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

Tata Steel announced on Friday (19), the closure of its two blast furnaces in Britain by the end of this year, potentially leading to the loss of up to 2,800 jobs at its steelworks plant in Wales.

The closures are part of India-owned Tata Steel's plan to turn around its loss-making UK steelmaking business by switching to lower carbon electric arc furnaces, a proposal backed by 500 million pounds of government money.

Tata Steel said it would start a consultation process as part of its restructuring plan. It said that about 2,500 roles were likely to be impacted in the next 18 months, with 2,800 jobs affected overall and it would try to maximise voluntary redundancies.

"The course we are putting forward is difficult, but we believe it is the right one," Tata Steel Chief Executive T V Narendran said.

"We must transform at pace to build a sustainable business in the UK for the long-term."

This plan is intended to reverse more than a decade of losses and transition from the legacy blast furnaces to a more sustainable, green steel business, a press release from Tata Steel said.

The transformation aims to preserve most of Tata Steel UK’s current product capabilities, ensuring the nation's self-sufficiency in steelmaking.

Additionally, it is anticipated to reduce Tata Steel UK’s CO2 emissions by 5 million tonnes annually, contributing to an overall reduction of approximately 1.5% in UK country emissions.

Tata Steel employs more than 8,000 people in the UK, but the warning that as many as 3,000 of those jobs could go came in September when the government announced a funding package to help safeguard 5,000 jobs.

The electric arc furnaces are operated by fewer workers compared to the blast furnaces.

Tata Steel has initiated engineering design work and construction planning for the proposed Electric Arc Furnace, aiming for completion in 2027.

The furnace is envisioned to be among the most advanced globally. Ongoing discussions with National Grid are underway for enabling infrastructure, and engagements with local authorities and regulators have commenced.

As part of the transformation plan, Tata Steel is set to invest £1.25 billion in Electric Arc Furnace technology in Port Talbot and upgrade assets to ensure sustainable, high-quality production at the UK's largest steelmaker.

The Government has pledged up to £500 million to support the transformation, with Tata Steel contributing £750 million to the project.

Additional funding will be allocated for an extensive support package covering affected employees, business restructuring, and transition costs, reaffirming Tata Steel's long-term commitment to UK production.

(With inputs from Reuters)