Tata Steel confirms Electric Arc furnace investment in Port Talbot, 2,800 jobs to be cut
19 January 2024
Tata Steel confirmed on 19 January that it will commence statutory consultation as part of its plan to transform and restructure its UK business. Under the transformation plan, Tata Steel will embark on a £1.25 billion investment in Electric Arc Furnace technology in Port Talbot which is being back by up to £500 million of UK Government support. The plans will see 2,800 jobs cut across the UK.
Image: Tata Steel
In a statement, Tata Steel said the plan is intended to reverse more than a decade of losses and transition from the legacy blast furnaces to a more sustainable, green steel business. The transformation would secure most of Tata Steel UK’s existing product capability and maintain the country’s self-sufficiency in steelmaking, while also reducing Tata Steel UK’s CO2 emissions by 5 million tonnes per year and overall UK country emissions by about 1.5%, it added.
Tata Steel has engaged in several months of detailed discussions with the UK Steel Committee and its advisors, which examined feasibility studies and financial analysis of the long-term viability of steelmaking at Port Talbot.
In discussions with the UK Steel Committee, Tata Steel has agreed to revise its proposal and would continue to operate the Port Talbot hot strip mill throughout the transition period and in future. It has also considered the committee’s endorsed proposal for partial continuity of blast furnace steelmaking assets until Electric Arc Furnace facilities are commissioned in Port Talbot, Tata said.
Under Tata Steel’s proposed restructuring programme, Port Talbot’s two high-emission blast furnaces and supporting facilities would be closed in a phased manner. The first blast furnace and coke ovens closing around mid-2024 and then progressively winding down the remaining heavy end assets during the second half of the calendar year. The proposal also includes a wider restructuring of other locations and functions across the company, including the intended closure of the Continuous Annealing Processing Line (CAPL) in March 2025.
Tata Steel has developed plans which would enable it to secure continuity of supply through its existing downstream and steel processing sites for UK and overseas customers, utilising imported semi-finished steel including from Tata Steel plants in the Netherlands and India as well as other select strategic suppliers until the commencement of Electric Arc Furnace production.
In order to be able to deliver the proposed Electric Arc Furnace in 2027, Tata Steel has begun engineering design work and construction planning for a furnace which would be among the most modern in the world. It is in advanced planning discussions with National Grid in relation to enabling infrastructure and has also begun engagement with the local authority and regulators.
The transition at Tata Steel’s UK operations is subject to consultation but could be expected to result in up to 2,800 potential job losses across the business out of which around 2,500 roles could be impacted during the next 18 months. Tata Steel expects that a further 300 roles could be impacted in three years, which could include the potential consolidation and rationalisation of cold rolling assets in Llanwern once the required investments are completed at Port Talbot.
Tata Steel and the UK and Welsh governments have established a dedicated Transition Board to support potentially affected employees, contractor employees and their communities, with £100 million funding for short-term support and long-term economic regeneration.
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