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Released September 20, 2023 | 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), has won a £500 million (US$620 million) rescue package from the government, but the company may still have to cut 3,000 jobs to survive.
The money, which has been sought by Tata and other struggling U.K. steel firms in recent years, will go towards keeping the country's largest steelworks at Port Talbot in Wales in operation while transforming into a site for green steel production. Without support, 8,000 jobs across Tata's U.K. operations--4,000 of which are at Port Talbot--were at risk which would have further impacted around 12,500 jobs in the upstream supply chain.
Along with a commitment of £700 million (US$867 million) from Tata, the money will be spent in state-of-the-art electric arc furnace steelmaking at the Port Talbot site. It is being described as the first major step towards decarbonisation of the local steel industry, which will reduce direct emissions by 50 million tonnes over a decade at what is currently the U.K.'s largest single carbon emitter. Tata Steel will soon commence consultation on the proposal and the transition period, including potential "deep restructuring for the carbon-intensive, unsustainable iron and steelmaking facilities." Many of the existing "heavy end" assets such as blast furnaces and coke ovens are reaching the end of their operational life.
"Tata Steel UK has been facing significant challenges due to the heavy end facilities approaching their end of life," explained Tata Steel's Chief Executive Officer T.V. Narendran after the deal was announced. "The proposed project is one of the largest investments in the U.K. Steel Industry in recent decades, provides an opportunity for an optimal outcome for all stakeholders. We will undertake a meaningful consultation with the Unions on the proposed transition pathway in the context of future risk and opportunities for Tata Steel UK. With the support of the UK Government and dedicated efforts of the employees of Tata Steel U.K. along with all stakeholders, we will work to transform Tata Steel UK into a green, modern, future ready business."
U.K. Business and Trade Secretary Kemi Badenoch said: "The U.K. Government is backing our steel sector, and this proposal will secure a sustainable future for Welsh steel and is expected to save thousands of jobs in the long term. This is an historic package of support... and will not only protect skilled jobs in Wales but also grow the U.K. economy, boost growth and help ensure a successful steel industry."
The switch to green steel production may result in the loss of 3,000 of Port Talbot's 4,000-strong workforce. The deal between Tata and the government was branded "a disgrace" by the country's leading workers' union, UNITE. General Secretary Sharon Graham said: "These plans are disgraceful, short sighted and lack ambition. Steel is a foundation industry and the opportunity is being missed to make the U.K. a world leader in steel production. Unite will be fighting tooth and nail not only to save these jobs but to create more jobs in steel."
The U.K.'s steel sector has been struggling for years, a situation made worse by the COVID-19 pandemic. Tata Steel failed in its efforts to get a £500 million (US$620 million) cash injection to combat the financial impact of COVID-19. For additional information, see May 25, 2020, article - U.K. Steelmakers Need More Government Cash to Survive. Last October, Industrial Info reported that British Steel, the U.K.'s second-largest steelmaker, had requested £500 million (US$619 million) in financial aid from the government to help rescue the company. The company was originally rescued by China's Jingye Steel at the end of 2020 with a commitment to invest £1.2 billion (US$1.48 billion) to keep its key manufacturing sites at Teesside and Scunthorpe running. For additional information, see October 11, 2022, article - British Steel Seeks $570 Million Rescue Package and November 18, 2019, article - British Steel Saved By China's Jingye.
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).
The money, which has been sought by Tata and other struggling U.K. steel firms in recent years, will go towards keeping the country's largest steelworks at Port Talbot in Wales in operation while transforming into a site for green steel production. Without support, 8,000 jobs across Tata's U.K. operations--4,000 of which are at Port Talbot--were at risk which would have further impacted around 12,500 jobs in the upstream supply chain.
Along with a commitment of £700 million (US$867 million) from Tata, the money will be spent in state-of-the-art electric arc furnace steelmaking at the Port Talbot site. It is being described as the first major step towards decarbonisation of the local steel industry, which will reduce direct emissions by 50 million tonnes over a decade at what is currently the U.K.'s largest single carbon emitter. Tata Steel will soon commence consultation on the proposal and the transition period, including potential "deep restructuring for the carbon-intensive, unsustainable iron and steelmaking facilities." Many of the existing "heavy end" assets such as blast furnaces and coke ovens are reaching the end of their operational life.
"Tata Steel UK has been facing significant challenges due to the heavy end facilities approaching their end of life," explained Tata Steel's Chief Executive Officer T.V. Narendran after the deal was announced. "The proposed project is one of the largest investments in the U.K. Steel Industry in recent decades, provides an opportunity for an optimal outcome for all stakeholders. We will undertake a meaningful consultation with the Unions on the proposed transition pathway in the context of future risk and opportunities for Tata Steel UK. With the support of the UK Government and dedicated efforts of the employees of Tata Steel U.K. along with all stakeholders, we will work to transform Tata Steel UK into a green, modern, future ready business."
U.K. Business and Trade Secretary Kemi Badenoch said: "The U.K. Government is backing our steel sector, and this proposal will secure a sustainable future for Welsh steel and is expected to save thousands of jobs in the long term. This is an historic package of support... and will not only protect skilled jobs in Wales but also grow the U.K. economy, boost growth and help ensure a successful steel industry."
The switch to green steel production may result in the loss of 3,000 of Port Talbot's 4,000-strong workforce. The deal between Tata and the government was branded "a disgrace" by the country's leading workers' union, UNITE. General Secretary Sharon Graham said: "These plans are disgraceful, short sighted and lack ambition. Steel is a foundation industry and the opportunity is being missed to make the U.K. a world leader in steel production. Unite will be fighting tooth and nail not only to save these jobs but to create more jobs in steel."
The U.K.'s steel sector has been struggling for years, a situation made worse by the COVID-19 pandemic. Tata Steel failed in its efforts to get a £500 million (US$620 million) cash injection to combat the financial impact of COVID-19. For additional information, see May 25, 2020, article - U.K. Steelmakers Need More Government Cash to Survive. Last October, Industrial Info reported that British Steel, the U.K.'s second-largest steelmaker, had requested £500 million (US$619 million) in financial aid from the government to help rescue the company. The company was originally rescued by China's Jingye Steel at the end of 2020 with a commitment to invest £1.2 billion (US$1.48 billion) to keep its key manufacturing sites at Teesside and Scunthorpe running. For additional information, see October 11, 2022, article - British Steel Seeks $570 Million Rescue Package and November 18, 2019, article - British Steel Saved By China's Jingye.
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).
