The job losses are a result of its plan to closes its blast furnace production and construction of new green steel manufacturing methods through a £1.25 billion investment in Electric Arc Furnace technology in Port Talbot and asset upgrades which the steelmaker says will secure long-term, high-quality production.
The proposed investment is supported by the UK Government, which has committed up to £500 million. 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 what it calls its long-term commitment to UK production.
Tata say the plan aims to reverse more than a decade of losses and transition from the legacy blast furnaces to a more sustainable, green steel business.
It adds that the transformation would secure most of Tata Steel UK’s existing product capability and maintain the country’s self-sufficiency in steelmaking, while also reducing Tata Steel UK’s CO2 emissions by 5 million tonnes per year and overall UK country emissions by about 1.5%.
Tata Steel say they expect that a further 300 roles could be impacted in three years, which could include the potential consolidation and rationalisation of cold rolling assets in Llanwern once the required investments are completed 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.”
Subject to consultation, and subsequent to the proposed closure of some of the heavy end assets in Port Talbot, Tata Steel will continue to focus on facilitating wider economic regeneration in the Port Talbot area.
Tata say the proposal to invest in Electric Arc Furnace technology, which would be fed by predominantly UK-produced scrap, follows a comprehensive analysis into all the financial and technological options available.
The company says the transition mirrors the successful installation of such low-carbon production facilities in other major steel producing markets such as the United States, where it has cut emissions whilst guaranteeing production of complex, high quality steel.
Tata say that on completion, the programme would transform the competitiveness of Tata Steel UK, secure most of its capability in terms of end products, whilst cutting its carbon emissions by about 85% and the UK’s overall carbon emissions by about 1.5%. The proposal to use UK-sourced scrap as the raw materials for future steelmaking would also maintain the country’s self-sufficiency as almost all of the raw materials for the current blast furnaces need to be imported.
Following today’s announcement, the company say they will now begin a formal information sharing and consultation process with employees and their representatives on the proposals.
Welsh Government Economy Minister, and Welsh Labour leadership candidate, Vaughan Gething said: “We are in discussion with Tata Steel UK and the recognised trades unions and have approached the UK Government regarding proposals concerning the future of the company’s operations in Wales.
“This is not just an issue for Wales, steel is a sovereign asset and should be treated as such by the UK Government.”
Union, Unite warned that the government needs to take immediate action to preserve large scale steelmaking in the UK.
Unite general secretary Sharon Graham said: “Unite is ready to use everything in its armoury to defend steel workers and our steel industry. We have detailed research demonstrating how and why Tata should be expanding UK steel production in line with growing demand, not slashing its workforce. We have secured funding from a future Labour government that could do this. Tata’s plan to close the blast furnaces is simply industrial vandalism on a grand scale.”
“The government needs to invest in British industry in order to defend workers and communities as well as our industrial base and our national security. Instead, they are giving Tata hundreds of millions of pounds to fund their plan to cut jobs, cut capacity and give more business to their plants in other countries, like India and the Netherlands. How is that acceptable?”
Labour leadership candidate and local Neath MS Jeremy Miles said: “This is an announcement which tears at the heart of our local community, and of the Welsh economy. I really feel for the families who are affected by this news and we will do all we can to support them.
“There is a future for steelmaking in Port Talbot which we must work for, together. I stand with the workforce, and their trade unions, as they oppose this devastating decision.
“The UK Government has proven incapable of taking the action needed to protect jobs in Wales and has continued its dismissive attitude towards the Welsh Government’s attempts find a way through. Both the UK Government and TATA Steel must explore and consider the alternative proposals the unions have put forward.
“Wales and the UK needs a sustainable, strategic steel making capacity for our economic security, our growing infrastructure needs, and for the thousands of good jobs it provides.”
