LONDON (Reuters) — Britain is to pump 500 million pounds ($621 million) into Tata Steel (TISC.NS) to decarbonise its Welsh site, in a deal aimed at securing the future of the country’s steel industry but which puts as many as 3,000 jobs at risk.
The 1.25 billion pound total funding package for Britain’s biggest steel works includes 750 million pounds investment from Tata to pay for the switch to lower-emission electric arc furnaces from current coal-powered methods.
Britain said Friday’s deal would help to safeguard 5,000 jobs, but Tata Steel UK currently employs more than 8,000 people, raising the prospect of 3,000 redundancies, as the lower-carbon electric furnaces are less labour intensive.
Business and trade minister Kemi Badenoch said the deal was the right thing for Britain and the workforce overall.
“We are saving jobs which would have been lost, without this investment we would probably have seen the end of steelmaking certainly in this part of the country,” she told reporters.
India-owned Tata Steel had long warned that without government help it could close the Port Talbot site.
Britain said the new electric furnaces would cut the country’s total carbon emissions by around 1.5%, noting that Port Talbot is the biggest single carbon emitter.
