Indian-owned Tata Steel is to cut up to 2,800 UK jobs, it announced on Friday, as the industry struggles to finance greener production of the metal.
Tata said it will shut its “two high-emission blast furnaces and coke ovens” in the Welsh town of Port Talbot this year, delivering a blow to a region already hit hard by deindustrialisation.
“Up to 2,800 employees are expected to be potentially affected” by restructuring at the company, including 2,500 roles over the next 18 months, the company outlined.
A company spokesman told AFP the “vast majority” of job losses would be in Port Talbot, the biggest steelworks in the UK, a country where Tata Steel employs about 8,000 staff.
The European steel industry is confronting major upheaval.
On Thursday, Italy proposed to place a heavily indebted giant steelworks, majority-owned by ArcelorMittal, under special administration in a bid to secure production and thousands of jobs.
The news of the Tata job cuts was greeted with alarm in the industrial town, where virtually all of the local economy revolves around the steelworks.
“It’s more or less a wasteland now,” lamented Robert Jones, on one of the town’s main streets.
“Things will get progressively worse for the town now,” he told AFP.
Fifty-year-old Andrew, who declined to give his last name, worked in the blast furnaces for 30 years.
He told AFP the company should have kept one furnace open or the government should have bought it.
“The young people are going to be more impacted because they have to re-train, find new jobs,” he said.
Towards the end of last year, the UK government provided £500 million ($634 million) to fund the production of “greener” steel at the Welsh plant, while saying that 3,000 jobs were still at risk.
– ‘Workers on scrapheap’ –
“The course we are putting forward is difficult but we believe it is the right one,” Tata Steel’s chief executive T. V. Narendran said in Friday’s statement.
“Our ambitious plan includes the largest capital expenditure in UK steel production in more than a decade, guaranteeing long-term, high-quality steel production in the UK and transforming the Port Talbot facility into one of Europe’s premier centres for green steelmaking.”
The facility 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.
“We are determined to secure a sustainable and competitive future for the UK steel sector,” the UK government said on Friday.
As well as climate fallout, the steel sector saw costs soar when energy prices surged in the wake of Russia’s invasion of Ukraine.
Prime Minister Rishi Sunak acknowledged the “very worrying time for employees and their families”, his spokesperson said on Friday.
Tata Steel had threatened to shut the plant unless it received state aid to help decarbonise production and cut pollutant greenhouse gas emissions.
The job cuts followed talks with unions aimed at protecting employment.
“It’s unbelievable any government would give a company £500 million to throw 3,000 workers on the scrapheap,” British steel unions said a joint statement on Friday.
“The German, French and Spanish governments are all committing billions to secure the future of their strategically important steel industries and our government must show similar ambition.”
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 percent.
Experts have said “green” hydrogen could help the massively polluting steel industry but producing the cleaner form of energy in large enough quantities requires significant investment.
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