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In a move that could potentially secure the short-term future of the Scunthorpe steelworks, British Steel has recently secured a five-year contract with Network Rail worth £500m. The contract involves supplying more than 337,000 tonnes of train tracks, which in turn will help to safeguard thousands of jobs. This development comes two months after the government utilized emergency powers to prevent the immediate closure of the plant’s blast furnaces after accusing Chinese firm Jingye, which acquired British Steel in 2020, of intending to shut down the furnaces.
British Steel expressed that the new contract signifies a “huge vote of confidence in UK workers and British industry.” The company has a longstanding history of supplying railway tracks to Britain, with rail being produced in Scunthorpe since 1865. The latest deal ensures guaranteed work for the plant for the next five years, with the contract set to commence on 1 July. Additionally, British Steel will continue to supply 80% of Network Rail’s track needs, while European steelmakers will provide “specialist rail products” alongside.
Clive Berrington, Network Rail’s director for railway business services, emphasized the company’s commitment to buying British where it makes economic sense. He declared that British Steel remains highly competitive in rail provision and will remain the main supplier in the years ahead. Craig Harvey, the commercial director for rail at British Steel, highlighted how the agreement underscores the firm’s significance to the UK’s economy and infrastructure.
The uncertainty surrounding the UK’s steel industry has been a prevalent concern in recent years, with the closure of blast furnaces in Port Talbot scheduled for 2024. US tariffs targeting steel imports have also posed threats to businesses. While the UK managed to avoid the impact of President Donald Trump’s executive order doubling steel tariffs from 25% to 50%, the anticipated lifting of charges on steel imports was not included in a recent executive order signed by Trump. This development comes at a crucial time as the government aims to strengthen domestic manufacturing and supply chains to drive economic growth
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