British Steel announced that it would be closing its Scunthorpe steelmaking operation, putting up to 2700 jobs at risk.
This proposal includes closing the Scunthorpe Rod Mill and steelmaking plants, as well as blast furnaces. It follows failed negotiations with UK authorities over the financial support of a greener transition.
British Steel has stated that they have been unable secure agreement with UK government to receive financial support for their operations. They also failed to invest in Electric Arc Furnace technology (EAF), which is a greener alternative to the traditional methods of steelmaking.
This company owned by the Jingye Group in China has started a process of consultation and is currently considering three different options.
By early June 2025, the steelmaking and blast furnaces will be shut down, as well as Scunthorpe’s Rod mill.
In September 2025, the blast furnaces and steelmaking will cease operations.
The blast furnaces will be closed and the steelmaking plants shut down at an unspecified later date, beyond September 2025.
British Steel’s proposed closures blamed on financial difficulties
British Steel stated in a press release that the Jingye shareholder has been investing more than PS1.2billion since 2020 to keep the company running despite production problems and financial losses.
To date, over PS300m has been invested in capital projects, including a modern mast service center in Skinningrove and rail storage facilities, as well as a brand new billet caster.
The blast furnaces are not financially viable due to market challenges, tariffs, or higher costs associated with the production of steel high in carbon.
British Steel’s CEO Zengwei An acknowledges the difficulties the announcement will cause to employees and their families but defends the decision as necessary given “hugely difficult circumstances” that the company is facing.
An said, “We are committed to working with our employees and unions as well as suppliers and our customers in this period.”
The company says it will keep on talking with the UK Government in order to find a viable way forward.
The future of this plant is in question due to the absence of an agreement.
British Steel is held hostage by Unite Union
Unite has condemned British Steel’s decision. General secretary Sharon Graham accused the company of using their workforce to gain a bigger financial package.
Graham stated that “this announcement is a complete disgrace.”
British Steel has been guilty of holding the government ransom while using their dedicated workers as pawns.”
She said that the government has already made a significant investment offer that includes long-term employment guarantees.
She urged, “British Steel should now retract its job threats and collaborate with the Government and Unite to find a way forward that is sustainable and in the interests of workers, communities and wider economic growth.”
Jingye rejected the PS500m Government Support Package
British Steel parent company Jingye is reported to have rejected a PS500m package of support from the UK Government.
This funding is intended to help the switch to more environmentally friendly electric arc furnaces to replace existing blast furnaces.
Sky News reported the proposed amount matched that granted last year to Tata Steel as part of the PS1.25bn package for the aiding the transition to the low-carbon steel manufacturing.
Jingye, however, has been reported to have pushed for a larger sum – potentially exceeding PS1bn – in order to make this shift feasible.
According to government sources, British Steel would lose jobs if it accepted the PS500m offer, but the job loss could be spread out over a longer time period. This would reduce the impact of the deal on the workers and region.
Green steel production is a major part of the UK’s industrial strategy. It aims to reduce carbon emission while maintaining domestic steelmaking capability.
The scale of the financial assistance required is still a controversial issue.
Jingye claims that the transition would be impossible without more government support, but Ministers do not want to spend additional taxpayer money without assurances on job creation and investment.
Scunthorpe’s future is uncertain after nationalisation discussions resurface
The fate of Scunthorpe remains in doubt after British Steel rejected the offer from the Government.
Sarah Jones, the Minister of Industry in Canada, told the House of Commons Thursday that the discussions are still ongoing. A question urgent on this issue is also expected.
Government pressure continues to mount on the government to reach a deal to protect jobs and ensure that the steel industry transitions towards cleaner production.
Several reports indicate that nationalisation may be considered as a final resort. However, ministers haven’t publicly confirmed it.
After a brief period as a public company, British Steel has been acquired by Jingye. However, the firm is now facing financial problems.
The company currently employs more than a thousand people in Scunthorpe and Teesside.
The uncertainty at British Steel Scunthorpe is deeply worrying for the thousands of employees.
Many are afraid that the economy will be devastated if a deal isn’t reached quickly.
What went wrong with this post British Steel’s plans to shut down Scunthorpe, which puts 2,700 jobs in danger? This post may change as new information becomes available
