Tata Steel had been in negotiations with trade unions in the UK over proposals to close the blast furnaces at its plant at Port Talbot in Wales as a part of its push towards green steel making. These plans have got a big boost with the UK's Labour government signing a GBP 500 million grant funding agreement with the Tata Group company.
This agreement will allow the company to proceed at pace with the project to install a state-of-the-art electric arc furnace (EAF) at the Port Talbot steelworks, Tata Steel said on Wednesday.
There had been several rounds of negotiations between the company and the trade unions over the plans to close the blast furnaces. A section of the workers there had threatened to go on indefinite strike from July 8 against the move, although the strike action was eventually suspended.
Building the electric arc furnace will require an investment of GBP 1.25 billion investment. Apart from the GBP 500 million grant funding from the UK government, Tata Steel will put in GBP 750 million. The company has maintained the project will safeguard UK steel's sovereignty, secure steel making at Port Talbot and preserve 5,000 jobs.
"With the UK government’s critical support, this complex and ambitious transformation of Port Talbot has the potential to make the plant one of Europe’s premier centres for green steelmaking. We now look forward to the efficient and speedy execution of the EAF project," TV Narendran, the CEO and MD of Tata Steel said.
The company said basic engineering is complete, and equipment orders will be placed shortly for the electric arc furnace and ladle metallurgy furnaces, among other things and for construction management and civil engineering.
"Tata Steel has already launched public consultation on specific activities and is working closely with the authorities to apply for planning approvals by November 2024, with a view to commencing large scale site work around July 2025," it said. The EAF is expected to be operational within three years.
It further added that plans are progressing to close blast Furnace 4 and the wider heavy-end operations at Port Talbot by the end of September, with supply chain arrangements in place to serve customers through the transition period until the EAF is commissioned.
Tata Steel said that it has finalised a memorandum of understanding with the UK Steel Committee following extensive discussions with employee representatives.
"Tata Steel is offering its most generous-ever support package to employees leaving the company, and a comprehensive voluntary redundancy aspiration process combined with cross-matching and/or re-skilling," it claimed.
The labour union Unite has also welcomed today's agreement stating the government's commitment to provide serious funding for steel in South Wales is vital for local communities and the long-term future of the steel industry.
But, it also stressed that it was now "imperative" on Tata to bring forward second stage proposals to develop increased steel capacity at its sites in South Wales. The union said it was in talks with the government and Tata Steel to create new jobs.
