India-based Tata Steel owns the UK’s largest steelworks of 3 million tonne per annum (MTPA) at Port Talbot in South Wales and employs around 8,000 people across all its operations in that country…reports Asian Lite News
Tata Steel, a subsidiary of Tata Group, is laying off around 2,500 workers at its UK operations as it transitions greener steelmaking process. The company’s CEO T V Narendran said the loss of the UK site, which is in a transition phase, is “inevitable.” The workers’ unions are, meanwhile, criticising the fear of job cuts and continuously protesting against the company in the UK, as per PTI report.
India-based Tata Steel owns the UK’s largest steelworks of 3 million tonne per annum (MTPA) at Port Talbot in South Wales and employs around 8,000 people across all its operations in that country.
As part of its decarbonisation plan, Tata Steel is transitioning from traditional blast furnace steelmaking route to a more eco-friendly low-emission electric arc furnace (EAF) process. While this reduces carbon emissions by 5 million tonnes annually, it also requires fewer workers.
Narendran said the shift to EAF with UK government aid will make the company competitive in terms of reduced production costs, and also help in reducing 5 million tonnes of Co2 per year.
“But all this involves 2,500 job losses and that is what the unions obviously are not happy with. And that’s a conversation going on with the unions to how we can do it in a smooth as possible way. It is inevitable,” he said.
Earlier in September last year, Tata Steel and the UK government jointly agreed on a proposal to invest in state-of-the-art Electric Arc Furnace steelmaking at the Port Talbot site with a capital cost of £1.25 billion inclusive of a grant from the UK government of up to £500 million to execute decarbonisation plans at Port Talbot steel making facility in Britain.
Giving updates on the UK, Narendran further said the coke ovens were already closed in March. One blast furnace will close in June because it is operationally struggling, and the second blast furnace will close in September for reasons of asset quality as well as for reasons of financial bleed.
“We want to transition to EAF production because the UK has a lot of steel scraps. It is one of the few countries which is a big exporter of steel scraps. So, it makes sense to use scrap available in the UK to make steel in the UK to sell to customers in the UK, as compared to importing iron ore and coal from all over the world,” the Tata Steel UK business CEO said.
“Making steel through EAF process will make Tata Steel competitive by at least USD 150 a tonne. So, the UK business, which has traditionally lost money for the company, can become EBITDA positive and cash neutral once completion of this transition,” he said as quoted by PTI.
The CEO had earlier mentioned that Tata Steel aims to complete decarbonisation journey at its plant in the UK in next three years.
Tata Steel UK annual revenues were 2,706 million pounds and EBITDA loss stood at 364 million pounds. Liquid steel production was 2.99 million tonnes while deliveries stood at 2.80 million tonnes.
For the January-March quarter, revenues were 647 million pounds and EBITDA loss stood at 34 million pounds.
Tata Steel on Wednesday reported a 64.59 per cent decline in its consolidated net profit at Rs 554.56 crore for the January-March quarter of 2023-24 on lower realisations and expenses on certain exceptional items.
The steel major had posted a profit of Rs 1,566.24 crore in the year-ago period.
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