British Steel, owned by China’s Jingye Group, has announced that it will close down its blast furnaces in Scunthorpe, a move which could threaten up to 2,000 jobs. The company plans to replace them with two electric arc furnaces, one in Scunthorpe and the other in Teesside. The construction period for the new furnaces is expected to take between two to three years. British Steel has announced its plans as part of its strategy to convert into a “green and sustainable company.” It said that shutting down the blast furnaces was necessary to sustain the business and adapt to changing environmental regulations.
Sources from the Department for Business claim that the plans are associated with a package of taxpayer support of up to £500m for British Steel, reflecting a similar support package agreed for rival Tata. Tata declared earlier in the year that it would close its blast furnaces in Port Talbot and replace them with electric arc furnaces. The decision would result in a potential loss of up to 3,000 jobs. The UK Government released a statement saying that the blast furnaces are currently uneconomic and unsustainable for financial and environmental reasons.
Unions are anxious about the timescale of moving away from the blast furnaces and have threatened industrial action. Even though electric arc furnaces run at lower temperatures and can be powered by renewable energy, they can only melt down and repurpose scrap steel. The final product is not of a similar quality to the blast furnace steel and is not suitable for all industrial purposes in companies such as motor manufacturing and construction.
British Steel refuted claims about jobs and stated that it was fully committed to providing long-term, skilled, and well-paid careers for thousands of staff, as well as those employed in the company’s supply chains. The government has acknowledged that the closure of blast furnaces in Scunthorpe and Port Talbot will lead to the UK losing its ability to make “virgin steel.” However, they added that the output of electric arc furnaces meets most of the UK’s requirements and there is limited demand in the home market for virgin steel
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