UK, Tata Steel sign 1.25 million pound deal; protest over potential job cuts
Tata will use the government subsidy to help convert the South Wales plant's two coal coal-fired blast furnaces to electric arc versions.
Tata Steel and the British government announced a mega joint investment deal on Friday worth 1.25 million pounds, including the Rishi Sunak government's plan to pump in 500 million pounds into the the country's biggest steel plant in South Wales. This comes as protests erupted owing to potential job risks to 3,000 workers.
“A big day for UK steel. We've agreed a joint £1 billion investment with @TataSteelLtd to save thousands of British jobs and secure the future of the steel industry in Wales. This follows the £4 billion investment we secured from @TataCompanies in July to create 4,000 jobs”, British prime minister Rishi Sunak posted on social media platform X.
Here are five things we need to know about the mega steel deal in the UK.
1. Tata currently owns the Port Talbot steelworks in south Wales. It will use the government subsidy to help convert the plant's two coal coal-fired blast furnaces to electric arc versions that can run on zero-carbon electricity. The furnaces will start running within three years of regulatory and planning approvals, AP reported.
2. Tata Steel's chief financial officer Koushik Chatterjee was quoted by Bloomberg as saying that the deal would see the company replace its current coal-based operations with a single electric-arc furnace having a capacity to manufacture three million tons of steel a year. Steel manufacturers across Europe have got public subdidies to fund the high capital cost of decarbonisation as the industry still largely depends on coal-fired blast furnaces.
3. However, the mega deal has cast a shadow on 3,000 jobs at the steel plant. UK's Department for Business and Trade said the money would help finance a new electric arc furnace, safeguarding 5,000 of the more than 8,000 jobs, AFP reported.
4. Paul Novak, the head of TUC umbrella body of trade union, told AFP that the uncertainty over jobs was the opposite of a just transition."Ministers must press pause and urgently get around the table with unions" to avoid compulsory redundancies, he saod.
Unite general secretary Sharon Graham called the plan "disgraceful, short-sighted and lack ambition". “Unite will be fighting tooth and nail not only to save these jobs but to create more jobs in steel”, the Unite general secretary added.
5. Britain's steel industry directly employs 39,800 people according to figures released by UK Steel in May, and supports a further 50,000 jobs in the supply chain, a Bloomberg report stated. The government said Tata Steel UK would now inform and consult with staff and unions.
Stay informed on Business News along with Gold Rates Today, India News and other related updates on Hindustan Times Website and APPs