A planned joint venture that would have seen a Cumbrian quarry and kilns become part of a new European steel producing giant has been scrapped.

Tata Steel and German multinational thyssenkrupp AG unveiled plans to create a new company thyssenkrupp Tata Steel in June last year.

However, the 50-50 venture is now off, with Tata Steel saying it did had become “increasingly clear” that the European Commission was not intending to clear the deal.

The deal would have seen Tata Steel’s limestone quarry and lime kiln operations at Shap, and its 35-strong workforce, move into the new company.

The site – a distinctive landmark off the M6 at junction 39 – is part of Tata Steel’s strip products arm. It supplies products to Tata Steel’s operations at Port Talbot, in Wales, Ijmuiden, in the Netherlands and Duisburg, in Germany.

in-Cumbria understood that the joint venture had the potential to bring in more customers for the site, which has been in operation since 1962, by becoming part of a wider portfolio.

However, the breakdown has now become yet another chapter in a long-running saga around Tata Steel’s operations in Cumbria, and the UK.

The operation at Shap had been placed up for sale along with all of Tata Steel’s UK operations in early 2016, however in-Cumbria learned that the site was quietly taken off the market when deals were struck for its long products and speciality steels arms.

Tata Steel did its Workington plant to Greybull Capital for £1 in 2016, saving 225 jobs. The site currently trades under the name TSP Engineering.

Tata Steel once again has been forced to fend off questions about the future of its remaining sites, with unions expressing their concerns and demanding clarity.

Tata Steel's executive director Koushik Chatterjee, said: “One of the fundamental strategies of going ahead in the deal was to create a more sustainable business. Obviously, we will go back to the drawing board and look at more options.

“The business has to perform, the business has to work hard and deliver results. In the meantime, we will look at other strategic opportunities if they were to emerge and we will have to look at specifically what it entails for Tata Steel, Tata Steel Europe.”

Roy Rickhuss, general secretary of the steelworkers' trade union Community, said the collapse of the joint venture “raises as many questions as answers”.

Unite national officer Tony Brady said: "Tata Steel's workforce has been on a rollercoaster of uncertainty for several years. 

“Tata Steel needs to give workers the assurances that their futures are secure. The Government must stand ready to step in with assistance for Tata Steel and play its part too.”