• Friday, July 12, 2024

Business

Tata Steel says job cuts in UK plants ‘inevitable’

India-based Tata Steel owns the UK’s largest steelworks of three million tonne per annum (MTPA) at Port Talbot in South Wales and employs around 8,000 people.

India-based Tata Steel employs around 8,000 people across its operations in the UK

By: Eastern Eye

ABOUT 2,500 workers at Tata Steel’s operations, which are in a transition phase, will lose their jobs, the company’s CEO, TV Narendran, has said.

India-based Tata Steel owns the UK’s largest steelworks of three million tonne per annum (MTPA) at Port Talbot in South Wales and employs around 8,000 people across its operations in the country.

As part of its decarbonisation plan, the company is swapping its blast furnace (BF) for a low-emission electric arc furnace (EAF), which is nearing the end of its lifecycle

In an interview, Narendran said the transition to the electric arc furnace with the UK government aid will make the company competitive in terms of production costs, and also help in the reduction of five million tonnes of carbon dioxide per year.

“But all this involves 2,500 job losses and that is what the unions obviously are not happy with. A conversation on doing it in a smooth as possible way is going on with the unions,” he said.

In September 2023, Tata Steel and the UK government agreed on a joint investment plan of £1.25 billion to execute decarbonisation plans at the Port Talbot plant. Of the £1.25bn, £500 million was provided by the UK government.

Narendran said the coke ovens had closed in March. One blast furnace will close in June because it is operationally struggling, and the second blast furnace will close in September.

“We want to transition to EAF production because the UK has a lot of steel scrap. It is one of the few countries which is a big exporter of steel scrap. So, it makes sense to use scrap available in the UK to make steel in the UK to sell to customers in the UK, as compared to importing iron ore and coal from all over the world.

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“Making steel through the EAF process will make Tata Steel competitive by at least £117.29 a tonne. So, the UK business, which has traditionally lost money for the company, can become EBITDA positive and cash neutral,” he added.

Tata Steel aims to complete decarbonisation journey at its plant in the UK in coming three years, the CEO previously said.

Annual revenues from the UK business were £2.706bn and EBITDA loss stood at £364m. For the January-March quarter, revenues were £647m and EBITDA loss stood at £34m.

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