Tata Steel and the UK government have announced a joint agreement on a proposal to invest in Electric Arc Furnace steelmaking at the Port Talbot site with a capital cost of £1.25 billion (USD 1.54 billion) inclusive of a grant from the UK Government of up to £500 million ($621 million), subject to relevant regulatory approvals.
Tata Steel said the project would bolster UK’s steel security and would be the first major step towards decarbonisation of the local steel industry, reducing direct emissions by 50 million tonnes over a decade.
"The proposed project would ensure continuity of steel making in Port Talbot after the transition, and transform Tata Steel UK into a sustainable, capital-efficient and profitable business. With UK Government support, the project has a robust investment case," read the statement.
"Further to the investment proposal, as part of Tata Steel’s commitment to advance global research and innovation in materials science for a sustainable future, the Company today also announced its intention to invest approximately £20 million over 4 years to set up two additional Centers of Innovation & Technology in the UK at the Henry Royce Institute at Manchester (for advanced materials research) and at Imperial College London (for research in Sustainable Design & Manufacturing)," read the statement.
British PM Rishi Sunak reacted to the development and tweeted: "This investment will modernise and secure a more sustainable future for the UK steel industry."
"It will also protect thousands of skilled jobs in the long-term and help grow the economy," he said.
Tata Steel UK employs over 8,000 people, including at Port Talbot, which would otherwise be under serious threat without substantial investment to guarantee its future.
Tata Steel also supports around 12,500 further jobs in the upstream supply chain.
Commenting on the announcement, Tata Group Chairman N Chandrasekaran said: “The agreement with the UK Government is a defining moment for the future of the Steel Industry and indeed the industrial value chain in the UK. It has been an absolute pleasure to work with His Majesty’s Government and the Honourable Prime Minister Rishi Sunak in developing the proposed transition pathway for the future of sustainable steelmaking in the UK."
"The proposed investment will preserve significant employment and presents a great opportunity for the development of a green technology-based industrial ecosystem in South Wales. We look forward to working with our stakeholders on these proposals in a responsible manner," Chandrasekaran said.
UK Business and Trade Secretary Kemi Badenoch said: "The UK Government is backing our steel sector, and this proposal will secure a sustainable future for Welsh steel and is expected to save thousands of jobs in the long term."