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Tata Steel is in advanced talks with the UK government to agree around GBP 500 million in state-backed funding to secure the future of its Port Talbot plant in South Wales, according to UK media reports this weekend.
The Indian steel major has been in long-drawn discussions related to the critical green transition of the UK’s largest steelworks, involving thousands of jobs in the country’s steel industry.
According to a Sky News’ report on Saturday, both sides are now close to agreeing a deal that would commit millions to the future of the Port Talbot steelworks.
“Tata Steel is continuing to discuss with the UK government a framework for continuity and decarbonisation of steel making in the UK amidst very challenging underlying business conditions given that several of its heavy end assets are approaching end of life, a Tata Steel spokesperson told PTI, when asked about the development.
“Given the financially constrained position of our UK business, any significant change is only possible with government investment and support, as also seen in other steel making countries in Europe where governments are actively supporting companies in de-carbonisation initiatives, the spokesperson said.
According to UK media reports, the draft plans close to being finalised include the UK government committing around GBP 500 million of funding and the Tata Group agreeing GBP 700 million of capital expenditure to help pay for a switch away from polluting coal-fired blast furnaces. The Indian steel major would reportedly commit to building electric arc furnaces, which offer greener, less labour-intensive ways of producing steel than traditional blast furnaces.
Opposition Labour’s Stephen Kinnock, the local MP for Aberavon which covers Port Talbot, stressed that unions “must be fully involved and workforce must support the plan”.
“Steel is a strategic industry that underpins our entire economy. It provides tens of thousands of highly skilled jobs, it’s vital for our national security, and it’s key to achieving net zero. Failure to invest in our steel industry would be the very definition of a false economy, he tweeted.
The unions, meanwhile, have expressed concerns over reports that a few thousand job losses are expected as part of the negotiations at the Tata-owned Port Talbot steelworks, which employs around 4,000 workers.
“We continue to support a solution that will maintain blast furnace production and safeguard the future for all the UK plants. We are ready to use all means at our disposal to protect jobs and our vital strategic industry, said the Community steelworkers union.
The UK government has not commented on the latest reports, but any support package is expected to be dependent on pledges of investment into the future from the Indian steel giant.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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