British Steel is set to close its blast furnaces in Scunthorpe by the end of the year, putting 2,500 jobs at risk. The move comes as the Chinese-owned company seeks to accelerate its transition to green steel production, despite receiving £600m in taxpayer support.
The company is in talks with the UK government to cut coking coal imports, which were originally due to last for another two years, as part of its £1.3bn decarbonisation strategy. This could see three million tonnes of steel produced at Scunthorpe replaced with imports from China, potentially spelling the end of large-scale steel production in the UK.
British Steel, which was bought by China’s Jinji Group in 2020, has been struggling financially, reportedly losing £1m a day. While the company had initially planned to keep blast furnaces running while it built a new electric arc furnace on Teesside – an initiative that would have saved jobs – the revised plan now threatens significant job losses.
Union leaders have expressed their anger, with Charlotte Bramton-Childs of the GMB saying the early closure of the Scunthorpe furnaces would be devastating for both the local community and the workforce. The unions claim they were not consulted on the latest developments and are demanding immediate engagement with British Steel and the government to protect jobs.
The closure comes amid wider concerns about the strategic implications of losing domestic steel production, which plays a crucial role in the UK’s construction, rail and energy sectors. British Steel’s output is vital for projects ranging from nuclear reactors to wind turbines, raising concerns about the UK’s reliance on foreign steel.
Recent talks between Labour and Gingee over a potential bailout have added a political dimension to the issue. Critics, including Kevin Hollenrake, the shadow business secretary, have accused Labour of betraying the UK steel industry by backing a shift towards imported steel, despite promises to invest in domestic production.
The government’s decision on British Steel’s decarbonisation plans and the future of its Scunthorpe operations remains pending, leaving thousands of jobs and the future of the UK steel industry hanging in the balance.