Tata Steel to proceed with Port Talbot plan

Tata Steel has reaffirmed that it will continue to proceed with its Great British Pound (GBP) 1.25 billion investment to build a state-of-the-art Electric Arc Furnace for steel production in Port Talbot in collaboration with the UK government.

Further, it also informed that as announced on January 19 this year, it will shut down its existing two Blast Furnaces, i.e., No. 4 and No. 5 by end of June and end of September respectively.

"Following its 19 January 2024 proposal to restructure the UK business and 7 months of formal and informal discussions with the UK Steel Committee (the multi-union forum) and its advisers, Tata Steel has today announced its decision, paving the way for a major transformation of Britain’s largest steel plant at Port Talbot, in south Wales," the company said in a media release on Thursday.

Calling this as the 'most viable' option, Tata Steel chief T V Narendran said that the company's proposal secures a long-term future for the business and preserves the majority of jobs in the UK as against the unions' 'unaffordable plan'.

"We will continue to work with the trade unions over the following 2 weeks to agree a memorandum of understanding on the future of the UK business and the impact on our people," he added.

Tata Steel expects to order equipment for the electric arc furnace by September 2024, and based on the current permit timelines, start construction on the project by August 2025.

In addition, Tata Steel UK has accepted an updated and revised connection offer from National Grid, the UK's power infrastructure provider.

The company has also said that in the next few days, it will finalise the necessary paperwork to ensure that it will have the necessary power infrastructure in place to commission the electric arc furnace on time by the end of 2027.

Tata Steel has also said that following the closure of Blast Furnace No.4, the remaining heavy end assets will wind down, and the Continuous Annealing Processing Line will close in March 2025.

Moreover, Tata Steel UK is also going to provide additional support to around 2,800 affected employees.

This includes helping them with job searches; supporting facilities for training & upskilling activities; finance for small and medium-sized businesses through UK Steel Enterprise regeneration and job creation scheme.

The company has also committed a one-time £20 million to the Transition Board (out of its total £100 million).