Tata May Turn U.K. Steelworks Into "Green Steel" Operation

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Thousands of jobs at Tata Steel's blast furnaces at Port Talbot in Wales could be at risk if the company moves forward with reported plans to replace them with electric arc furnaces.

Reports in the U.K. have revealed that the company has approached the government with plans to replace both furnaces with two electric arc furnaces in order to reduce its carbon footprint and avail itself of hundreds of millions of pounds in government support from the Project Birch fund, designed to support "strategically important enterprises". In May, Industrial Info reported that Tata Steel, the country's largest steelmaker with over 4,000 employees at Port Talbot alone, had requested roughly £500 million ($606.5 million) in government support to weather the coronavirus pandemic, according to the Minister of Parliament for Aberavon, Stephen Kinnock. For additional information, see May 25, 2020, article--U.K. Steelmakers Need More Government Cash to Survive.

Workers unions and local politicians have reacted angrily to the alleged proposals, which were revealed by The Sunday Times newspaper, and have not been discussed with them. Local MP Stephen Kinnock said: "They should not be making those kinds of proposals without discussing this first with the workforce and the trade unions. What I would also say is the blast furnaces at the Port Talbot steelworks are an absolutely vital part of primary steel making in Wales and in the U.K., and if you don't have those blast furnaces you're not able - with an electric arc furnace model - to produce anything like the same quality and variations of steel. So this proposal raises massive questions and the future of the industry - thousands and thousands of jobs are on the line."

Tata Steel would not confirm the projected changes but admitted the Port Talbot plant is facing challenges and that talks are underway with the government. "Given prevailing market conditions and disruption caused by the COVID-19 pandemic, it is clear that the current Port Talbot operations face structural challenges that need to be urgently addressed," said a spokesperson for Tata Steel Europe. "We are in active discussions with the U.K. government on several options for the future of our U.K. operations, including potential co-operation and participation from the government to create a sustainable decarbonised footprint for the future. Discussions with the government are constructive and ongoing, and at this stage no decisions have been made. It would therefore be inappropriate to comment on unsubstantiated speculation about the outcome of these discussions or the potential impact of any changes to secure our sustainable long-term future."

Fellow steelmaker Liberty House has since stated that it would be interested in collaborating with Tata Steel for the proposed conversion to electric arc furnaces at Port Talbot for melting scrap steel. Liberty House was one of the key bidders for Tata's Port Talbot site in 2016. Speaking to Businessline, Sanjeev Gupta, Liberty founder and chief executive officer, said: "We are always open to any kind of association with Tata. We have a long and mutually productive history with them, we consider them one of the best groups in the world. In 2016, we wanted to turn the polluting and inefficient Port Talbot blast furnaces using imported iron ore and coal to recycled Green steel using domestically available scrap powered by renewable energy. So today when I hear of talks of EAFs in Port Talbot it is a huge vindication of our model which everyone sneered at in the past."

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.