Production at Allied Steel and Wire's Tremorfa Works will resume

Around 800 workers lost their jobs when ASW closed its Cardiff plants in July 2002.

Then in January this year, Barcelona-based Celsa bought ASW, but workers faced months of uncertainty as the new owners decided whether or not to resume production in Wales or transfer equipment to sites elsewhere in Europe.

We've heard rumours that not everyone will be re-employed, but the fact that Celsa are spending money on the plant is very positive Ex-ASW worker Peter Georgeadis

The Tremorfa site has been mothballed since its closure, but Celsa announced on Thursday that it would make "significant expenditure" on the plant ahead of making a final decision in the summer on whether to restart production.

The company has not yet indicated how many jobs are likely to be created if it does finally reopen the ASW plant.

In a statement, Celsa said: "UK market conditions remain very difficult.

"However, Grupo Celsa has concluded that there is now sufficient confidence to take the next step and we have decided to bring the Cardiff plant back to operational status.

It is a step in the right direction, but it is not conclusive Roy Rickhuss, ISTC

"Given that the plant has been shut down for more than nine months this will take several months and significant expenditure on plant and equipment.

"Grupo Celsa anticipates being able to make a decision on whether to restart production before the end of quarter two."

Steelworker Peter Georgeadis, 52, of Cardiff, lost his job at ASW after 31 years working at Tremorfa.

He told BBC Wales News Online: "It's great news, the first positive thing I've heard all year.

There were fears that steelmaking had ended in Cardiff

"I'm looking to go back to work there, although we don't yet know who is going to get their jobs back.

"We've heard rumours that not everyone will be re-employed, but the fact that Celsa are spending money on the plant is very positive."

Union leaders also welcomed the announcement by Celsa.

'Right direction'

Roy Rickhuss, Divisional Officer for the Iron and Steel Trades Confederation (ISTC) union, said: "Celsa has not made the final decision over jobs, but the decision that has been made is positive in that it is bringing the plant back to a state of readiness.

"It is a step in the right direction, but it is not conclusive.

"There is still a long way to go, but it is excellent news and something we have all been campaigning for."

Mr Rickhuss added that ISTC representatives would be travelling to Celsa headquarters in Barcelona early next week to meet with trade unions and management.

He added: "It is a welcome opportunity to meet with people in Spain, start up a working relationship and talk about their plans for Cardiff.

"We will have to have strong links with Spain from now on and it is important for us to build up a relationship with them."