According to a media report, Tata Steel has requested the UK government’s backing for a 60-million-pound project at its Port Talbot steelworks in Wales.
The project is aimed at overhauling a production line at Port Talbot to be able to make lighter steel for car-making, which is expected to secure the future of Britain’s largest steel operation.
Tata is believed to have informally requested financial support from the government to upgrade its continuous annealing process line (CAPL) to make lighter, thinner and stronger galvanised steels. Automotive giants are trying to slash the weight of cars to cut emissions.
Industry sources told that UK taxpayer support for the CAPL upgrade was integral to Tata committing to reline an ageing blast furnace.
Without the extra investment, one of the two towering furnaces that convert iron ore into molten iron is due to finish operations by the end of next year.
Tata Steel is understood to be working on a plan to extend the furnace’s life until about 2026. However, this plan falls short of a full relining which would cost about 150 million pounds.
Maintaining Port Talbot’s two furnaces is seen by workers’ unions and the UK government as crucial to the survival of the plant, which has about 4,000 workers.
In September 2017, UK business secretary Greg Clark wrote to Natarajan Chandrasekaran, chairman of Tata Sons, asking for a specific commitment to the relining.
Chandrasekaran said, “Overhauling the site would help develop the business viability” for the reline — but fell short of a commitment.
Earlier this year the Tata Steel spokesman said, “We are looking at a range of options as we continue to develop a sustainable UK business for the future.