Tata Steel to get £500 million from UK for Port Talbot
Tata Steel announced a revival plan for its UK unit, securing a £500 million grant from the Rishi Sunak government to help fund the transition of the Port Talbot plant to more sustainable technologies.
The announcement marks the end of years-long negotiations between Tata Steel and multiple British governments.
The grant will help the Port Talbot Steelworks, the largest steel plant in the UK, shift to electric arc furnaces. The project is estimated at £1.25 billion, with the rest of the capital expected to be put up by Tata Steel.
The project will also involve Tata Steel's balance sheet being restructured with the potential elimination of the current cash losses in the UK operations and non-cash impairment of legacy investments, the company 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,» said Tata Sons chairman N Chandrasekaran.
«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.»
After approvals, project to be operational in 36 months
Tata Steel's heavy assets at Port Talbot, such as blast furnaces and coke ovens, are reaching the end of their operational life. With emission regulations becoming stricter in the country, the company wants to replace these assets with electric arc furnaces that rely on locally sourced steel scrap and produces lower emissions.
