by Tata Steel said on Friday it planned to close the blast furnaces at Britain’s largest steelworks, in Port Talbot, Wales, and replace them with an electric furnace, a move that would reduce carbon emissions but could cost 2,800 jobs.
The company, part of the India-based Tata conglomerate, says the steel mill, much of which dates back to the 1950s, has frequently lost money.
“The path we are considering is difficult, but we believe it is the right one,” the company’s CEO, TV Narendran, said in a statement. “We must rapidly transform to build a sustainable business in the UK for the long term.” He said Tata had invested almost 5 billion pounds (about $6 billion) in the British business since 2007, when Tata bought the factory.
Last year, the British government offered £500 million in support for Tata’s plan, which has an estimated price tag of up to £1.25 billion.
Although the announcement did not come as a surprise, unions representing workers at the plant said they were angry that their proposals to save jobs had been rejected. The plant, one of Britain’s two remaining large steelworks, employs about 4,000 people, and it was unclear how many of the job cuts would come in Port Talbot; Tata employs around 8,000 people in Britain.
“It is an absolute disgrace that Tata Steel and the UK government seem determined to follow the cheapest plan rather than the best for our industry, our steelworkers and our country,” two unions, Community and GMB, said in a statement.
Tata wants to replace much of the current operation, which uses coal to extract iron from ore, with an electric furnace that makes steel by melting scrap metal in a flare of sparks. Electrical steel manufacturing, which is more common in the United States than in Europe, tends to employ fewer workers.
Tata says the change would ensure steel production continued at the site while reducing greenhouse gas emissions at the plant by 85 percent and Britain’s total emissions by 1.5 percent. Britain aims to reach net zero carbon emissions by 2050.
Unions expressed skepticism that an electric furnace would be capable of producing metal of sufficient quality for some demanding applications, including automobile body panels and food and beverage cans.
But what is largely at issue is the timing of the move. In November, the unions, with the help of consulting firm Syndex, made a counterproposal to Tata that involved keeping one of the two blast furnaces open until 2032. They also proposed that Tata build a smaller-than-planned electric furnace, as well as a device called Direct Reduction Plant, which produces raw iron through a cleaner process than a blast furnace. That iron could have been used to make higher quality metal.
Unions said this plan would have prevented forced layoffs.
Tata, however, has decided to move more quickly, much to the disappointment of employees.
The company said it would close one blast furnace by the middle of this year and much of the rest of the plant before the end of the year. Tata also said it would embark on a “broader restructuring of other locations.”
Tata said it would supply its British processing plants with semi-finished steel from India and the Netherlands until the new furnace was installed, leading some critics to say Britain will simply import steel made with high carbon emissions elsewhere. places. The only other large steelworks left in Britain is at Scunthorpe in the east of England.
“We all understand that we have to get to a green industry, but this cannot be achieved in a matter of months,” said Barrie Evans, a steel mill employee and community union leader. “This is right on the edge of the cliff.”
Although Tata proposes spending £130 million to support employees who lose their jobs, some analysts say there has not been enough investment to prepare the community of Port Talbot, a coastal area near Swansea, for the changes.
“The net zero transition and the green economy will seem like a cost to them rather than an opportunity,” said Joe Rossiter, policy director at the Institute of Welsh Affairs, a Cardiff-based research organization, speaking of the city’s residents. of 35,000 and the wider area.
Surprisingly, some environmentalists criticized the plans despite the likely emissions reductions. “The UK government’s lack of a forward-looking industrial strategy has left workers destitute,” said Friends of the Earth, an advocacy group.
