Welsh steel’s future assured

THE UK government and Mumbai-based Tata agreed a £1.2 billion (€1.38 billion) deal to secure the Port Talbot steelworks.

This will safeguard 5,000 of 8,000 UK jobs, 4,000 of which are based at the Welsh plant.

Had the government not intervened with a grant worth approximately £500 million (€578.3 million), Tata Steel would probably have closed the Port Talbot works and left the UK, Welsh secretary David TC Davies said in a BBC Wales interview.

This would have affected other areas as Tata also has operations based Shotton, Llanwern, Trostre, Corby, Hartlepool and Shapfell, he said.

Davies agreed that it was “terribly sad” that not all jobs could be saved, revealing that up to £100 million (€115.6 million) would be used to help those who will be laid off.

“Tata are currently losing over £1 million (€1.16 million) a day at Port Talbot,” the Welsh secretary added.  “No company is ever going to accept losses like that, so they decided they were going to close that plant down.”

Davies went on to explain that once it became aware of the danger, the government began negotiating and asked, “What do we need to do to keep Tata here?”

The £1.2 billion deal entails substituting the existing coal-powered blast furnaces, which are nearing the end of their effective life, with electric arc furnaces that can be powered by renewable energy.  As a result the UK’s entire carbon emissions will fall by around 1.5 per cent.

Instead of producing virgin steel, the Port Talbot works will now produce recycled steel, with Tata investing an additional £700 million (€809.6 million).

“This proposal is a landmark moment for maintaining ongoing UK steel production,  supporting sustainable economic growth, cutting emissions, and creating green jobs,” said Britain’s Chancellor of the Exchequer, Jeremy Hunt.

“It is right that we are ready to step in to protect this world-class manufacturing industry and to support a green growth hub in South Wales.”