India’s Tata Steel is to cut around 3,000 jobs at a plant in Wales, a source said on Thursday, as the industry struggles to fund greener production of the metal.
The company will confirm on Friday the closure of two blast furnaces at its Port Talbot steelworks, resulting in the loss of more than a third of staff, a source familiar with the plan told AFP.
After talks on Thursday with unions, which described the development as a “crushing blow”.
Tata said in a statement that it had been “engaging regularly and constructively with … union colleagues and their advisers for some time on how best to create a sustainable green steel future for Tata Steel in the UK.”
“When we have any formal announcement to make about our proposals for the future, we will always share them with our employees first,” he added.
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Late last year, the UK government provided 500 million pounds ($634 million) to fund the production of “greener” steel at the country’s biggest steelmaker, while saying 3,000 jobs were still at risk.
The money for an electric oven secured 5,000 of the more than 8,000 jobs.
“Large-scale job losses would be a crushing blow to Port Talbot and UK industry more generally,” Charlotte Brumpton-Childs, a senior official at the GMB union, said on Thursday.
“It doesn’t have to be this way. Unions provided a realistic, cost-effective alternative that would eliminate all compulsory redundancies.
“This plan appears to have fallen on deaf ears and now steelworkers and their families will suffer,” she added in a statement.
Separate sources told AFP on Thursday that the Italian government had begun the process of placing the struggling former Ilva steel mill under state supervision in a bid to secure thousands of jobs.
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A letter to that effect was sent on Wednesday to the CEO of site operator Acciaierie d’Italia, which is majority-owned by ArcelorMittal, the world’s second-largest steelmaker, the source close to the matter said.
Green steel
In Wales, the Port Talbot steelworks is the UK’s biggest coal producer and the government is trying to help Tata Steel and British Steel, run by China’s Jingye Group, to replace dirty blast furnaces.
The Mumbai-based conglomerate had threatened to close the plant if it did not receive government aid to help decarbonise and reduce emissions.
The government said replacing the coal-fired blast furnaces at the Port Talbot site would reduce UK carbon emissions by around 1.5 per cent.
Experts said green hydrogen could help the massively polluting steel industry, but producing clean energy in large enough quantities requires significant investment.
In addition to climate impacts, the steel sector has seen costs soar amid rising energy prices in the wake of Russia’s invasion of Ukraine.
Source: AFP