Construction has begun on Tata Steel’s £1.25bn electric arc furnace (EAF) in Port Talbot, marking a major milestone in Wales’ industrial transformation—but it comes with the loss of more than 2,800 jobs and the end of traditional steelmaking in the town.
Business Secretary Jonathan Reynolds, Welsh Secretary Jo Stevens, and Tata Group Chairman Natarajan Chandrasekaran formally broke ground at the steelworks site on Monday (14 July), signalling the start of a project designed to cut carbon emissions by 90% and shift production toward recycled scrap steel.
The UK Government has committed £500 million toward the EAF, describing it as “a major win” for Welsh steelmaking that secures 5,000 jobs nationwide. The new furnace will replace the site’s two blast furnaces—shut down in September 2024—ending a century of primary steelmaking in Wales.
‘Bitter sweet’ day for steelworkers and families
The announcement has been widely described as bittersweet. While Tata and ministers hailed the start of a cleaner, greener future, union representatives and local leaders stressed the impact of the redundancies and the uncertainty still facing thousands of workers.
Assistant General Secretary Alasdair McDiarmid of Community Union said:
“This bittersweet day is a consequence of the devastating closure of the blast furnaces, but importantly a future for Port Talbot steelmaking is being secured.
The workforce needs the electric arc furnace project to be both a success and a turning point… Going forward we must see further investment to develop and grow the business, both here in Port Talbot and across all the crucial downstream sites.”
Speaking ahead of the groundbreaking, First Minister Eluned Morgan said the construction phase represents “a tangible sign” of Tata’s commitment, adding that the Welsh Government is working with partners to support affected workers and promote economic resilience.
Former steelworker Graham Rowland said:
“I’ve seen good boys lose their jobs… This industry kept this town alive. It’s the heart and soul of the place. If anywhere can make that arc work, it’s Port Talbot. The knowledge, the grit, the people—it’s all here. We just need the right support.”
EAF: cleaner steel, fewer emissions—but far fewer jobs
Tata Steel says the new furnace is essential to achieving climate targets and creating “a financially and environmentally sustainable future.” The company has reported losses of £4bn in Port Talbot since 2007.
Chairman Natarajan Chandrasekaran said:
“This is a proud day for the Tata Group, Tata Steel and for the UK. At Port Talbot we are building the foundations of a cleaner, greener future—supporting jobs, driving innovation and demonstrating our commitment to responsible industry leadership.”
The new furnace will be built on the site of the Basic Oxygen Steelmaking (BOS) plant and is set to be one of the largest of its kind globally, capable of producing up to three million tonnes of steel per year. Contractor Sir Robert McAlpine has been appointed to deliver the build, which will also include a new scrap processing plant.
Operations are expected to begin in late 2027. In the meantime, Port Talbot will continue to roll imported steel slabs through its hot strip mill and finishing lines.
Supporting workers through the transition
Neath Port Talbot Council and the Tata Steel / Port Talbot Transition Board have pledged over £100 million to support workers, businesses and community recovery. This includes:
- A £19.8 million Employment and Skills Fund
- A £21.2 million investment in Harbourside manufacturing and skills facilities
- A £13 million business start-up and resilience programme
- Additional community grants targeting financial hardship, mental health and career retraining
A recent survey by Public Health Wales found that 74% of local households expect to face financial pressure in the coming months, with food, energy, and housing cited as key concerns.
Council Leader Cllr Steve Hunt said:
“On behalf of the Transition Board, Neath Port Talbot Council is delivering targeted support to people and businesses both within Neath Port Talbot and further afield.”
Looking ahead
While the shift to EAF production represents a landmark shift in Welsh industry, many argue the transformation must be judged not just by its carbon savings, but by the long-term outcomes for workers, communities and supply chains.
Luke Fletcher MS, Economy spokesperson for Plaid Cymru and Senedd Member for South Wales West, said the start of construction is “welcome,” but warned that “the opportunity has been lost to safeguard over 2,000 primary steelmaking jobs.”
“Labour has promised a lot to the communities in and around Port Talbot,” he said, “it’s vital that those promises are realised now.”
Swansea Bay News will continue to follow developments across Port Talbot and the steel sector as this historic transition unfolds.
