The 海角视频 Government and Tata have agreed a £1.2bn funding pacakage to decarbonise Port Talbot steelworks in a move that puts 3,000 steel jobs at risk.
After protracted negotiations the 海角视频 Government is committing a package of £500m with the rest coming from the Indian-owned steelmaker to transition the current blast furnace steelworks to an electric arc furnace operation.
Both parties said the investment will bolster the 海角视频’s steel security and would be the first major step towards decarbonising the sector- reducing direct emissions by 50 million tonnes over a decade.
However, unions described the announcement, for which it said it has no prior consultation on, as a hammer blow with so many jobs at risk. Port Talbot steelworks employs 4,000 directly with Tata employing a further 4,000 at its downstream operations that include Shotton and Trostre in Wales.
New arc furnaces will be installed over time, with the site's blast furnace five having two years left operationally and blast four potentially a further decade.
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Electric arc furnace use an electric current to melt scrap steel or iron and produce steel, whereas blast furnaces use coke, a carbon-intensive fuel made from coal.
Tata group chairman N Chandrasekaran said: “The agreement with the 海角视频 Government is a defining moment for the future of the steel industry and indeed the industrial value chain in the 海角视频. It has been an absolute pleasure to work with Prime Minister Rt Hon Rishi Sunak in developing the proposed transition pathway for the future of sustainable steelmaking in the 海角视频.
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“The proposed investment will preserve significant employment and presents a great opportunity for the development of a green technology-based industrial ecosystem in South Wales. We look forward to working with our stakeholders on these proposals in a responsible manner.”
Tata Steel’s chief executive and managing director, T V Narendran said: “Tata Steel 海角视频 has been facing significant challenges due to the heavy-end facilities approaching their end of life. The proposed project, with one of the largest investments in the 海角视频 steel industry in recent decades, provides an opportunity for an optimal outcome for all stakeholders.
“We will undertake a meaningful consultation with the unions on the proposed transition pathway in the context of future risk and opportunities for Tata Steel 海角视频. With the support of the 海角视频 Government and dedicated efforts of the employees of Tata Steel 海角视频 along with all stakeholders, we will work to transform Tata Steel 海角视频 into a green, modern future ready business.”
The 海角视频 Government expects that the proposal – which remains subject to information and consultation processes led by Tata Steel – has the potential to safeguard over 5,000 jobs across the 海角视频.
it said it would also ensure a broad range of support for any staff who are affected by the transition, working with the Welsh Government and Tata Steel to establish a dedicated transition board to support both affected employees and the local economy, with up to £100m funding.
Business and Trade Secretary, Kemi Badenoch, said: “The 海角视频 Government is backing our steel sector, and this proposal will secure a sustainable future for Welsh steel and is expected to save thousands of jobs in the long term
“This is an historic package of support from the 海角视频 Government and will not only protect skilled jobs in Wales but also grow the 海角视频 economy, boost growth and help ensure a successful 海角视频 steel industry.”
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Secretary of State for Wales, David TC Davies, said:" Steelmaking remains a vital part of the Welsh economy and this huge support package from the 海角视频 Government ensures that the industry now has a bright future to match its long and proud history in South Wales.
“We are investing in our steel industry as it makes the necessary transition to greener methods of production and are also putting support in place for the local workers affected by the changes.”
However, union bosses have criticised the announcement.
Unite general secretary Sharon Graham said: “These plans are disgraceful, short-sighted and lack ambition. Unite will be fighting tooth and nail not only to save these jobs but to create more jobs in steel.”
Gary Smith, GMB general secretary, said: “The jobs of thousands of steelworkers are now at risk. The cost to local people and the wider Port Talbot community will be immense.
“Once again, we have the spectacle of leaders talking up the fantasy land of a ‘just transition’ while the bitter reality for workers is them getting the sack.”
Alasdair McDiarmid, assistant general secretary of Community Union, the steelworkers’ union, said: “Today’s announcement confirms our fears that Tata Steel intends to move to an electric arc furnace model for steel production at Port Talbot.
“Community is absolutely clear that we do not believe this is the right strategy for our economy or our industry.
“Putting all our eggs in the electric arc basket will come at the cost of thousands of jobs, our economic security, and the independence of our industry.
“Tata and the Government should have consulted with the unions well in advance of the announcement and their failure to do so has put unnecessary worry on the workers at Port Talbot.
“We will do everything in our power to protect our industry and our members from the implications of today’s misguided decarbonisation on the cheap announcement."
A Welsh Government spokesman said: "We have worked closely with Tata for many years to safeguard the long-term future of steel production in Wales and have urged the 海角视频 Government to provide the investment needed to support the move to greener methods of steel production.
“This is a very worrying time for the whole community and it is essential Tata now has a meaningful consultation with employees and their trades unions about these proposals.
“While today’s announcement contains significant investment for the longer term, it is inevitable that Tata employees, and their families, are focused on the impact it will have on jobs in Port Talbot and Tata’s downstream facilities. We now need to consider the announcement and proposed timeline in detail.
“Meanwhile, we will continue to work closely with the trades unions and the company and do everything we can to minimise job losses.”
Plaid Cymru members for South Wales West, Luke Fletcher and Sioned Williams, said: “The potential job losses at Tata’s Port Talbot plant will have a devastating impact not only on the people of Port Talbot and its neighbouring communities but on the local and national economy.
“Our solidarity is with the workers at this time and we stand ready to support those who need it.”
Ian Price, CBI Wales director, said: "The announcement that the 海角视频 Government and Tata Steel are jointly committing over £1bn to its Port Talbot steelworks, safeguarding a number of jobs and the facility’s future is undoubtedly welcome.
“It's crucial that policymakers and local businesses now step in to provide support and equip those Tata workers facing possible redundancy with the tools they need to make a swift return to the job market. Their expertise is vital amid a growing skills gap facing so many industries.”