Tata Steel Confirms Plans for Profitability at Port Talbot Steelworks, Regardless of Next Government
Tata Steel, an India-based firm, has announced its determination to move forward with its plans to restore profitability at its Port Talbot steelworks, regardless of which political party comes into power in the upcoming election. This statement was made in response to recent reports suggesting that the Labour party was seeking to persuade the company to reverse its decision at the UK’s largest steelworks if it wins the election on July 4th.
In April, Tata confirmed that approximately 2,800 jobs would be affected during the transition from traditional “virgin steel” production to more environmentally friendly methods. This plan includes the switch from labor-intensive blast furnaces to cleaner electric arc technology, which will require a £1.25 billion investment. The government has also pledged a £500 million support package to assist with the transition and support the local community that relies on the Port Talbot site for employment.
Tata has emphasized that the long-term future of steelmaking at Port Talbot is at “significant risk” if this grant is withdrawn. As unions continue to consider potential industrial action, the company has stated, “We urge and request the current and incoming government to uphold and safeguard the agreed terms of the £500 million support package for the Electric Arc Furnace (EAF) project, announced in September 2023. This project is crucial in ensuring the production of low-emission, high-quality steel in Port Talbot, preserving primary steelmaking in Britain, and creating the potential for a future green manufacturing cluster in South Wales.”
Tata has also clarified that its current heavy end assets at Port Talbot are nearing the end of their operational life, are financially unsustainable, and pose a safety risk. This has led to the decision to decommission Blast Furnace #5 by the end of June, followed by Blast Furnace #4 by the end of September. The company has reported financial losses of £1 million per day as a result of these assets.
Senior Labour figures, including shadow Welsh secretary Jo Stevens, have visited the Port Talbot plant and urged Tata to hold off on shutting down the blast furnaces until after the election, so that fresh talks can take place. Stevens has called for Tata to consider a union plan to keep one furnace operational while transitioning to green steel production. “We want them to look at the union plan again, we want to talk to them,” she stated. “They know that we have our green steel fund ready to go. That will be there to support Welsh steelworkers and steelworkers across the United Kingdom to ensure a smooth transition to decarbonized steel.”
Assistant General Secretary at the Community union, Alasdair McDiarmid, has also urged the company to refrain from making any irreversible decisions before the election. “Again, we urge the company to engage with Labour and the unions to consider alternatives to protect jobs,” he said. Tata’s relationship with the Community, Unite, and GMB unions has become strained, as each has secured support for potential industrial action, including strikes in the future. Unite members are due to begin an overtime ban and “work to rule” in a week’s time.
