Tata Steel confirms 1.25 Billion Pound investment for Port Talbot furnace

26 Apr 2024 , 09:30 AM

On 25 April, Tata Steel announced a £1.25 billion commitment to establish an electric arc furnace in Port Talbot, replacing two blast furnaces and closing existing heavy-end assets in the coming months.

Tata Steel has told the labour unions that Port Talbot's two blast furnaces, No. 5 and No. 4, will close at the end of June and September, respectively. This is in contrast to the union's proposal, which would have kept a blast furnace operational while constructing an electric arc furnace.

The steelmaker argued that the union's alternative plan would cost at least £1.6 Billion, and that building a new electric arc furnace while maintaining the existing steel melting shop would be risky and complex, delaying the transition by two years.

Tata Steel’s CEO and Managing Director, Mr. T V Narendran, stated that after thorough consideration of various options over the past seven months and consultation with union representatives, they have opted to move forward with their proposed restructuring and transition. He emphasized that their chosen proposal is the most feasible compared to the unions’ plan, which is deemed financially unsustainable and poses significant operational and safety risks.

According to UK media sites, unions have warned of a difficult fight ahead. Tata Steel has announced that it will launch a voluntary redundancy policy on May 15.

Earlier this year, the business revealed plans to phase down the two blast furnaces at its Port Talbot Steelworks in Wales, UK, a move that could cost up to 2,800 jobs, citing operational losses and a drive towards greener goals.

The steelmaker stated that it has began preparations to submit equipment orders for the electric arc furnace by September 2024, start enabling and preparatory work at the site by December 2024, and commence construction on the project by August 2025, depending on existing permitting timeframes.

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