A closure of Tata's two blast furnaces at Port Talbot steelworks next spring is unlikely, believes Economy Minister Vaughan Gething, while highlighting concerns for its downstream businesses like Trostre as a result of a move to electric arc furnaces. Speaking on the future of steel production at a press conference, Mr Gething said the briefed proposals would see significant jobs losses and “economic and human pain”, but speculation that the entire steelworks could close was unlikely.
“It's important not to get drawn into suggesting that's a realistic proposal now. That will cause further unnecessary anxiety for people, not just in Port Talbot, but in the wider steelmaking community,” he said. He added that Welsh Government ministers are encouraging Tata officials to engage with an upcoming report, commissioned by the unions and compiled by industry experts Syndex, on alternative approaches to decarbonisation at Port Talbot, including the use of hydrogen.
“In the conversations we've had, we have been told that the company wants to understand the proposals that are imminent from the trade union side working with Syndex,” said Mr Gething, adding that the Cardiff Bay administration wants to see “meaningful consultations” between the company and steel trade unions.
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“We have been told by that company that they will engage in meaningful consultation. That is our expectation of what should happen but I wouldn't want to put a timeframe on how long that meaningful consultation would need to take place.”
It follows the postponed announcement by the Indian-owned steelmaker last week which was expected to confirm proposals that Port Talbot will make recycled steel via an electric arc furnace, as opposed to its current primary steel making operation based on two huge blast furnaces.
The steelmaker and the 海角视频 Government agreed a £1.2bn funding package to decarbonise its operations in the 海角视频 in September, with £500m from the 海角视频 Government and the remainder from the company itself.
Tata Steel, whose Port Talbot site is by far Wales’ biggest industrial polluter, has been under pressure for many years to move to greener forms of steelmaking.
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Under its deal with the 海角视频 Government, Tata plans to move away from fossil fuel-powered steelmaking at its Port Talbot site, through its remaining two blast furnaces, to electric arc furnaces - a proven recycled steel technology. It will take around four years to get electric arc furnaces operational at Port Talbot, which is currently losing around £1m a day.
However, the move to electric arc furnaces reduces the number of workers needed at the site, with up to 3,000 jobs at risk at the steelworks and numerous downstream Tata operations, which in Wales include Trostre, Shotton and Llanwern in Wales, as well as the indirect jobs in the surrounding supply chain. Tata employs around 4,000 directly at Port Talbot and 8,000 across all its 海角视频 operations.
Trade unions Community, GMB and Unite have wholeheartedly condemned the plans and claim it is not technologically possible to make the substrate for tinplate via the electric arc furnace route - which puts at risk the 700 jobs at Tata’s tinplate operation in Trostre. They also say it is impossible to make some high-end automotive steels using arc furnaces which puts at risk jobs in Llanwern.
On concerns around the quality of recycled steel for Tata’s downstream operations like Trostre in Llanelli, Mr Gething said: “It is our understanding that the tin plating partner Trostre needs primary steel for it to do its job. So that's part of the concern that we have expressed that we have asked questions about.
“Steel is a strategic asset for any major economy, and if all blast furnace activity ends without an alternative way to make primary steel, then the 海角视频 could be the only G7 country not to have primary steel making capability and that is a choice for the 海角视频 Government.
“My understanding at present is that Tata say that they will carry on delivering steel to Trostre to allow it to do what it can do.”
Chinese-owned British Steel announced earlier this week that it would also look to close down blast furnaces at its North Lincolnshire steel plant and replace them with two electric arc versions, putting 2,000 jobs at risk of redundancy. Together with similar plans by Tata Steel, it means the 海角视频 will no longer be able to make primary steel from raw materials, leaving it potentially exposed to international markets.
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It also could see these steelmakers relying on the scrap metal market in the 海角视频 for its electric arc furnaces. Currently the 海角视频 is one of the largest producers of scrap metal, exporting over eight million metric tons a year.
Asked whether the Welsh Government had concerns about the 海角视频’s supply and demand of recycled steel as steelmakers switch to electric arc furnaces, Mr Gething said: “If we're going to have more electric arc steelmaking, then the 海角视频 Government needs to consider what that looks like. Whether extra incentives are required to intervene in a business model where companies generate profit by exporting that scrap and what that then looks like if they want more of that scrap to be retained in the 海角视频, to have the right quality of scrap, and there is then a potential for alternative jobs to be created in the 海角视频.
“The view of the Welsh Government is we should have primary steelmaking and electric arc steelmaking as part of our routes to the future.”