The Tánaiste and Minister for Enterprise, Trade and Employment Ms Harney has expressed dismay at the newsIrish Ispat - formerly Irish Steel - is to close with the loss of 400 jobs.
Management at the steel-making plant in Haulbowline in Co Cork said today: "The decision was taken in view of continuing losses at Irish Ispat and after months of evaluating ways to make the plant more competitive in light of current market conditions."
It is believed the company was losing up to £750,000 a month.
The company said: "The management of Irish Ispat strived to implement certain cost reduction and production increase proposals but these did not seem to have sufficient support from trade union officials."
The company - said to owe £36 million to its creditors - called for a creditors' meeting to appoint a liquidator.
The factory was Irish Steel before it was bought by Ispat International for a nominal sum from the Government in 1996.
The company said it had invested nearly £24 million in the plant since the purchase andit had met all its commitments agreed at the time of the sale.
Ms Harney said: "My Department has been in ongoing contact with the company and its staff in recent times and we were aware of the strong competitive difficulties that were being experienced especially as a result of declining prices internationally for steel products allied to rising raw materials costs.
"I am also aware that negotiations involving the company and union representatives were in train in regard to a new viability plan and I would still retain some hope that this might be brought to fruition."
"However I have to accept that today's announcement represents a devastating blow to the workforce and their families," she added.
Fine Gael spokesman on enterprise, trade and local development Mr Charles Flanagan said he was shocked at thenews.
Mr Flanagan said: "This now brings the total of jobs lost this week to 1,050".
He called on the Tánaiste to visit Cork with the head of the IDA and Enterprise Ireland to assess the situation and to take immediate steps to find a replacement industry for the area.
Irish Ispat is a subsidiary of Ispat International, which is the world's eighth-largest steel-producer.
