Tata Steel ‘close to securing £500m funding from government’

TATA STEEL is believed to be close to securing a £500m funding from the UK government to modernise its plant in Wales.

Whitehall officials and the steelmaker are close to agreeing a deal that would also result in the company’s Indian parent committing about £700 in capital expenditure over a period of time, Sky News reported.

In April this year, Tata Steel chief executive TV Narendran said the company could not see its future in the UK without the government’s support.

It had sought £1.5 billion from the government to carry out its plans to cut carbon emissions as being done in other European countries. The Welsh administration too had called for a package for the company to secure steelmaking at Port Talbot.

However, Tata Steel’s shift from its polluting blast furnaces to electric arc furnaces to meet its decarbonisation targets would result in thousands of job losses.

Tata Steel UK employs about 8,000 people, including nearly 4,000 in Port Talbot and the workforce could be trimmed by roughly 3,000 in the long run as modern technologies make steelmaking less labour intensive.

A Tata Steel spokesman told Sky News that the company was “continuing to discuss with the UK government a framework for continuity and decarbonisation of steelmaking in the UK amidst very challenging underlying business conditions, given that several of its heavy-end assets are approaching the end of life.”

"Given the financially constrained position of our UK business, such significant change is only possible with government investment and support, as also seen in other steelmaking countries in Europe where governments are actively supporting companies in de-carbonisation initiatives."

However, Community, the steelworkers' union, said it has not agreed on any decarbonisation strategy for Port Talbot.

"We continue to support a solution that will maintain blast furnace production and safeguard the future for all the UK plants,” Community said, adding “We are ready to use all means at our disposal to protect jobs and our vital strategic industry."