Tata Steel has finalized a £500 million grant funding agreement with the UK government to accelerate the installation of a cutting-edge electric arc furnace (EAF) at its Port Talbot steelworks in Wales. This significant investment, part of a £1.25 billion project, represents the largest single investment in the UK steel sector in decades and aims to secure the future of steelmaking in the region, safeguarding 5,000 jobs and ensuring the UK’s steel sovereignty.
The new EAF will significantly impact carbon emissions, reducing the UK’s industrial emissions by 8% and cutting Port Talbot’s emissions by 90%. Additionally, the project will set a new standard in circularity by utilizing UK scrap.
Alongside Tata Steel’s own £750 million investment, the £500 million grant will support the development of essential new infrastructure, including the EAF, ladle metallurgy furnaces, a new coil box, crop shear for the hot strip mill, and related construction and civil engineering works.
With basic engineering completed, Tata Steel is poised to place equipment orders soon. The company has initiated public consultations and is working with authorities to secure planning approvals by November 2024, aiming to start major site work around July 2025. The EAF is projected to be operational within three years.
Despite challenges during the transformation process, Tata Steel’s workforce has shown commendable commitment and resilience. The company has successfully managed the decommissioning of Blast Furnace #5 and Morfa coke ovens and is on track to close Blast Furnace #4 and other heavy-end operations by the end of September. During this transition, supply chain arrangements will ensure continuity of service to customers until the EAF is fully commissioned.
The project is one of the UK’s largest industrial transitions and has been made possible by the collaborative efforts of Tata Steel’s workforce, the UK Steel Committee, and the support of the UK and Welsh governments. Tata Steel has also signed a Memorandum of Understanding with the UK Steel Committee, offering an unprecedented support package for employees affected by redundancy. This includes voluntary redundancy options and a paid re-training scheme for those at risk of compulsory redundancy.
T V Narendran, Tata Steel’s CEO and Managing Director, expressed gratitude for the support received and highlighted the potential of the project to position Port Talbot as a leading center for green steelmaking in Europe. He emphasized the importance of efficient project execution and continued collaboration with government bodies to foster economic regeneration and job creation in South Wales.