Tata Steel Ltd.

Tata Steel, the world’s eighth-largest steelmaker would shut a part of Corus’ Teesside plant in the UK, cutting 1,700 jobs that the unions said would have disastrous consequences as Prime Minister Gordon Brown’s Labour government faces election next year.

Tata said on Friday it has been unable to secure a long-term buyer for its products from Teesside Cast Products (TCP) after Italy’s Marcegaglia SpA, South Korea’s Dongkuk Steel Mill, Luxembourg-based Ternium and Swiss-Italian steelmaker Duferco Participations Holding walked away from a 10-year agreement to buy 80% of the output from the Corus unit earlier this year.

However, raw material processing operations, largely dependent on internal orders, including Redcar Wharf, Redcar Coke Ovens and some of the power generating capacity, will be kept open. Tata Steel, like most steel producers in the world, has been grappling with slumping product prices that have eroded profitability. It has been looking to cut costs after it paid nearly $13 billion to buy the Anglo-Dutch Corus Group in 2006 at the peak of the market.