Tata ‘threaten to close down’ Port Talbot steelworks without £1.5bn of UK Government help to reduce carbon emissions
Tata Group have “threatened to close down” Port Talbot steelworks without £1.5bn of UK Government of subsidies to reduce carbon emissions.
The company, which employs thousands of people in the Port Talbot area, told the Financial Times that they would only be able to continue with the government’s help.
7,890 people are employed by the steelworks in the town of 37,276. The steelworks produced 3.5m tonnes of liquid steel in the year to the end of March.
“A transition to a greener steel plant is the intention that we have . . . But this is only possible with financial help from the government,” Natarajan Chandrasekaran, chair of Tata Group, told the newspaper.
“We have been in discussions over the last two years and we should come to an agreement within 12 months. Without this, we will have to look at closures of sites,” he said.
The UK government said: “Steel plays a critical role in all areas of the UK economy and Tata is a valued steel producer and significant employer in the UK.”
According to the Financial Times, Tata Group would need to build two new electric arc furnaces and decommission the present blast furnaces to cut down on carbon emissions at a cost of £3bn, half of which would need to come from the UK Government.
Port Talbot is one of two sites, alongside the British Steel site at Scunthorpe, where the vast majority of the UK’s steel is made.
Yesterday it was revealed that Tata had made its first pre-tax profit in 13 years thanks to record steel prices and a recovery in demand across Europe as pandemic restrictions eased.
The company reported a pre-tax profit of £82m in the year to the end of March, after recorded an increase in revenues of 58% year on year, from £1.97bn to £3.1bn.
“This improvement is attributable to the recovery of the European steel market from the weakened market conditions caused by Covid-19 pandemic the previous year,” the company said as it announced the results.
But the company also warned that it needed UK Government support in order for its steel business to remain viable.
“TSUK continues to have discussions with the UK government to seek support for the transition to low-carbon steel-making, which is a vital part of securing a long-term sustainable future for the business,” they said.
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