UK Prime Minister Rishi Sunak hailed the announcement of a joint investment package of £1.25 billion by Tata Steel and the UK government to convert the former’s coal-based steel-manufacturing at Port Talbot plant into lower-emission electric arc furnace (EAF). The UK PM said that the deal will save thousands of British jobs and secure the future of the steel industry in Wales. “A big day for UK steel. We’ve agreed a joint £1 billion investment with Tata Steel Ltd to save thousands of British jobs and secure the future of the steel industry in Wales. This follows the £4 billion investment we secured from Tata Companies in July to create 4,000 jobs,” he posted on X (formerly Twitter).
He further said that the deal will not only protect jobs, but will modernise production as well. “This deal will: modernise production, protect thousands of jobs, boost the economy. It’s a testament to the strength of our manufacturing sector, which is now 8th in the world and another huge vote of confidence in the UK,” the post added.
UK Business and Trade Secretary Kemi Badenoch said that this is a ‘historic’ package of support from the government.
UK Finance Minister Jeremy Hunt said that the proposal is a ‘landmark moment’ for the country’s manufacturing sector. “This £1.25bn joint investment with Tata Steel UK is a landmark moment for our manufacturing sector: securing the future of steel in the UK, a key strategic industry, while facilitating the transition to the green, high skill jobs of the future,” Jeremy Hunt posted on X.
According to the terms of the deal, while the UK government will grant up to £500 million, Tata Steel would invest about £700 million from its internal accruals in the steel manufacturing facility coming up at Port Talbot over the next four years. The new electric furnaces will help reduce emissions by 50 million tonnes over a decade. The company is planning to set up a 3-million-tonne EAF at Talbot.
Port Talbot steelworks is the UK’s single biggest carbon emitter, and the government has been looking to replace dirty blast furnaces. “The project is the first major step towards decarbonisation of the UK’s steel industry. This would also bolster that country’s steel security as the facility would leverage domestically available scrap steel,” Tata Steel said in a statement.
Tata Group Chairman N Chandrasekaran said, “The agreement with the UK Government is a defining moment for the future of the steel industry and indeed the industrial value chain in the UK. It has been an absolute pleasure to work with His Majesty’s government and the Honourable Prime Minister Rishi Sunak in developing the proposed transition pathway for the future of sustainable steelmaking in the UK.”
“The proposed investment will preserve significant employment and present a great opportunity for the development of a green technology-based industrial ecosystem in South Wales,” he added.