Tata Steel has confirmed plans to close blast furnaces at its plant in Port Talbot, South Wales, 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%.”
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.
Port Talbot steel cannot be left to close.
UK Government needs to step up and protect this vital industry.
We must not be left dependent on steel imports that would create lower quality products and far more carbon. pic.twitter.com/ozA7rIJRpZ
— GMB Union (@GMB_union) January 19, 2024
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.
Unions reacted with anger to the news and said industrial action was not being ruled out.
A statement by the GMB and Community said: “More than 3,000 jobs and the future of British steelmaking is at stake.
“It is an absolute disgrace that Tata Steel, and the UK Government, appear intent on pursuing the cheapest instead of the best plan for our industry, our steelworkers and our country.
“It’s unbelievable any Government would give a company £500 million to throw 3,000 workers on the scrapheap, and our Government must re-evaluate its miserly offer to support investment at Tata Steel.
"Tata's announcement today is unacceptable. We need our steel, and decisions made now will reverberate for generations to come." @Roy_Rickhuss
— Community Union (@CommunityUnion) January 19, 2024
“The German, French and Spanish Governments are all committing billions to secure the future of their strategically important steel industries, and our Government must show similar ambition.
“It is encouraging that the Labour Party have reaffirmed their commitment to the £3 billion Green Steel Fund, and using it to supporting a just transition at Tata Steel UK.
“Tata must think again, and work with the UK Government and Labour to unlock the investment our industry needs and deserves.
“Community and GMB do not accept Tata Steel’s rejection of the multi-union plan and confirmation they intend to press forward with their original devastating proposals.
“We will now consult our members on next steps and all options to protect jobs are on the table, including industrial action.”
T V Narendran, Tata Steel’s chief executive and managing director, said: “The course we are putting forward is difficult, but we believe it is the right one.
“Having invested almost £5 billion in the UK business since 2007, we must transform at pace to build a sustainable business in the UK for the long-term.
“Our ambitious plan includes the largest capital expenditure in UK steel production in more than a decade, guaranteeing long-term, high-quality steel production in the UK and transforming the Port Talbot facility into one of Europe’s premier centres for green steelmaking.
“We recognise this proposed restructuring would have a major impact on the individuals and communities concerned, whom we will support with dignity and respect.
“In consultation with our union partners, Tata Steel will offer a comprehensive support package to mitigate the impact of any anticipated job losses, including helping employees to retrain and find new jobs.
“We will continue our work with the UK and Welsh governments, trade unions and the community to help those who may be affected through the proposed transition.”