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Unions called on the government to help secure the future of the
company, which Jingye said is suffering daily losses of around
700,000 pounds ($900,000) despite the Chinese firm investing
more than 1.2 billion to maintain operations since its takeover
of British Steel in 2020.
The company, Britain's second-biggest steelmaker, blamed “highly
challenging market conditions, the imposition of tariffs, and
higher environmental costs relating to the production of
high-carbon steel.”
British Steel said it is consulting with unions over the the
decision to close the blast furnaces and steelmaking operations
and reduce rolling mill capacity, potentially as early as June.
Between 2,000 to 2,700 jobs are potentially at risk.
The company had sought support from the government for a major
capital investment in two new electric arc furnaces, which would
emit far less carbon into the atmosphere, but no agreement was
reached after months of negotiations.
Unions published a report last month setting out how to
decarbonize steelmaking at British Steel, which would involve
the continued operation of Scunthorpe’s two existing blast
furnaces while two new electric ones constructed on site. The
plan would require an additional 200 million pounds of
government support to mitigate carbon costs in the interim
period.
“This is a dark day for our steel industry and for our country,"
said Roy Rickhuss, the general secretary of the Community union.
“The closures at Scunthorpe would represent a hammer blow to
communities which were built on steel, and where the industry
still supports thousands of jobs directly and thousands more
through extensive supply chains."
Rickhuss urged Jingye and the government to get back to the
negotiating table and said the Chinese company “have not ruled
out" retaining the blast furnaces during a transition if they
can win government backing.
Business and Trade Secretary Jonathan Reynolds said the
government will “continue working tirelessly” to reach an
agreement with Jingye.
“We’ve been clear there’s a bright future for steelmaking in the
U.K," he said.
At its height in the postwar period, British steelmaking was a
global leader, employing more than 300,000 people, before
cheaper offerings from China and other countries hit production.
It now employs about 40,000 directly, with the industry
accounting for just 0.1% of the British economy.
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