Tata confirms UK blast furnace closure

Tata Steel has confirmed it will close blast furnaces at its Port Talbot steel plant and cut up to 2,800 jobs. The hot rolling mill will continue to operate during the proposed transition period, with subsequent units receiving imported steel raw materials from Tata Steel's plants in the Netherlands and India.
The first of the two blast furnaces will close around mid-2024, with the second unit and coke ovens closing by the end of the year. The proposal also includes a broader restructuring of the company, including the planned closure of the continuous annealing line (CAPL) in March 2025. The new electric arc furnace should be commissioned in 2027.

Of the affected jobs, approximately 2,500 will be affected over the next 18 months and a further 300 will be affected over the next three years. This could include the potential "consolidation and rationalization" of the Llanwern cold rolling assets once the required investment is completed at Port Talbot, Tata says.

Following discussions with the UK Steel Board, Tata agreed to reconsider its proposal and continue to operate the hot rolling mill.

However, the company commissioned an independent study, which concluded that it was not practical to continue blast furnace production while building a new EAF. This is due to projected operating costs, the risks of constructing an EAF in an already operating steel shop and the near end of life of several heavy assets.

"The course we are proposing is difficult, but we believe it is the right one," Tata TV chief executive Narendran says in a note seen by Kallanish. “Having invested almost £5 billion [$6.3 billion] in UK businesses since 2007, we must transform at a rapid pace to build a sustainable UK business for the long term. Our ambitious plan includes the largest capital investment in UK steel production in over a decade, ensuring the UK's long-term production of high-quality steel and transforming the Port Talbot plant into one of Europe's leading clean steel production centres.”

The proposal to invest in EAFs, fueled predominantly by scrap produced in the UK, reflects the successful installation of such low-carbon facilities in other major steel markets such as the US. According to Tata Steel, this has reduced emissions while ensuring the production of complex, high-quality steel.

“On completion, the program will transform Tata Steel UK's competitiveness, delivering the majority of its end product capabilities, while reducing carbon emissions by approximately 85% and overall UK carbon emissions by approximately 1.5%. The proposal to use scrap from the UK as a feedstock for future steel production will also support the country's self-sufficiency, as almost all raw materials for current blast furnaces need to be imported,” the company adds.

The steelworks is offering affected workers a £130 million package of support, including furlough provisions, skills training, community support programs and job search initiatives. It has also set up a £100m special transition council with the government to support affected staff.

Reacting to the news, the GMB and Community unions said "all options are on the table" to protect jobs, including industrial action. “It is an absolute disgrace that Tata Steel and the UK Government appear intent on pursuing the cheapest, not the best, plan for our industry, our steelworkers and our country,” they said in a joint statement. “Tata Steel and the UK Government must reconsider their positions to protect the future of the British steel industry and prevent a major industrial dispute.”

They also criticized Unit the Union for undermining several unions' proposals by "unilaterally campaigning for discredited fanciful solutions" and called for it to return to co-operation.

Welsh Economy Minister Vaughan Gething said: “It is clear by now that a future that does not require the cuts outlined in today's announcement has not been fully explored. The key recommendation to operate one blast furnace for a significantly longer period was economically compelling and formed the basis for a fair and just transition for TSUK [Tata Steel UK]. This proposal emphasized that the Company could retain a significant workforce while remaining commercially viable."

“As stated by Tata Steel, any agreement is subject to appropriate regulatory approvals, information processes and consultations.