Synopsis: Tata Steel is set to end blast furnace-based steelmaking in the UK by September, transitioning to cleaner technologies. This transition, crucial for reducing losses in Europe, hinges on securing a £500 million grant from the new Labour government, which demands job guarantees.
Tata Steel is set to cease blast furnace-based steelmaking in the UK by September 2024, marking a significant transition towards cleaner technologies and an effort to reduce losses in Europe. The company relies heavily on a £500 million (Rs 5,370 crore) grant to facilitate this transition, making alignment with the new Labour government crucial.
T.V. Narendran, Tata Steel's Managing Director, confirmed that operations at one of the blast furnaces (BF #5) at Port Talbot have already ceased, and the company is on schedule to shut down the remaining blast furnace by September. This move is critical for reducing cash burn at its UK operations, according to CFO Koushik Chatterjee.
Tata Steel's transition plan includes shifting to electric arc furnaces, which are less polluting and more cost-effective. The previous Rishi Sunak-led Tory government had agreed to a £500 million grant for this £1.25 billion project. However, with the recent Labour Party victory, the new government insists on job guarantees as part of the funding negotiations.
Jonathan Reynolds, the new business secretary, emphasized the importance of job security in the ongoing discussions. Additionally, Tata Steel is negotiating with the Dutch government for similar decarbonization funding for its operations in the Netherlands.
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