The UK government on Friday, September 15, announced that it had agreed a joint investment package with Tata Steel for Britain's largest steelworks in Wales, including a grant worth up to £500 million. The Tata Group's steel giant said in a statement that both parties have entered into a mutual agreement to invest in electric frc Furnace steelmaking at the Port Talbot facility, with a total capital expenditure of £1.25 billion, inclusive of the £500 million grant.
Port Talbot steelworks is the UK's single biggest carbon emitter, and the government has been looking to help British Steel and Tata Steel to replace dirty blast furnaces. The Department for Business and Trade said the money would help finance the new electric arc furnace at Tata Steel's Port Talbot plant, safeguarding 5,000 of the more than 8,000 jobs, according to media reports.
Business and Trade Secretary Kemi Badenoch hailed the funding as a "historic package of support" that would protect jobs and the UK steel industry, as well as help boost economic growth. She dismissed concerns about potential job losses, insisting on a visit to the plant: "We are saving jobs which would have been lost.
The project will bolster UK’s steel security and would be the first major step towards decarbonisation of the local steel industry, reducing direct emissions by 50 million tonnes over a decade, according to a regulatory filing by Tata Steel to the stock exchanges on Friday, September 15.
The proposed project would ensure continuity of steel making in Port Talbot after the transition, and transform Tata Steel UK into a sustainable, capital-efficient and profitable business. The jobs of Tata Steel UK employs, including at Port Talbot, which was under serious threat without substantial investment. The company also supports around 12,500 further jobs in the upstream supply chain.
“The agreement with the UK government is a defining moment for the future of the steel Industry and indeed the industrial value chain in the UK,” said Tata Group Chairman N. Chandrasekaran, who had been working with the Prime Minister Rishi Sunak led government in developing a "transition pathway" for sustainable steelmaking in the UK.
“The proposed investment will preserve significant employment and presents a great opportunity for the development of a green technology-based industrial ecosystem in South Wales. We look forward to working with our stakeholders on these proposals in a responsible manner,” he said.
The new electric furnace is to replace the existing coal-powered blast furnaces, which are nearing the end of their effective life, and reduce UK’s entire carbon emissions by around 1.5 per cent as a result. An electric arc furnace uses an electric current to melt scrap steel or iron and produce steel, whereas blast furnaces use co*ke, a carbon-intensive fuel made from coal to produce steel.
“This proposal is a landmark moment for maintaining ongoing UK steel production – supporting sustainable economic growth, cutting emissions, and creating green jobs. It is right that we are ready to step in to protect this world class manufacturing industry and to support a green growth hub in South Wales,” said UK Chancellor Jeremy Hunt.
The government said Tata Steel UK would now inform and consult with staff and unions on the proposals. Last year, the Tata Group had warned that its UK operations were under threat unless it secured government funding to help it move to less carbon-intensive electric arc furnaces.
Britain's steel industry directly employs 39,800 people according to figures released by UK Steel in May, and supports a further 50,000 jobs in the supply chain. A domestic steel-making industry is crucial to Britain's security because it is used to build warships and fighter jets, as well as underpinning the manufacturing, auto and transport sectors.
On Friday, shares of Tata Steel settled 0.30 per cent higher at ₹132.05 apiece on the BSE.
With inputs from Agencies
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First Published:
15 Sep 2023, 04:31 PM IST
Business NewsCompaniesNewsTata Steel signs 500 million pound-deal with UK govt for Port Talbot steel plant; 3,000 jobs potentially at risk
