- Tuesday, February 25, 2025
The initiative aims to shift from traditional blast furnaces to a more ecologically sustainable and green steel business model.
By: Shubham Ghosh
TATA Steel on Friday (19) revealed its initiation of statutory consultation as a crucial step in its strategy to revitalise and reorganise its UK operations. The initiative aims to overturn over a decade of financial setbacks and shift from traditional blast furnaces to a more ecologically sustainable and green steel business model.
The proposed transformation seeks to preserve the majority of Tata Steel UK’s current product capabilities, ensuring the nation’s autonomy in steel production. Additionally, it aims to decrease Tata Steel UK’s CO2 emissions by 5 million tonnes annually, contributing to an overall reduction of approximately 1.5 per cent in the UK’s countrywide emissions.
The plans follow detailed talks with the UK multi-trade union representative body (UK Steel Committee) and its advisors, in which Tata Steel carefully considered their endorsed proposal for maintaining a single blast furnace. Having considered that proposal, Tata Steel has agreed to adopt elements of it, but considers that continued blast furnace production is neither feasible nor affordable.
Tata Steel will now commence statutory consultation on the proposed restructuring plan and support arrangements for affected employees. Up to 2,800 employees are expected to be potentially affected, out of which around 2,500 roles would be impacted over the next year and half.
Read: Tata Steel to cut 3,000 jobs in Wales: source
The company will endeavour to maximise voluntary redundancies and proposes to commit in excess of £130 million to a comprehensive support package for affected employees, including redundancy terms, community programmes, skills training and job-seeking initiatives. This is in addition to the £100 million funding for the Transition Board set up with UK and Welsh governments to support affected employees, contractors and communities.
Read: Tata Steel CEO TV Narendran sets 3-year target for UK plant’s decarbonisation
Port Talbot’s two high-emission blast furnaces and coke ovens would close in a phased manner with the first blast furnace closing around mid-2024 and the remaining heavy end assets would wind down during the second half of 2024. The proposal also includes a wider restructuring of other locations and functions across the company, including the intended closure of the Continuous Annealing Processing Line (CAPL) in March 2025.
In discussion with the UK Steel Committee, Tata Steel has agreed that it would continue to operate the hot strip mill through the proposed transition period and in future. In addition, the downstream and steel processing centres would continue to serve customers by utilising imported semi-finished steel from Tata Steel plants in the Netherlands and India as well as other select strategic suppliers.
Under the transformation plan, Tata Steel will embark on a £1.25 billion investment in Electric Arc Furnace technology in Port Talbot and asset upgrades to secure long-term, high-quality production at the UK’s largest steelmaker.
The proposed investment is supported by the UK Government, which has committed up to £500 million to enable the transformation. Tata Steel plans to invest £750 million in the project, alongside funding for a comprehensive support package for affected employees, business restructuring and transition costs as part of its long-term commitment to UK production.
Tata Steel has engaged in several months of detailed discussions with the UK Steel Committee and its advisors, which examined feasibility studies and financial analysis of the long-term viability of steelmaking at Port Talbot.
T V Narendran, Tata Steel’s chief executive officer and managing director, said, “The course we are putting forward is difficult, but we believe it is the right one. Having invested almost £5 billion¹ in the UK business since 2007, we must transform at pace to build a sustainable business in the UK for the long-term. Our ambitious plan includes the largest capital expenditure in UK steel production in more than a decade, guaranteeing long-term, high-quality steel production in the UK and transforming the Port Talbot facility into one of Europe’s premier centres for green steelmaking.
“We recognise this proposed restructuring would have a major impact on the individuals and communities concerned, whom we will support with dignity and respect. In consultation with our union partners, Tata Steel will offer a comprehensive support package to mitigate the impact of any anticipated job losses, including helping employees to retrain and find new jobs. We will continue our work with the UK and Welsh governments, trade unions and the community to help those who may be affected through the proposed transition.”
Following Friday’s announcement, the company will kick off a formal information sharing and consultation process with employees and their representatives on the proposals.
