Tata Steel rejects Labor plea for green transition at Port Talbot | Economic news

The company is firing a warning shot that the long-term future of steel production at Port Talbot would be put at risk if the next government decides to force a U-turn on the closure of its remaining blast furnaces.

By James Sillars, economic journalist @SkyNewsBiz

Tuesday June 11, 2024 1:22 p.m., United Kingdom

Tata Steel says it will continue with plans to restore profitability at its Port Talbot steelworks, regardless of the next government.

The India-based company was responding to media reports that Labor hoped to make a U-turn at the UK’s largest steelworks if it wins on July 4.

Tata confirmed in April almost 2,800 roles would be eliminated as part of a transition from so-called virgin steel to greener steel.

The two labour-intensive blast furnaces would be turned off by September and soon replaced with cleaner electric arc technology as part of a £1.25 billion investment.

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It contains a £500 million support package from the Government to support the transition and the wider local community who currently rely on the sprawling South Wales site for employment.

Tata said the long-term future of steel production at Port Talbot would be put at risk if the subsidy was withdrawn.

As unions continue to prepare industrial action plans, the company said: “We wish to advise that (Tata Steel) confirms that it will continue with the announced heavy asset closure and restructuring program at Port Talbot in the months to come.

“We urge and call on the current and incoming post-election government to adhere to and safeguard the agreed terms of the £500 million support package for the Electric Arc Furnace (EAF) project announced in September 2023.

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“This project has been developed to ensure the production of high quality, low emission steel at Port Talbot, preserving primary steel production in Britain and creating the potential for a future green manufacturing cluster in the South Wales.

“Port Talbot’s current heavy assets are nearing the end of their useful life, are operationally unstable and are causing unsustainable financial losses.

“The Coke Ovens, a critical facility for primary steel production, had to be closed in March 2024 as operations became impractical and unsafe.

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“Therefore, the company is obliged to continue its plans to decommission Blast Furnace No. 5 at the end of June, followed by decommissioning Blast Furnace No. 4 by the end of September.”

Tata estimates its financial losses at £1 million a day.

On Monday, senior Labor figures, including Welsh shadow secretary Jo Stevens, urged Tata to wait until a possible Labor government is formed next month so further negotiations can take place.

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During a visit to the Port Talbot plant, Ms Stevens called on the company to delay the shutdown of all blast furnaces and urged Tata to adopt a union plan to keep one furnace burning during the transition to green steel production.

“What we have told Tata from the beginning is not to make any irreversible decision before the general election,” she said.

“We want them to look at the union plan again, we want to talk to them. They know our green steel fund is ready to go. It will be there to support Welsh steelworkers and steelworkers across the UK to ensure a smooth transition to carbon-free steel.

Alasdair McDiarmid, deputy general secretary of the community union, said: “It would be a mistake for Tata to make irreversible decisions before the election.

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“Once again we urge the company to engage with Labor and unions to consider alternatives to protect jobs.”

Tata’s relations with the Community, Unite and GMB unions are strained as each has gained support for industrial action which could lead to strikes in the future.

Unite members are expected to start banning overtime and “work to rule” within a week.