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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The U.K. government has agreed a "new and improved deal" with the country's largest steelmaker, Tata Steel U.K. (Mumbai, India), and confirmed a rescue subsidy of £500 million (US$620 million).
The rescue package is designed to help the company modernize its steel operations by investing in electric arc furnace (EAF) technology while moving ahead with the closure of its older smelting operations at Port Talbot in Wales, where the company employs 4,000 people. In January, Tata had announced the end of traditional steelmaking at Port Talbot and that up to two-thirds of the workforce would be made redundant. The new deal will still see the loss of 2,500 workers with a further 300 expected to be made redundant in the future, but the new Labour government said there is now hope of future jobs. Tata Steel has also agreed to look at future investment opportunities, which may include manufacturing wind turbines to be made in south Wales at a new plate mill.
U.K. Business and Trade Secretary Jonathan Reynolds said: "Port Talbot has always been and will always be a steelmaking town. This deal does what previous deals failed to do--give hope for the future of steelmaking in South Wales. Previous government inaction has blighted the steelmaking industry. That's why this Government is taking strong action through a new deal and strategy which will reverse the industry's stagnation and set out a long-term vision for a bright and sustainable future. We know that a cleaner, greener future for U.K. steelmaking is vital to the industry's long-term economic stability."
Tata will now offer staff facing compulsory redundancy a comprehensive training programme to provide them with "recognised qualifications in sought-after skills." It is also offering an improved redundancy package to workers losing their jobs. Workers unions were less enthusiastic in their response but were positive about the outcome.
"This deal is not something to celebrate, but -- with the improvements the unions and the Government have negotiated -- it is better than the devastating plan announced by Tata and the Tories back in September 2023," read a joint statement from the Community and GMB unions. "Clearly this is not where we wanted to be, and we know that a better plan was available. The Multi-Union Plan published by Community and the GMB last November would have safeguarded Port Talbot steelmaking and secured a just transition for all of the workforce. Tata's decision to reject that credible and fully-costed plan will remain a huge missed opportunity."
Port Talbot has traditionally been one of the U.K.'s largest emitters of carbon, accounting for roughly 10%. The new EAF facility will be fed predominantly by U.K.-produced scrap, reducing carbon emissions from the site by 85% and the U.K.'s industrial carbon emissions by about 8%. Port Talbot's two high-emission blast furnaces and coke ovens are being closed in a phased manner, with the first blast furnace shut in July and the remaining heavy end assets expected to wind down during the second half of this year.
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 rescue package is designed to help the company modernize its steel operations by investing in electric arc furnace (EAF) technology while moving ahead with the closure of its older smelting operations at Port Talbot in Wales, where the company employs 4,000 people. In January, Tata had announced the end of traditional steelmaking at Port Talbot and that up to two-thirds of the workforce would be made redundant. The new deal will still see the loss of 2,500 workers with a further 300 expected to be made redundant in the future, but the new Labour government said there is now hope of future jobs. Tata Steel has also agreed to look at future investment opportunities, which may include manufacturing wind turbines to be made in south Wales at a new plate mill.
U.K. Business and Trade Secretary Jonathan Reynolds said: "Port Talbot has always been and will always be a steelmaking town. This deal does what previous deals failed to do--give hope for the future of steelmaking in South Wales. Previous government inaction has blighted the steelmaking industry. That's why this Government is taking strong action through a new deal and strategy which will reverse the industry's stagnation and set out a long-term vision for a bright and sustainable future. We know that a cleaner, greener future for U.K. steelmaking is vital to the industry's long-term economic stability."
Tata will now offer staff facing compulsory redundancy a comprehensive training programme to provide them with "recognised qualifications in sought-after skills." It is also offering an improved redundancy package to workers losing their jobs. Workers unions were less enthusiastic in their response but were positive about the outcome.
"This deal is not something to celebrate, but -- with the improvements the unions and the Government have negotiated -- it is better than the devastating plan announced by Tata and the Tories back in September 2023," read a joint statement from the Community and GMB unions. "Clearly this is not where we wanted to be, and we know that a better plan was available. The Multi-Union Plan published by Community and the GMB last November would have safeguarded Port Talbot steelmaking and secured a just transition for all of the workforce. Tata's decision to reject that credible and fully-costed plan will remain a huge missed opportunity."
Port Talbot has traditionally been one of the U.K.'s largest emitters of carbon, accounting for roughly 10%. The new EAF facility will be fed predominantly by U.K.-produced scrap, reducing carbon emissions from the site by 85% and the U.K.'s industrial carbon emissions by about 8%. Port Talbot's two high-emission blast furnaces and coke ovens are being closed in a phased manner, with the first blast furnace shut in July and the remaining heavy end assets expected to wind down during the second half of this year.
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).
