• Tuesday, March 05, 2024

Business

Additional state funding may see Tata Steel investing more in UK plant

The UK government has already agreed to a £500 million package to support the loss-making plant which was facing shutdown over high carbon emission.

(L-R) TV Narendran, managing director of Tata Steel, leaves Portcullis House after testifying at the Welsh Affairs Committee regarding Tata’s decision to close two blast furnaces at Port Talbot steelworks, on January 31, 2024 in London, England (Photo by Carl Court/Getty Images) and a general view of the Tata Steel site in Port Talbot, Wales. (Photo by Matthew Horwood/Getty Images)

By: Shubham Ghosh

TATA Steel’s managing director T V Narendran on Wednesday (31) expressed openness to further investments in the Port Talbot plant in the UK, contingent on additional government funding. The UK government has already allocated a £500 million package to support the struggling steel plant, which employs approximately 8,000 individuals and was at risk of closure due to high carbon emissions.

Under the restructuring plan backed by government funding, Tata Steel intends to replace blast furnaces with electric furnaces to utilise recycled steel, reducing carbon emissions. However, the transition is expected to result in the loss of 2,800 jobs as electric furnaces require less manpower.

Narendran emphasized before the Welsh Affairs Committee of the House of Commons that electric arc furnaces mark the beginning of a greener steel-making process and need not be the end. He told the committee on Wednesday that “if there is funding available” for greener ways of making steel, Tata would discuss it.

Read: Tata Steel to shut down UK blast furnaces, up to 2,800 job losses expected

Tata Steel currently faces daily losses of around £1 million in its Port Talbot operations. Keeping a blast furnace operational and producing steel from scratch would incur a further £600 million loss.

Labour MP Stephen Kinnock questioned Tata Steel’s approach, accusing Tata Steel of bluffing when it persuaded UK ministers to pay £500 million towards its future plans.

Read: Tata Steel CEO TV Narendran sets 3-year target for UK plant’s decarbonisation

“I put it to you that when you threatened the British government, which it sounds like you did, you would close completely. I don’t actually believe that was the case. If that is correct… then it was not a choice between total closure and 8,000 job losses. It was a choice between your plan and the multi-union plan which would have actually saved 2,500 jobs,” he said. 

(With PTI inputs)

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