Tata Steel’s UK Arm Is Staring At The Face Of Closure Without Government Aid

Photo by Tata Steel

Tata Steel, UK’s biggest steelworks, has warned its sites could no longer operate.

Located in Port Talbot, the company is considering shutting its doors – unless the British government steps in with a subsidy of about  £1.5 billion (Rs.14,400 Cr) in the next 12 months.

The aid will help the company cut down on its carbon emissions.

The Decarb Bid

Two blast furnaces at Port Talbot will be aborted as part of the wind-up plans.

Instead, two electric arc furnaces, which will be less carbon-intensive, will be built.

This will cost the company about £3 billion, but it hopes to receive half of that amount from the UK government in the form of a subsidy.

Will the UK government be kind enough?

Chairman Natarajan Chandrasekaran said, “A transition to a greener steel plant is our intention. But this is only possible with financial help from the government”.

In total, Tata employs 8,000 people across the UK, with half of these in Port Talbot and thousands more indirectly through the supply chain.

The UK government said steel “plays a critical role” in the UK economy, and Tata was “a valued steel producer and significant employer”.

Then what’s stopping it?

Not So Steely, Afterall

Reportedly, the Port Talbot plant hasn’t been blessed with profits for the last 15 years, and when he left Tata in 2016, the company was clocking in losses of £1 million a day.  

Clearly, the site needs government support for a profitable future. Else answer remains to shut it down.

After all, a business also needs to justify the investment unless the government participates.

Too long? Here’s a one-liner: As part of its decarbonization effort, Tata Steel would close its two blast furnaces in the UK and wants an agreement with the government to help with emissions.

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