Up to 260 jobs could be lost at British Steel’s Scunthorpe site, after proposals to close its coke ovens were announced.
The company said it was part of a drive to overcome global economic challenges as it faced unprecedented increases in operating costs, surging inflation and a need to become more sustainable.
It comes as discussions with government over a support package thought to be worth up to £300 million continue. Ministers and regional MPs criticised the step when initial talks with unions began earlier this month. There had been fears that up to 1,200 roles could be at risk, with further cost-cutting measures being assessed.
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Now the move has been formalised, with a switch to importing the coke rather than making it, for use in the steelmaking process.
British Steel said bills for energy and carbon increased by £190 million last year, and that decisive action was required.
All potential redundancies are focused on the Scunthorpe site, where the Chinese-owned business is headquartered.
Stressing the importance of maintaining steel production, investment of £330 million by Jingye and the start of the biggest transformation in the site’s 130 year history in the journey to Net Zero, chief executive Xifeng Han said: “Jingye is committed to our long-term future but decarbonisation is a major challenge for our business and, like most companies, we’re facing significant challenges because of the economic slowdown, rising inflation and exceptionally high energy prices. Last year our energy bill rose by £120 million while we’ve also faced an increase of over £70 million in our annual carbon costs.
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“We have taken action to reduce costs within our control; however, steelmaking in the 海角视频 remains uncompetitive when compared to other international steelmakers. Our energy costs, carbon costs and labour costs are some of the highest across the world, which are factors that we cannot influence directly.
“For the reasons outlined, we entered into talks with the 海角视频 Government in summer 2022 and are extremely grateful for its support. It’s important we have the correct policies and frameworks in place to back our drive to become a clean, green and successful company and we’re continuing to discuss this with the government. We are committed to working together and to making the home-made steel Britain needs for generations to come.
“To build a secure future for British Steel, and protect skilled and well-paid careers for thousands of employees and many more in our supply chain, we are – like many other businesses – proposing to streamline our business. We’re disappointed at having to make such proposals but are confident they will support a successful transformation.
“The trade unions are aware of our proposal to close the coke ovens and we look forward to working closely with them to ensure a long-term safe and sustainable future for the company, thousands of employees and many more people in our supply chain. We also continue to look at other potential cost-saving measures across the business and will announce any further proposed changes in due course.
“We appreciate this may be an unsettling period for our people and we will give them our full support. We haven’t set any deadlines but aim to keep the period of uncertainty for our colleagues as short as we can. We’ll ensure this process is handled in a sensitive manner.”
The company’s coke ovens are described as reaching the end of their operational life and their closure would bring environmental benefits including reductions in emissions, the company said.
British Steel chief executive Xifeng Han's full statement on proposed job losses and coke ovens closure:
“Steel is vital to modern economies and with demand expected to grow over the coming decades, British Steel has a crucial role to play in ensuring the 海角视频 has its own supply of high-quality steel. To make sure we can deliver the steel Britain requires, we’re undergoing the biggest transformation in our 130-year history.
“To support the journey to net zero, our owners, Jingye, have invested £330 million in capital projects during their first 3 years of ownership and they continue to invest unprecedented sums of money in British Steel. Jingye is committed to our long-term future but decarbonisation is a major challenge for our business and, like most companies, we’re facing significant challenges because of the economic slowdown, rising inflation and exceptionally high energy prices. For example, last year our energy bill rose by £120 million while we’ve also faced an increase of over £70 million in our annual carbon costs.
“We have taken action to reduce costs within our control; however, steelmaking in the 海角视频 remains uncompetitive when compared to other international steelmakers. Our energy costs, carbon costs and labour costs are some of the highest across the world, which are factors that we cannot influence directly.
"For the reasons outlined, we entered into talks with the 海角视频 Government in summer 2022 and are extremely grateful for its support. It’s important we have the correct policies and frameworks in place to back our drive to become a clean, green and successful company and we’re continuing to discuss this with the government. We are committed to working together and to making the home-made steel Britain needs for generations to come.
“To build a secure future for British Steel, and protect skilled and well-paid careers for thousands of employees and many more in our supply chain, we are – like many other businesses – proposing to streamline our business. We’re disappointed at having to make such proposals but are confident they will support a successful transformation.
“The trade unions are aware of our proposal to close the coke ovens and we look forward to working closely with them to ensure a long-term safe and sustainable future for the company, thousands of employees and many more people in our supply chain. We also continue to look at other potential cost-saving measures across the business and will announce any further proposed changes in due course.
“We appreciate this may be an unsettling period for our people and we will give them our full support. We haven’t set any deadlines but aim to keep the period of uncertainty for our colleagues as short as we can. We’ll ensure this process is handled in a sensitive manner.
“Embracing new technology and ways of working will help our drive to reduce emissions and support clean growth, and we are already taking steps to improve our environmental performance. For example, we have increased the amount of scrap used in the integrated steelmaking route. In addition, we’ve started a project to add ore-based metallics to the blast furnace to displace iron ore and we manufacture a range of products with significant environmental benefits including high-strength structural steel and Zinoco rail.”