INDIAN-owned Tata Steel is to cut about 3,000 jobs at a plant in Wales, a source said Thursday (18), as the industry struggles to finance greener production of the metal.
The company will on Friday (19) confirm the closure of two blast furnaces at the Port Talbot steelworks, resulting in the loss of over one-third of staff, said the source with knowledge of the plan.
It follows talks Thursday with unions, who described the development as “a crushing blow”.
Tata in a statement said it had “been engaging regularly and constructively with… trades union colleagues and their advisors for some time about the best way forward to create a sustainable green steel future for Tata Steel in the UK.
“When we have any formal announcement to make about our proposals for the future, we will always share these with our employees first,” it added.
Towards the end of last year, the UK government provided £500 million to fund the production of “greener” steel at the country’s biggest steelworks, while saying that 3,000 jobs were still at risk.
The money for an electric furnace safeguarded 5,000 of the more than 8,000 jobs.
“Large-scale job losses would be a crushing blow to Port Talbot and UK manufacturing in general,” Charlotte Brumpton-Childs, a senior official at the GMB union, said Thursday.
“It doesn’t have to be this way. Unions provided a realistic, costed alternative that would rule out all compulsory redundancies.
“This plan appears to have fallen on deaf ears and now steelworkers and their families will suffer,” she added in a statement.
Separate sources said on Thursday that the Italian government had launched the process of placing the struggling former Ilva steelworks under state supervision in a bid to secure thousands of jobs.
A letter to this effect was sent Wednesday (17) to the CEO of the site’s operator Acciaierie d’Italia, which is majority-owned by ArcelorMittal, the world’s second largest steelmaker, said the source close to the matter.
In Wales, Port Talbot steelworks is the UK’s single biggest carbon emitter, and the government has been looking to help Tata Steel and British Steel, run by Chinese group Jingye, to replace dirty blast furnaces.
The Mumbai-based conglomerate had threatened to shut the plant unless it received state aid to help decarbonise production and cut emissions.
The government said replacing the coal-powered blast furnaces at the Port Talbot site would reduce the UK’s carbon emissions by about 1.5 per cent.
Experts have said green hydrogen could help the massively polluting steel industry, but producing the clean energy in large enough quantities requires significant investment.
As well as climate fallout, the steel sector has seen costs soar amid surging energy prices in the wake of Russia’s invasion of Ukraine.