

"Tata Steel is temporarily to mothball the hot strip mill at its Llanwern site in Newport, South Wales, with immediate effect," the company said in a statement. The facility is expected to remain mothballed until the UK economy and steel demand justify a restart, it said.

"The Llanwern cold rolling mill and Zodiac galvanizing line will continue in operation. However, the site will see a reduction of some 115 roles carried out by fixed-term contract employees, agency workers and contractors," Tata Steel said.

In the meantime the market will be supplied with material from the company's other hot strip mill in South Wales at Port Talbot, whose costs are lower, it added.

Commenting on the development, Jon Ferriman, Hub Director for the Strip Products UK hub said: "It is with great regret that we have had to make this decision...The Llanwern hot rolling mill is an important operation for us, and our intention is to bring it back into operation as soon as market conditions permit."

In 2009, the Llanwern hot strip mill was mothballed for nine months, between January and September due to poor market conditions.

Keith Hazlewood, secretary of Union GMB, said the announcement "yet again demonstrates what a roller-coaster industry the steel industry is".

He added, "This decision is a devastating blow for the UK steel industry, the economy and the local community of Newport, south Wales and the supply chain in the surrounding area, especially at this time of the year."  Hazlewood said the GMB along with the other steel unions would work with the company "to mitigate any compulsory job losses."

Welsh Secretary Cheryl Gillan said: "I am aware this is not the first time the company has taken this decision and I remain optimistic that the rolling mill will be brought back on line when economic circumstances allow."

She added, "Given the difficult economic climate faced by all businesses in Wales it is important both they and government - whether in London or Cardiff – remain sufficiently flexible to adapt quickly to changing circumstances."

The Welsh government said the decision was "hugely disappointing news that will be a blow to both the local economy and community".

"We will work with Tata to see what help we can provide to workers affected by this decision," said a spokesman.

(Agencies)