The Government will pump up to £500 million into Britain’s biggest steelworks as part of plans to produce “greener” steel – but as many as 3,000 workers are set to lose their jobs.
Tata, the Indian conglomerate owner of the Port Talbot steelworks in South Wales, will use the funding to help switch the plant’s two coal-fired blast furnaces to electric arc versions which can run on zero-carbon electricity.
The firm, which employs around 8,000 people across the UK, will also invest about £750 million in the project.
But the company said on Friday the plans will lead to consultations over a “deep potential restructuring”.
In a separate statement, the department for business and trade said the deal will only safeguard around 5,000 jobs out of Tata’s total workforce.
Union leaders have expressed their anger at being shut out of talks between Tata and the Government and described the deal as a “disgrace”.
The £1.25 billion furnaces are expected to be up and running within three years of getting regulatory and planning approvals.
Tata said last year its UK operations were under threat unless it secured Government funding to help it move to less carbon-intensive electric arc furnaces.
The deal also comes two months after parent firm Tata Group confirmed plans to build a £4 billion battery factory in the UK after also getting subsidies from the UK Government.
On Friday, Tata said the fresh plans lay out a future for sustainable steel-making in the area.
Tata Steel’s chief executive and managing director, TV Narendran, said: “We will undertake a meaningful consultation with the unions on the proposed transition pathway in the context of future risk and opportunities for Tata Steel UK.
“With the support of the UK Government and dedicated efforts of the employees of Tata Steel UK along with all stakeholders, we will work to transform Tata Steel UK into a green, modern, future-ready business.”
The Government said replacing the existing coal-powered blast furnaces at the Port Talbot site will “reduce the UK’s entire carbon emissions by around 1.5%”.
Business Secretary Kemi Badenoch said: “The UK Government is backing our steel sector and this proposal will secure a sustainable future for Welsh steel and is expected to save thousands of jobs in the long term.
“This is an historic package of support from the UK Government and will not only protect skilled jobs in Wales but also grow the UK economy, boost growth and help ensure a successful UK steel industry.”
But union bosses and rival politicians heavily criticised the announcement.
Unite general secretary Sharon Graham said: “These plans are disgraceful, short-sighted and lack ambition.
“Unite will be fighting tooth and nail not only to save these jobs but to create more jobs in steel.”
Gary Smith, GMB general secretary, said: “The jobs of thousands of steelworkers are now at risk. The cost to local people and the wider Port Talbot community will be immense.
“Once again, we have the spectacle of leaders talking up the fantasy land of a ‘just transition’ while the bitter reality for workers is them getting the sack.”
Plaid Cymru members for South Wales West, Luke Fletcher and Sioned Williams, said: “The potential job losses at Tata’s Port Talbot plant will have a devastating impact not only on the people of Port Talbot and its neighbouring communities but on the local and national economy.
“Our solidarity is with the workers at this time and we stand ready to support those who need it.”
