British Steel Seeks State Help for New Furnaces Amidst Job Cut Concerns

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British Steel, the UK’s second-largest steelmaker, is in discussions with the government regarding funding for a transition to cleaner manufacturing methods. The plan involves shutting down blast furnaces and is expected to result in job losses.

As a part of their proposal, British Steel, which is owned by China’s Jingye Group, is aiming to invest £1.25 billion ($1.55 billion) to replace aging blast furnaces with electric arc furnaces at their sites in Scunthorpe and Teesside in northeast England. This shift is intended to reduce carbon emissions and make steel production more environmentally friendly.

However, unions have expressed concerns that this move could lead to the loss of between 1,500 and 2,000 jobs due to the reduced labor requirements of the new facilities. Currently, British Steel employs approximately 3,200 workers.

In a similar effort to secure the future of Tata Steel, the UK’s largest steelmaker, the government had previously injected £500 million into the company. Both Tata Steel and British Steel have cited high energy costs as a challenge to remaining competitive in the market. Therefore, British Steel is seeking a comparable level of government support to ensure its sustainability.

“We remain in talks with the government,” stated British Steel CEO and President Xijun Cao. He further emphasized that the implementation of their proposals is dependent on receiving the “appropriate support” from the government.

The British government has put forward a package worth over £300 million for British Steel, according to the Business and Trade ministry. However, they have refrained from commenting on ongoing negotiations related to commercial decisions.

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Under the previous deal with Tata Steel, the government’s support was supposed to safeguard 5,000 jobs, potentially resulting in redundancies for 3,000 employees out of an 8,000-strong workforce.

British Steel has commenced discussions with trade unions regarding their plans and aims to have the new furnaces operational by late 2025. Meanwhile, the Trades Union Congress (TUC), an umbrella union group, has urged the company to halt its plans and engage in dialogue with the unions. The TUC emphasized that the steel industry in the UK should not be dismantled without considering the consequences for workers.

As talks with the government continue, British Steel is hopeful that they will receive the support needed to proceed with their plans for cleaner and more sustainable steel manufacturing.

For more information, visit Business Today.