Port Talbot’s steelworks will mark the beginning of its move towards green steel production today.
Ministers will join Tata Steel chiefs at the South Wales steel plant for a groundbreaking ceremony to mark the beginning of construction for a new £1.25bn electric arc furnace.
Natarajan Chandrasekaran, chairman of Tata Steel and the Tata Group, described the moment as an “important day for Tata Group, Tata Steel and for the 海角视频”.
He added: “At Port Talbot, we are building the foundations of a cleaner, greener future, supporting jobs, driving innovation and demonstrating our commitment to responsible industry leadership.”
The 海角视频 Government has provided £500m towards the cost of the project.
The switch-on is due to take place in 2027 as part of the push towards greener production. Tata insists the move will cut Port Talbot’s emissions by 90%, while ensuring the future of steel production in the town.
The plant’s last blast furnace was shut down last September, with 2,500 workers at Port Talbot and Tata's 海角视频 downstream businesses, losing their jobs in the aftermath.
Following the restructuring Tata sill employs 5,000 in the 海角视频.
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The new electric arc furnace will be able to process scrap steel, but is not able to make virgin steel as a blast furnace can.
Some MPs have said workers in South Wales have been let down in comparison with those retaining jobs in Scunthorpe, where ministers took control of the steelworks to prevent the closure of its blast furnaces.
The 海角视频 Government has said the two steelworks were in different situations.
Ahead of the groundbreaking ceremony, Business Secretary Jonathan Reynolds said: “This is our Industrial Strategy in action and is great news for Welsh steelmaking, backing this crucial Welsh industry, which will give certainty to local communities and thousands of local jobs for years to come.
“This Government is committed to a bright future for our steel industry, which is why we provided £500 million of funding to make this project possible.”
Secretary of State for Wales Jo Stevens, meanwhile, said the new furnace would help to realise “the promise we made to the community, while the development of floating offshore wind, plans for a Celtic Freeport and millions more for local regeneration all mean that Port Talbot has a bright future”.
First Minister of Wales Eluned Morgan said: “This is a momentous day for heavy industry in Wales, as the electric arc furnace has secured the long-term future of steel making at Port Talbot.
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“Seeing spades in the ground today provides a tangible sign of Tata’s intention to continue producing steel in the area, an industry which has provided quality jobs to local people for generations.”
There are concerns that the US administration will seek to exclude Port Talbot from a deal on a zero tariff rate for steel and alunimim as it is no longer a melt and pour operation, with slab being imported from third countries in India and Holland where tariffs of 50% are now in place when exporting into the US marketplace. The 海角视频 Government will look for an exemption for Port Talbot until the EAF is up and running.
Discussions over steel tariffs between the US and the 海角视频 are continuing.
A Welsh Government spokesperson said: “We welcome the announcement that under the economic prosperity deal (between the US and 海角视频) there will be a removal of tariffs on 海角视频 steel into the US in the future. This will support the sector, and our steel exports to the US.
“We continue to work with the 海角视频 Government through the inter-governmental machinery to help inform their negotiations with the US, and we are working with our businesses to assess and address the impact on the steel sector in Wales, including any steel origin requirements.
"We also continue to encourage the 海角视频 Government to protect the sector from trade diversion should other nations be unable to secure a deal with the US.”
Community Assistant General Secretary Alasdair McDiarmid said: This bittersweet day is a consequence of the devastating closure of the blast furnaces, but importantly a future for Port Talbot steelmaking is being secured. The workforce needs the Electric Arc Furnace project to be both a success and a turning point, and we look forward to playing our part to get the new furnace up and running.
"Today should represent the first step towards rebuilding our steel industry and creating new high-quality jobs for our steel communities. Going forward we must see further investment to develop and grow the business, both here in Port Talbot and across all the crucial downstream sites.
"It was also good to see the Secretary of State in Port Talbot today, and we will continue to hold talks with government on their plans to safeguard and co-invest in our steel industry. The 海角视频 needs a strong and resilient steel sector now more than ever, and steel should be the cornerstone of a national industrial strategy fit for the future."