Thousands of job losses expected despite £500m Government investment in steelworks

The construction of new electric arc furnaces (EAFs) to replace the two blast furnaces at the site means a less labour-intensive means of producing steel, which is also dependent on scrap steel and potentially imported virgin steel.

Half of Tata’s 8,000 strong workforce is employed in Port Talbot, and it’s expected the news will lead to 3,000 job losses across the group’s UK sites.

Trostre steelworks, fifteen miles away in Llanelli, employs 700 people in manufacturing tinplate that’s used in food and drinks cans, aerosols and paint tins. It uses substrate material from Port Talbot as a raw material that isn’t produced by EAFs.

Chairman of Tata Group Natarajan Chandrasekaran said it will “preserve significant employment”.

Aberavon MP Stephen Kinnock, whose constituency includes Port Talbot, criticised the Government for “failing to deliver the just transition to green steel”. Adding further criticism for the Government’s failure to consult with steelworkers’ unions before making the announcement.

Roy Rickhuss, General Secretary of the union Community shared concerns that a total conversion to EAFs was “short sighted”, and that it would make the UK “extremely exposed to the price and availability of steel scrap… making British steelmaking reliant on imports of virgin steel and steel in imported goods.”

Gary Smith, GMB General Secretary, said: “This deal will have devastating consequences for jobs and workers. It will rip the heart out of the Port Talbot community.”

The Government had offered a £300m package each to Tata Steel and to Chinese-owned British Steel at the start of the year, although discussions appear to have stalled.

The Yorkshire Post understands a new subsidy offer will be made to British Steel, who employ 3,000 people at their Scunthorpe works, at some point before the end of the year.

Around 400 people are currently employed at British Steel’s beam mill on Teesside. Chinese company Jingye pledged to develop an EAF at the site upon their purchase of British Steel in 2020, although it isn’t clear when this will happen.

The Welsh Government’s economy minister, Vaughan Gething, criticised his Westminster counterpart Kemi Badenoch for a “lack of dialogue” concerning the Port Talbot deal. In a letter to the UK Business Secretary he outlined his “disappointment” in not being consulted, despite first requesting a meeting after she took her role in February.

“I have always seen the future of Tata not in isolation,” he wrote, “but rather as sitting within a much broader effort to support industry to develop our manufacturing base across Wales in the vital transition to net zero.”

Luke Murphy of think tank IPPR described the Government’s transition to green steel as “a race the UK is losing”.

“Germany has invested over $35bn in decarbonising heavy industry,” he said. “The UK has nothing like this scale of commitment and has done nothing to make conditions favourable for investment, like tackling very high energy prices for industrial consumers.

"The UK needs a Green Industrial Strategy with jobs and workers at its heart."