The UK government is close to completing a £500m bailout for Tata Steel’s Port Talbot plant, after its blast furnaces were shut.
The financing agreement, initially developed under the previous government, aims to help Tata Steel shift to a more environmentally friendly production method by building an electric arc furnace to replace the current coal-fired process.
Tata Steel has pledged to invest £750m in the new furnace and provide a support package for staff expected to be made redundant during the transition. The move is expected to result in the loss of around 2,800 jobs as Tata closes two blast furnaces at its plant in South Wales, the first of which stopped operating in July.
Business Secretary Jonathan Reynolds is expected to make a statement to parliament on Wednesday on the deal, although the government has not confirmed whether a formal announcement will be made this week as negotiations with Tata Steel are ongoing.
A Department for Business and Trade spokesperson stressed the importance of the steel industry, saying: “Steel is vital to a vibrant and secure economy. Our steel sector needs a government that works in partnership with trade unions and businesses to ensure a green steel transition that works for the workforce and delivers economic growth. Decarbonisation does not mean de-industrialisation and we will work to protect jobs as part of these negotiations, securing the future of steelmaking communities for generations to come.”
The rescue package underscores the government’s commitment to supporting the steel sector’s transition to greener production methods while protecting jobs and supporting steel industry communities in the long term. Tata Steel has been contacted for comment on ongoing negotiations and potential financing arrangements.
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