UK agrees £500m deal with Tata Steel to secure Port Talbot plant’s future
18 September 2023
The UK Government and Tata Steel agreed on a proposed joint investment package on 15 September which will help secure the future of Tata’s Port Talbot plant, subject to consultation and regulatory approvals. Tata Steel is expected to invest £1.25 billion, including a UK Government grant worth up to £500 million in a new Electric Arc Furnace for greener steel production at Port Talbot, which is currently the UK’s largest single carbon emitter.
Port Talbot steelworks - Image: Shutterstock
The Electric Arc Furnace would replace the existing coal-powered blast furnaces – which are nearing the end of their effective life – and reduce the UK’s entire carbon emissions by around 1.5 percent as a result.
Tata Steel UK employs over 8,000 people, including at Port Talbot, which the company has said would otherwise be under serious threat without substantial investment to guarantee its future. Tata Steel also supports around 12,500 further jobs in the upstream supply chain.
Business and Trade Secretary Kemi Badenoch said: “The UK 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 from the UK Government and will not only protect skilled jobs in Wales but also grow the UK economy, boost growth and help ensure a successful UK steel industry.”
The investment in the less labour-intensive Electric Arc Furnaces could lead to the loss of thousands of jobs still, unions have said. The UK Government said it would also ensure a broad range of support for any staff who are affected by the transition, working with the Welsh Government and Tata Steel to establish a dedicated transition board to support both affected employees and the local economy, with up to £100m funding.
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