Tata Steel sweetens the pill: Offers £130m more to Port Talbot workers

5 Feb 2024 , 01:55 AM

According to Koushik Chatterjee, the company’s CFO, Tata Steel has put up an extra financial ‘support package’ of about 130 million pounds for the impacted employees as part of its transition plan in the UK. The company created a decarbonisation plan for Tata Steel UK that includes installing new plant machinery with low-emission technologies in order to cut energy expenses and reduce carbon emissions.

Accordingly, the company would gradually close its coke ovens and high-emission blast furnaces in 2024 and switch to an electric arc furnace (EAF) for the production of steel at a cost of roughly 1.25 billion pounds, with 500 million pounds in support from the UK government. Chatterjee said in an earnings call.

‘Tata Steel is acutely aware of the impact of its proposal to wind down the heavy end of Port Talbot on the individuals and on the local community associated with our steel works, and we will meaningfully consult with our employees and work to provide them a fair, dignified, and considerate outcome,’ he stated.

According to the CFO, Tata Steel plans to dedicate more than 130 million pounds to a thorough benefits package for the impacted workers.

This is on top of the 100 million pounds the company, the UK government, and the Welsh government put up for the Transition Board, to which the corporation has already donated GBP 20 million, he said.

T. V. Narendran, CEO and MD of Tata Steel, stated: ‘We have worked really hard to assist this (UK) business for the past 15 years. However, I believe we have reached a point where carrying on in the same manner is no longer viable.’ ‘The circumstances are challenging for our staff members. We completely understand it,’ he remarked.

According to him, Tata Steel UK intends to close its first blast furnace by the middle of this year, and its second furnace would close in the second half of 2024.

According to Narendran, the switch to EAF-based steel production will result in a ten-year reduction in CO2 emissions of 50 million tonnes.

With its headquarters in India, Tata Steel is the owner of the largest steelworks in the UK, located in Port Talbot, South Wales, and it employs about 8,000 people nationwide.

Tata Steel and the UK government reached an agreement in September 2023 to jointly invest 1.25 billion pounds towards the implementation of decarbonisation plans at the British steel plant in Port Talbot.

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