British Steel, owned by China's Jingye Group, has announced plans to close its blast furnaces in Scunthorpe, a move that could potentially lead to the loss of 1,500 to 2,000 jobs. The company intends to replace the existing furnaces with two electric arc furnaces, one at Scunthorpe and one at Teesside, as part of a £1.25bn proposal to transition towards greener production methods. The new furnaces, which recycle scrap steel using clean electricity, are expected to be operational by late 2025.
The company's plans are contingent on securing financial support from the UK government. British Steel is seeking up to £500m in government funding, a figure that matches the support given to Tata Steel, its only UK rival. The government's Department for Business has indicated that the proposals are part of a plan involving taxpayer support of up to £500m for British Steel.
The transition to electric arc steelmaking is expected to start in 2025, delaying job losses for at least two years. However, unions and some MPs have expressed concerns about the move, citing the inability of electric arc furnaces to create steel from iron ore and the potential impact on the UK's ability to produce primary steel products. Unions have also warned that the UK's steel industry could be left exposed to international markets.
The TUC General Secretary and other union representatives have called for a halt to the plans, expressing concerns over the impact on workers and the local community. The government has offered a support package of between £300m and £500m, but the final decision on the proposal is yet to be made.