Several media reports have emerged stating that Tata Steel is exploring plans to close down its blast furnaces at its Port Talbot steelworks in Wales and replace them with electric arc furnaces in its strategy to acquire millions of pounds via a UK government coronavirus bailout fund.
According to The Sunday Times, the Indian steel giant and company, Tata Motors owned Jaguar Land Rover (JLR), are trying to obtain state support via the Project Birch fund, which was set up to help big, strategically important companies that have been shattered by the Covid-19 pandemic. Under this apparent proposal, the state would invest alongside the company, with the conversion of the furnaces starting in 2025. But it appears that the workforce and the Union is caught unaware of this proposal.
In a statement to The Times, Steelworkers’ union Community said, “If this report is accurate then this plan has been developed without any consultation with the workforce, which is an absolute disgrace.”
These reports have fuelled fears of job losses at a time of mass unemployment in the UK and re-structuring of the economy. One Port Talbot unit employs about 3,500 people and is one of the two in Britain capable of turning iron ore and coal into molten iron and steel. Addressing fears of mass unemployment, Labour MP Stephen Kinnock, in a statement to the BBC said,
"They should not be making those kinds of proposals without discussing this first with the workforce and the trade unions," he said.
"What I would also say is the blast furnaces at the Port Talbot steelworks are an absolutely vital part of primary steel making in Wales and in the UK, and if you don't have those blast furnaces you're not able - with an electric arc furnace model - to produce anything like the same quality and variations of steel.
"So, this proposal raises massive questions and the future of the industry - thousands and thousands of jobs are on the line."
Ministers have placed stringent conditions on Project Birch cash, including demanding that it helps achieve its target of net-zero carbon emissions by 2050 and that jobs are not lost. It takes about two years to build an electric arc furnace and they require fewer workers and produce far lower carbon emissions. However, according to the Tata Steel Europe Group spokesperson,
"We are in active discussions with the UK government on several options for the future of our UK operations, including potential co-operation and participation from the government to create a sustainable decarbonised footprint for the future.
"Discussions with the government are constructive and ongoing, and at this stage no decisions have been made.
"It would therefore be inappropriate to comment on unsubstantiated speculation about the outcome of these discussions or the potential impact of any changes to secure our sustainable long-term future.”
