Tata ‘needs £1.5bn in subsidies’ to keep Port Talbot steelworks open

theguardian.com:

The owner of the UK’s largest steelworks has reportedly said it needs the government to agree to provide £1.5bn in subsidies in the next year to help it transition to greener production methods or it will have to look at site closures.

India’s Tata group owns the vast Port Talbot steelworks in south Wales, which employs about 3,500 people and is one of only two in Britain capable of turning iron ore and coal into molten iron and steel. Overall, the group’s subsidiary Tata Steel UK (TSUK), which earlier this week reported its first annual profit since 2009, employs about 8,000 staff in the UK.

The company has been in protracted talks with the government about co-investing to convert Port Talbot’s two blastfurnaces into electric arc furnaces, which produce much lower carbon emissions.

The talks had originally focused on Tata attempting to negotiate about £500m in government funding. However, the Financial Times reports the company is seeking as much as half of the £3bn cost of the conversion and decommissioning process.

“A transition to a greener steel plant is the intention that we have …  But this is only possible with financial help from the government,” Natarajan Chandrasekaran, the chair of Tata Group, told the FT.

“We have been in discussions over the last two years and we should come to an agreement within 12 months. Without this, we will have to look at closures of sites.”

The decarbonisation plans would include the closure of the two blastfurnaces, which would stop primary steelmaking, as the two electric arc furnaces are built. Tata wants to begin the conversion process in 2025.

Unions fear job losses, given it takes about two years to build an electric arc furnace, and they require fewer workers.

“Our steel members have