Tata bags £500M from UK government for green steel project
Tata Steel has successfully secured a £500 million grant from the UK government for its green steel project in Port Talbot. The project, valued at £1.25 billion, is set to be operational within three years, and is expected to preserve 5,000 jobs. This deal comes after months of negotiations with the newly-formed Labour government in the UK.
New deal offers improved support for workers
The initial agreement was drafted by the previous Conservative government, but has undergone revisions under the new administration. The updated deal now includes better for workers facing redundancy. UK Business Secretary Jonathan Reynolds stated, "The new and improved deal goes much further than the previous government's agreement." It promises a minimum voluntary redundancy payout of £15,000 for full-time employees, plus a £5,000 'retention' payment and paid-for training.
Transition to low-emission system
As part of a restructuring plan agreed in 2023, Tata Steel will replace the blast furnaces at its Port Talbot unit with electric furnaces to use recycled steel. This transition aims to reduce carbon emissions, but will also result in the loss of 2,800 jobs due to less manpower required for electric furnaces. To mitigate this impact, Tata Steel is offering a comprehensive support package and voluntary redundancy process combined with cross-matching and/or re-skilling.
Plan to close remaining blast furnaces
Earlier in 2024, Tata Steel announced its plan to shut down its remaining two blast furnaces ahead of switching production to a new electric furnace. One of the furnaces has already closed, while the other one is due to cease production later this month. "I would like to thank the UK Steel Committee and various departments of the UK and Welsh governments for their support in reaching this agreement," said Tata Steel Managing Director T.V. Narendran.
Tata Steel's commitment to new investments in steel
Reynolds revealed that Tata Steel has committed to work with the UK government to evaluate new investments in steel. According to a statement from Reynolds's office, Tata will offer the staff at risk of compulsory redundancy, a comprehensive training program as an alternative. It will provide recognized qualifications in sought-after skills. Employees on this program will be on full pay for the first month and £27,000 per year for 11 months following. Salary costs will be borne by Tata Steel.
