Green move: Tata Steel will let go of 2,800 people as it closes two blast furnaces at its Port Talbot plant in United Kingdom’s South Wales.
The move comes as part of the Mumbai-headquartered steel company’s efforts for greener operations.

"Up to 2,800 employees are expected to be potentially affected, out of which around 2,500 roles would be impacted in the next 18 months," Tata Steel said.

The next 300 roles are to go three years later.

Tata Steel will begin with its statutory consultation on the restructuring plan proposed, introducing support arrangements for the affected portion of the workforce, the company stated.

“This plan is intended to reverse more than a decade of losses and transition from the legacy blast furnaces to a more sustainable, green steel business,” the Indian conglomerate said, adding that the transformation would secure a majority of Tata Steel UK’s existing product capability.

This would also maintain the country’s self-sufficiency in steelmaking while reducing its carbon emissions by 5 million tonnes per year, as per the statement.

The two blast furnaces will be replaced with electric arc furnaces as part of the plan for cutting down on costs, as well as the emissions.
Facilities related to the blast furnaces at the Port Talbot plant, like coking ovens and the steel shop would also be closed.

Tata Steel said it will embark on maximising voluntary redundancies, with a proposal to commit in excess of GBP 130 million to a comprehensive support package for the impacted employees.

These include skills training as well as job-seeking initiatives.

This follows the additional GBP 100 million funding for the Transition Board, which was set up with the UK and Welsh governments in order to support affected employees, contractors and communities, as per the company.

The plant will continue to roll slab into hot-rolled coil (HRC) for the period of transition, as it plans to import from its operations in India, the Netherlands and other "strategic suppliers" on the international market.

About 200 positions will be saved by maintaining operations at the site’s hot strip mill, which rolls steel slab.

T V Narendran, Tata Steel’s CEO and Managing Director said: “The course we are putting forward is difficult, but we believe it is the right one. Having invested almost GBP 5 billion in the UK business since 2007, we must transform at pace to build a sustainable business in the UK for the long-term.”

The Community Trade Union said Tata and the UK government "must reconsider their positions to safeguard the future of British steelmaking, and head off a major industrial dispute".

The government has agreed to give Tata GBP 500 million towards the installation of a new 3 million tonnes per year electric arc furnace, which will be operational by 2027. As part of the deal, Tata agreed to invest GBP 700 million.

But unions have spoken against the deal, which they say overlooks other options such as direct-reduced iron.

This could allow Tata to continue producing virgin iron in the UK.

Tata Steel said it was not “feasible or affordable” to adopt trade union proposals to continue production at the loss-making plant during a "transition to greener, cheaper steelmaking operations".

The cuts come despite the government providing GBP 500 million of financial backing for Tata’s GBP 1.25 billion four-year plan to build electric arc furnaces, which make steel from scrap metal rather than virgin steel, made from scratch.

Tata Steel said that Port Talbot’s two high-emission blast furnaces and coke ovens would close in a phased manner with the first blast furnace closing around mid-2024 and the remaining heavy-end assets would wind down during the second half of 2024.

The proposal also includes a wider restructuring of other locations and functions across the company, including the intended closure of the Continuous Annealing Processing Line (CAPL) in March 2025.

Rishi Sunak insisted that the government’s investment showed it was “absolutely committed” to British steelmaking but Labour’s shadow business minister, Jonathan Reynolds, has described its strategy as “GBP 500 million for 3,000 job losses”.

(With PTI Inputs)

The move comes as part of its efforts for greener operations.

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