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tata steel: Tata Steel to get £500 million from UK for Port Talbot


Tata Steel announced a revival plan for its UK unit, securing a £500 million grant from the Rishi Sunak government to help fund the transition of the Port Talbot plant to more sustainable technologies.

The announcement marks the end of years-long negotiations between Tata Steel and multiple British governments.

The grant will help the Port Talbot Steelworks, the largest steel plant in the UK, shift to electric arc furnaces. The project is estimated at £1.25 billion, with the rest of the capital expected to be put up by Tata Steel.

The project will also involve Tata Steel’s balance sheet being restructured with the potential elimination of the current cash losses in the UK operations and non-cash impairment of legacy investments, the company said.
“The agreement with the UK government is a defining moment for the future of the steel industry and indeed the industrial value chain in the UK,” said Tata Sons chairman N Chandrasekaran. “The proposed investment will preserve significant employment and presents a great opportunity for the development of a green technology-based industrial ecosystem in South Wales.”

Tata Steel to Get £500M from UK for Port Talbot

After approvals, project to be operational in 36 months
Tata Steel’s heavy assets at Port Talbot, such as blast furnaces and coke ovens, are reaching the end of their operational life. With emission regulations becoming stricter in the country, the company wants to replace these assets with electric arc furnaces that rely on locally sourced steel scrap and produces lower emissions. UK aims to achieve net zero on carbon emissions by 2050.The company’s UK operations have also been losing money due to the inherent cost inefficiencies in the UK like high energy costs.

Citing these reasons, the company had threatened to shut operations in the UK if it failed to reach agreement with the Sunak government over state grants. Such a closure would have seen thousands of job losses in the country and the UK becoming reliant on imports for a primary raw material like steel.

The investment in this project is one of the largest in the UK steel industry in recent years.

The 3 million tonne electric arc furnace being planned at Port Talbot is expected to lower carbon emissions by about 5 million tonnes each year.

Earlier discussions with the UK government indicated that it would cover only about a fifth of the costs, compared with the two-fifths it will now be bearing.

Once approvals are in place, the project is likely to be operational in about 36 months, the company said. “With the support of the UK government and dedicated efforts of the employees of Tata Steel UK along with all stakeholders, we will work to transform Tata Steel UK into a green, modern, future-ready business,” said TV Narendran, Tata Steel chief executive officer and managing director.

Asia’s oldest steel-maker had entered the UK market in 2007 after the acquisition of the Corus Group, but the operations have been a drag on the company at a consolidated level for several quarters due to weak demand and the high cost of operations.

Port Talbot currently has the capacity to produce 5 million tonnes of steel each year. Tata Steel UK incurred losses of over ₹6,700 crore in FY23. The announcement follows the Tata Group unveiling a £4 billion investment to build a 40GW battery cell gigafactory in the UK. Jaguar Land Rover (JLR) and its parent Tata Motors will be anchor customers, with supplies starting in 2026, the group had said in July.


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