UK scrap to feed Tata Port Talbot electric arc furnaces following closure of existing blast furnaces

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Indian-owned Tata Steel has announced plans to build a new electric arc furnace in Port Talbot in Wales with £1.25 billion investment.

When completed in 2027, it will use UK-sourced scrap to produce steel.

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However, Port Talbot’s two existing blast furnaces and coke ovens will close in a phased manner starting from the middle of this year and finalising by the end of 2024.

As a result of this, 2,800 employees may lose their jobs eventually, with 2,500 of those occurring in the next 18 months.

Following discussions with trade unions as part of the UK Steel Committee, Tata Steel decided that a plan for keeping a single blast furnace was not feasible. However, the hot strip steel mill will continue through the proposed transition period and in the future. The downstream and steel processing centres will continue to serve customers by using imported semi-finished steel from Tata’s plants in the Netherlands and India, plus select partners.

The UK Government has committed £500 million of the investment in the new proposed electric arc furnace with Tata investing £70 million. Tata will also fund £130 million in support for affected employees on top of £100 million funding from the UK and Welsh Governments to support employees, contractors and communities.

Tata Steel chief executive and managing director T V Narendran said: “The course we are putting forward is difficult, but we believe it is the right one. Having invested almost £5 billion in the UK business since 2007, we must transform at pace to build a sustainable business in the UK for the long-term. Our ambitious plan includes the largest capital expenditure in UK steel production in more than a decade, guaranteeing long-term, high-quality steel production in the UK and transforming the Port Talbot facility into one of Europe’s premier centres for green steelmaking. 

“We recognise this proposed restructuring would have a major impact on the individuals and communities concerned, whom we will support with dignity and respect. In consultation with our union partners, Tata Steel will offer a comprehensive support package to mitigate the impact of any anticipated job losses, including helping employees to retrain and find new jobs. We will continue our work with the UK and Welsh governments, trade unions and the community to help those who may be affected through the proposed transition.”

On completion of the electric arc furnace, carbon emissions from the site will be cut by 85% and the UK’s overall carbon emissions by around 1.5%.