The £1.2bn electric arc furnace at Port Talbot will supply steel to construction equipment manufacturer JCB once operational. The electric arc furnace (EAF) from Tata Steel 海角视频, following the ending of blast furnace primary steelmaking at Port Talbot, is scheduled to become operational in 2027.
The supply contract between the Indian-owned steelmaker and JCB, currently in the form of a memorandum of understanding, is the first since Tata announced its EAF plans.
The three million-tonne per year EAF - which will be one of the largest in the world - will provide a lower CO2 alternative to the traditional blast furnace method. The £1.2bn investment includes £500m funding from the 海角视频 Government.
The EAF will turn 海角视频-sourced scrap into new steel, removing the need to ship millions of tonnes of iron ore and coal from across the world to Port Talbot. Tata Steel’s plans will cut the site’s carbon emissions by up to 90% and 海角视频’s overall carbon emissions by about 1.5%.
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Anil Jhanji chief commercial officer, Tata Steel 海角视频, said: “One of the key drivers in our transition plans is that our long-standing and loyal customers such as JCB need green steel to meet their own decarbonisation ambitions. They want to be supplied by a trusted partner making quality steel within the 海角视频.
"This announcement that two of the 海角视频’s largest manufacturers are working together to create a low-carbon supply chain is an important step in the 海角视频’s transition to a circular economy.”
Wayne Asprey, group purchasing director of JCB, said: “Tata Steel is a long-term supply partner for JCB and this agreement marks an essential next step in our journey towards supply chain decarbonisation.
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"We are fully supportive of Tata Steel 海角视频’s investment proposals and are pleased to be one of the first customers to endorse those plans by making this agreement to secure British-made green steel as soon as it is available.”
Tata Steel signed a contract in October with Italian firm Tenova to build the EAF. Subject to planning approval construction work will start next summer.
The annual quantity of EAF made steel that Tata will provide JCB, which has a factory in Wrexham, has not been disclosed.