- UK, Tata Steel sign 1.25-million-pound deal; protest over potential job cuts.
- Reacting to the development, British Prime Minister Rishi Sunak called it “a big day for UK steel”.
- Tata will use the government subsidy to help convert the South Wales plant’s two coal coal-fired blast furnaces to electric arc versions.
- Rishi Sunak government’s plan to pump in 500 million pounds into the country’s biggest steel plant in South Wales.
- This comes as protests erupted owing to potential job risks to 3,000 workers.
- It is being dubbed as one of the “largest” UK government support packages in history.
The United Kingdom and Tata Steel on Friday announced a joint investment package worth 1.25 billion pound, including a government grant of 500 million pound, for the country’s largest steelworks in Wales. Dubbed as one of the “largest” UK government support packages in history, the investment at the Port Talbot would modernize production with state-of-the-art Electric Arc Furnace steelmaking and reduce Britain’s entire carbon emissions by around 1.5%.
Reacting to the development, British Prime Minister Rishi Sunak called it “a big day for UK steel”.
Here are few things we need to know about the mega steel deal in the UK.
- Tata currently owns the Port Talbot steelworks in south Wales. It will use the government subsidy to help convert the plant’s two coal coal-fired blast furnaces to electric arc versions that can run on zero-carbon electricity.
- Tata Steel’s chief financial officer said that the deal would see the company replace its current coal-based operations with a single electric-arc furnace having a capacity to manufacture three million tons of steel a year.
- However, the mega deal has cast a shadow on 3,000 jobs at the steel plant. UK’s Department for Business and Trade said the money would help finance a new electric arc furnace, safeguarding 5,000 of the more than 8,000 jobs, A news agency reported.
- The head of TUC umbrella body of trade union, told the news agency that the uncertainty over jobs was the opposite of a just transition
- Britain’s steel industry directly employs 39,800 people according to figures released by UK Steel in May, and supports a further 50,000 jobs in the supply chain, a news agency report stated.
UK Business and Trade Secretary Kemi Badenoch said that this is a “historic” package of support from the government. “It will not only protect skilled jobs in Wales but also grow the UK economy, boost growth and help ensure a successful UK steel industry,” she added.
British Finance Minister Jeremy Hunt said that the proposal is a “landmark moment” for maintaining ongoing UK steel production, supporting sustainable economic growth, cutting emissions, and creating green jobs.
Commenting on the announcement, Tata Group Chairman N Chandrasekaran said that the agreement with the UK government is a “defining moment” for the future of the steel industry. The proposed investment will preserve significant employment and presents a great opportunity for the development of a green technology-based industrial ecosystem in South Wales, he added.
(With inputs from agencies)