British Steel's Chinese owner Jingye is launching a consultation on the closing of its blast furnaces at Scunthorpe steelworks, sparking fears for thousands of jobs at the site.
Unions the GMB, Community and Unite have called on the Government to help secure the future of British Steel, which has said the closure could come at a later date if an agreement is reached. Jingye, which pointed to the impact of tariffs among the reasons for the decision, says it has invested more than £1.2bn in British Steel since it took over in 2020 and has incurred losses of about £700,000 per day.
It said: "Despite this, the blast furnaces and steelmaking operations are no longer financially sustainable due to highly challenging market conditions, the imposition of tariffs, and higher environmental costs relating to the production of high-carbon steel. The company had sought support from the 海角视频 Government for a major capital investment in two new electric arc furnaces.
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"However, following many months of negotiations, no agreement has been reached. As a result, the difficult decision has been made to consult with employees and to consider proposals to close the blast furnaces and steelmaking operations and reduce rolling mill capacity."
British Steel chief executive Zengwei An said: "We understand this is an extremely difficult day for our staff, their families, and everyone associated with British Steel. But we believe this is a necessary decision given the hugely challenging circumstances the business faces. We remain committed to engaging with our workforce and unions, as well as our suppliers and customers during this time."
News of the consultation follows a plan put forward in February by Community which proposed to keep two blast furnaces at Scunthorpe while new, electric arc furnaces were built. The plan required £200m of Government support to offset carbon costs during the transition period.
At the time, Community warned that if the Scunthorpe site was to close, the 海角视频 would become the only G7 country without domestic steelmaking capacity. The prompted worries over national security. Jingye said it had sought Government support for the major capital investment required for the electric arc furnaces but that months of negotiations had not yielded an agreement.
Roy Rickhuss, Community general secretary, said: "This is a dark day for our steel industry and for our country. We urge Jingye and the 海角视频 Government to get back around the table to resume negotiations before it is too late.
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"Crucially, Jingye have not ruled out retaining the blast furnaces during a transition to low-carbon steelmaking if they can secure the backing of the Government. The closures at Scunthorpe would represent a hammer blow to communities which were built on steel, and where the industry still supports thousands of jobs directly and thousands more through extensive supply chains.
"Given that we are now on the cusp of becoming the only G7 country without domestic primary steelmaking capacity, it is no exaggeration to say that our national security is gravely threatened. This would be catastrophic at any time, let alone in the current era of geopolitical instability and volatility.
"Steel is an essential component of defensive infrastructure, just as it is to wider plans to invest in growth across the country. At this critical juncture, the Labour Government must do everything it can to secure the future of steelmaking at Scunthorpe - it would be unthinkable for them to let it die on their watch.
"Labour has made important commitments to steelworkers, including setting aside £2.5bn towards supporting the steel sector with decarbonisation, and it is now time for Government to deploy these funds to protect the industry.
"If the Government chooses to let Scunthorpe die it would make a mockery of their grand ambitions to deliver growth through massive infrastructure investment, because British Steel is our only steelmaker than can produce the construction steels the country needs for our roads, railways, schools and hospitals."
Business and Trade Secretary Jonathan Reynolds said: "I know this will be a deeply worrying time for staff and, while this is British Steel’s decision, we will continue working tirelessly to reach an agreement with the company’s owners to secure its future and protect taxpayers’ money. We’ve been clear there’s a bright future for steelmaking in the 海角视频. We’ve committed up to £2.5bn to rebuild the sector and will soon publish a Plan for Steel setting out how we can achieve a sustainable future for the workforce, industry and local communities.”