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Released January 29, 2024 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The U.K.'s largest steelmaker, Tata Steel U.K. (Mumbai, India), is to close both blast furnaces in Port Talbot with the expected loss of 2,800 jobs.
This plan, which has been condemned by U.K trade unions, is intended to reverse "more than a decade of losses and transition from the legacy blast furnaces to a more sustainable, green steel business,." Tata stated. It will now begin the shift to electric arc furnace (EAF) technology. Last September, Industrial Info reported that Tata Steel had won a £500 million (US$620 million) rescue package from the U.K. government to modernize its steel operations but had warned that it might have to cut up to 3,000 jobs to survive. For additional information, see September 20, 2023, article - Tata Steel U.K. Gets $620 Million Rescue Package. Port Talbot in Wales is the country's largest steelworks, capable of producing 5 million tonnes of steel per year. It employs 4,000 people, but Tata argued that without support and the proposed cuts, 8,000 jobs across Tata's U.K. operations would be at risk. Including the government support, Tata is planning to invest £1.25 billion (US$1.59 billion) in EAF technology. It is understood that it rejected a multi-trade union plan to keep one blast furnace operational during transition, citing costs.
Port Talbot's two high-emission blast furnaces and coke ovens will close in a phased manner with the first blast furnace closing around mid-2024 and the remaining heavy end assets would wind down during the second half of this year. The proposal also includes a wider restructuring of other locations and functions across the company, including the intended closure of the continuous annealing processing line (CAPL) in March 2025. Following discussions with the U.K. Steel Committee, Tata Steel has agreed that it would continue to operate the hot strip mill through the proposed transition period and in future. In addition, the downstream and steel processing centers would continue to operate, using imported semi-finished steel from Tata Steel plants in the Netherlands and India, among others.
The proposal to invest in EAF technology, which would be fed by predominantly UK-produced scrap, mirrors the successful installation of such low-carbon production facilities in other major steel-producing markets such as the U.S., Tata stated, "where it has cut emissions whilst guaranteeing production of complex, high quality steel". The company claimed it will "transform the competitiveness of Tata Steel U.K., secure most of its capability in terms of end products, whilst cutting its carbon emissions by about 85% and the U.K.'s overall carbon emissions by about 1.5%."
T.V. Narendran, Tata Steel's chief executive officer and managing director, said: "The course we are putting forward is difficult, but we believe it is the right one. Having invested almost £5 billion (US$6.4 billion) in the U.K. business since 2007, we must transform at pace to build a sustainable business in the U.K. for the long-term. Our ambitious plan includes the largest capital expenditure in U.K. steel production in more than a decade, guaranteeing long-term, high-quality steel production in the U.K. and transforming the Port Talbot facility into one of Europe's premier centers for green steelmaking."
U.K. union GMB stated: "More than 3,000 jobs and the future of British steelmaking is at stake. It is an absolute disgrace that Tata Steel, and the U.K. Government, appear intent on pursuing the cheapest instead of the best plan for our industry, our steelworkers and our country. It's unbelievable any Government would give a company £500 million to throw 3,000 workers on the scrapheap, and our Government must reevaluate its miserly offer to support investment at Tata Steel. The German, French and Spanish Governments are all committing billions to secure the future of their strategically important steel industries, and our Government must show similar ambition."
The U.K. is not the only European steel operation owned by Tata to face cuts. In November, the company's Dutch arm announced plans to cut 800 staff from its steelmaking operations at IJmuiden near Amsterdam. At the time, Tata said that the steel market has been in "dire straits for some time." The company employs around 9,200 people at IJmuiden. Similarly to the U.K., Tata has applied to the Dutch government for a financial aid package to help decarbonize its steel operations. For additional information, see November 20, 2023, article - Tata Steel Axing 800 Jobs at Dutch Steel Operations.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
This plan, which has been condemned by U.K trade unions, is intended to reverse "more than a decade of losses and transition from the legacy blast furnaces to a more sustainable, green steel business,." Tata stated. It will now begin the shift to electric arc furnace (EAF) technology. Last September, Industrial Info reported that Tata Steel had won a £500 million (US$620 million) rescue package from the U.K. government to modernize its steel operations but had warned that it might have to cut up to 3,000 jobs to survive. For additional information, see September 20, 2023, article - Tata Steel U.K. Gets $620 Million Rescue Package. Port Talbot in Wales is the country's largest steelworks, capable of producing 5 million tonnes of steel per year. It employs 4,000 people, but Tata argued that without support and the proposed cuts, 8,000 jobs across Tata's U.K. operations would be at risk. Including the government support, Tata is planning to invest £1.25 billion (US$1.59 billion) in EAF technology. It is understood that it rejected a multi-trade union plan to keep one blast furnace operational during transition, citing costs.
Port Talbot's two high-emission blast furnaces and coke ovens will close in a phased manner with the first blast furnace closing around mid-2024 and the remaining heavy end assets would wind down during the second half of this year. The proposal also includes a wider restructuring of other locations and functions across the company, including the intended closure of the continuous annealing processing line (CAPL) in March 2025. Following discussions with the U.K. Steel Committee, Tata Steel has agreed that it would continue to operate the hot strip mill through the proposed transition period and in future. In addition, the downstream and steel processing centers would continue to operate, using imported semi-finished steel from Tata Steel plants in the Netherlands and India, among others.
The proposal to invest in EAF technology, which would be fed by predominantly UK-produced scrap, mirrors the successful installation of such low-carbon production facilities in other major steel-producing markets such as the U.S., Tata stated, "where it has cut emissions whilst guaranteeing production of complex, high quality steel". The company claimed it will "transform the competitiveness of Tata Steel U.K., secure most of its capability in terms of end products, whilst cutting its carbon emissions by about 85% and the U.K.'s overall carbon emissions by about 1.5%."
T.V. Narendran, Tata Steel's chief executive officer and managing director, said: "The course we are putting forward is difficult, but we believe it is the right one. Having invested almost £5 billion (US$6.4 billion) in the U.K. business since 2007, we must transform at pace to build a sustainable business in the U.K. for the long-term. Our ambitious plan includes the largest capital expenditure in U.K. steel production in more than a decade, guaranteeing long-term, high-quality steel production in the U.K. and transforming the Port Talbot facility into one of Europe's premier centers for green steelmaking."
U.K. union GMB stated: "More than 3,000 jobs and the future of British steelmaking is at stake. It is an absolute disgrace that Tata Steel, and the U.K. Government, appear intent on pursuing the cheapest instead of the best plan for our industry, our steelworkers and our country. It's unbelievable any Government would give a company £500 million to throw 3,000 workers on the scrapheap, and our Government must reevaluate its miserly offer to support investment at Tata Steel. The German, French and Spanish Governments are all committing billions to secure the future of their strategically important steel industries, and our Government must show similar ambition."
The U.K. is not the only European steel operation owned by Tata to face cuts. In November, the company's Dutch arm announced plans to cut 800 staff from its steelmaking operations at IJmuiden near Amsterdam. At the time, Tata said that the steel market has been in "dire straits for some time." The company employs around 9,200 people at IJmuiden. Similarly to the U.K., Tata has applied to the Dutch government for a financial aid package to help decarbonize its steel operations. For additional information, see November 20, 2023, article - Tata Steel Axing 800 Jobs at Dutch Steel Operations.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
