Tata Steel announced on Friday its decision to shut down its two blast furnaces in Britain, a move that will result in the loss of up to 2,800 jobs at its Port Talbot steelworks in Wales.
This strategic move is part of Tata Steel’s broader plan to revitalize its UK steelmaking business, which has been facing financial challenges. The company aims to transition to lower carbon electric arc furnaces, a proposal supported by a government investment of £500 million ($634.10 million).
Approximately 2,500 roles are expected to be eliminated within the next 18 months, impacting a total of 2,800 jobs. Tata Steel will initiate a consultation process as part of its restructuring efforts, with a focus on maximizing voluntary redundancies.
T V Narendran, Tata Steel’s Chief Executive, acknowledged the difficulty of the decision but emphasized its necessity for building a sustainable business in the UK for the long term. The company, which currently employs over 8,000 people in the UK, had previously warned of potential redundancies when the government announced its funding package in September to safeguard 5,000 jobs.
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Trade unions Community, Unite, and GMB issued a joint statement rejecting Tata Steel’s plan and announced their intention to consult members on potential next steps, including the possibility of industrial action.
The shift to electric arc furnaces, which require fewer workers compared to blast furnaces, comes as a significant blow to the affected area, where Tata Steel serves as a major employer. In response to the job losses, Tata Steel has committed to providing a £130 million support package to aid affected employees in retraining and finding new employment opportunities.
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The move towards electric steelmaking is anticipated to reduce Britain’s carbon emissions by 1.5%, as Port Talbot’s coal-fired plant currently stands as the country’s largest single carbon emitter.
While Britain’s financial support for Tata Steel is seen as vital in securing the future of the nation’s steel industry, critics argue that the industry’s reliance on electric arc furnaces, which primarily use recycled scrap steel, could lead to a significant reduction in overall steel production. Additionally, concerns have been raised about potential job losses at other steel plants, such as China-owned British Steel, which is also exploring cleaner manufacturing options and faces the possibility of up to 2,000 redundancies.