Tata Steel confirms plans to close blast furnaces at Port Talbot plant

Tata Steel has confirmed plans to close blast furnaces at its plant in Port Talbot, with the loss of more than 3,000 jobs.

About 2,800 jobs will go over the next 18 months, with a further 300 to be lost.

Tata said in a statement: “Tata Steel today announced it will commence statutory consultation as part of its plan to transform and restructure its UK business.

“This plan is intended to reverse more than a decade of losses and transition from the legacy blast furnaces to a more sustainable, green steel business.

“The transformation would secure most of Tata Steel UK’s existing product capability and maintain the country’s self-sufficiency in steelmaking, while also reducing Tata Steel UK’s CO2 emissions by five million tonnes per year and overall UK country emissions by about 1.5%.”

Phased closure

Under the plans, Port Talbot’s two high-emission blast furnaces and coke ovens will close in a phased manner, with the first blast furnace closing about mid-2024 and the remaining heavy end assets winding down during the second half of this year.

The proposal also includes a wider restructuring of other locations and functions across the company, including the intended closure of its continuous annealing processing line (CAPL) in March 2025.

After talks with unions, Tata said it has agreed to continue to operate Port Talbot’s hot strip mill through the proposed transition period and in future.

Tata Steel said it will embark on a £1.25 billion investment in electric arc furnace technology in Port Talbot and asset upgrades, to secure long-term, high-quality production.

The proposed investment is supported by the UK Government, which has committed up to £500 million to enable the transformation.

Tata Steel plans to invest £750 million in the project, alongside funding for a “comprehensive support package” for affected employees, business restructuring and transition costs, as part of its long-term commitment to UK production.

Tata said its plans are subject to consultation but could be expected to result in up to 2,800 potential job losses across the business, out of which about 2,500 roles could be affected during the next 18 months.

Tata Steel expects that a further 300 roles could be affected in three years, which could include the potential consolidation and rationalisation of cold rolling assets in Llanwern once the required investments are completed at Port Talbot.

Uncertain future

Vaughan Gething, the Welsh government’s Minister for Economy said: “Today’s announcement leaves thousands of workers and their families, in Tata Steel and across the wider supply chain, facing an uncertain future.

“The Welsh Government has worked closely with Tata and the recognised steel trades unions for many years to safeguard these vital jobs and the long-term future of steel production in Wales.

“Steel is one of the most important materials in any modern economy and Wales and the rest of the UK are better off and more secure with significant, sovereign steelmaking capabilities.

“The scale of the operation at Port Talbot brings together a vibrant mix of cutting-edge skills and specialisms that ought to be understood, promoted and respected at every level of government.

“The workforce boasts the skills, experience and know-how to unlock an ambitious green transition that exploits new technologies and the enormous demand a low carbon economy will command. In choosing not to pursue a modern industrial strategy with steel at its core, the UK Government has damaged our ability to create the long term, reliable growth that would turn net zero measures into more sustainable, green jobs in Wales.

“We have repeatedly urged the UK Government to act at scale with the investment needed to support the move to greener methods of steel production and for the company to lead on a fair and just transition for its workers and those UK companies within its extensive supply chain. Today’s announcement presents a social and economic body-blow with profound and far-reaching implications for Wales. It is our firm view that the Prime Minister and his cabinet do have levers at their disposal that could prevent the worst case scenario and the scale of economic loss we now face.”

Catastrophic

Plaid Cymru’s Economy Spokesperson, Luke Fletcher MS, who is also a Member of the Senedd for South Wales West, which covers Port Talbot, said:“Tata’s decision to push ahead with job losses in south Wales is utterly catastrophic.

“This is going to have a devastating impact on not only the people of Port Talbot and its neighbouring communities but on the local and national economy of Wales.

“Plaid Cymru stands in absolute solidarity with the thousands of workers and their families impacted by today’s announcement.

“Wales is facing the absolute annihilation of the steel industry. The Westminster Government has allowed this key strategic industry to wither on the vine.

“The key question now is whether or not UK Government is happy to lose the ability to produce new steel and become the only country in the G20 unable to produce steel from scratch.

“To safeguard our ability to produce steel from scratch, to protect jobs, the UK Government must now nationalise the plant in Port Talbot.

“Decarbonisation and transitioning to a green economy should not and must not come at the expense of highly skilled, dedicated workers.

“Plaid Cymru believes that Wales’ most important asset is our people and our workforce.

“The Welsh Government’s focus must be on re-training and re-skilling to ensure workers keep their jobs and transition to carbon-neutral steelmaking.

“Welsh Government must also immediately undertake a national skills audit, to truly understand key sectors where reskilling and training is needed to maintain steel making capabilities, and allow a just green transition.”

Devastating news

Paul Davies MS, Chair of the Senedd’s Economy, Trade and Rural Affairs Committee, said: “Tata Steel’s announcement is devastating news for the community of Port Talbot and everyone in Wales who relies on the industry, including those who work at Tata’s downstream sites in Llanwern and Trostre. Our thoughts in the Senedd are with the workers, their families and the wider community.

“We as a Committee are planning to hold an urgent session, calling in Ministers to get to the bottom of unanswered questions and to get assurances on the support available to people affected.

“Last year the Committee spoke to unions about possible job losses in Welsh steel and we heard about the terrible impact it would have on the plant’s workers, their families and their community, as well as the consequences for the wider supply chain.

“We will do all we can to get answers for those affected.”

Wales Green Party leader Anthony Slaughter said: “This is devastating news for the local community and beyond. Wales knows only too well what happens when communities are abandoned by government and industries. We saw it with the coal industry and now it is happening again with the steel industry.

“Decarbonisation of industry is vital, but communities and people’s jobs must be protected. That means putting unions and workers at the heart of a just transition.

“The government has provided Tata with £500 million toward the cost of future steel production. It has a responsibility to ensure that money is used to protect Port Talbot and the wider Wales economy.

“Instead, it is allowing the company to ignore viable alternatives to these job losses put forward by the unions. That is unacceptable and must be resisted.”

Competitive

A UK Government spokesperson said: “We are determined to secure a sustainable and competitive future for the UK steel sector, which is why we have committed £500 million of UK Government support that will transform the site and protect thousands of jobs – both in Port Talbot and throughout the supply chain.

“Engagement with trade unions is rightly a company-led process.

“There is a broad range of support for staff affected, including a dedicated Transition Board backed by £80 million funding from UK Government and £20 million from Tata Steel.

“Chaired by the Welsh Secretary with ministerial representation from the Welsh Government, the Board will support both affected employees and the local economy.”