Tata will close two blast furnaces at its Port Talbot site by the end of 2024, cueing the refitting of the facility for electric arc furnace with the injection of £750mn. The reconstruction will impact the 4,000 workers employed at the facility with up to 2,000 jobs expected to be cut with the new, less carbon-intensive facility.
Tata Steel acquired the Corus Group, including the Port Talbot plant, in 2007. The plant is one of the largest steelworks in the UK, specialising in the production of hot-rolled and cold-rolled steel products. The acquisition aimed to strengthen Tata Steel's global presence and enhance its capabilities in the European market.
Over the years, the Port Talbot steel plant has faced challenges, including economic pressures, fluctuations in global steel prices, and issues related to overcapacity in the steel industry. In 2016, Tata Steel announced plans to sell its UK business, which included the Port Talbot plant, due to financial difficulties.
The potential sale led to concerns about the future of the plant and the impact on jobs in the region. Tata Steel eventually decided to retain its UK business, including the Port Talbot plant, after discussions with stakeholders, unions, and the UK government - a £500mn grant has been promised.
According to the Financial Times, the plant is currently losing £1.5mn per day. Steel production in the UK has fallen from 24 million tonnes in 1971 to a current amount of six million annually. Electric arc furnaces melt down scrap steel and should be expected to be in operation by 2027.