British Steel has announced it will close coke ovens at its Scunthorpe plant, jeopardizing 260 jobs.
The Chinese steelmaker said the move was necessary because UK steel production is “uncompetitive” due to high energy, carbon and labor costs.
The company said “decisive action” was needed due to “unprecedented increases” in its energy and carbon bills, which rose by £190m last year.
Coke ovens produce the fuel needed to ignite steelmaking blast furnaces, which produce new steel at the plant. The owner, Jingye Steel, wants to replace the existing furnaces with more environmentally friendly electric arc furnaces that recycle scrap metal.
A similar deal is currently being discussed with Tata Steel UK, owner of Port Talbot in Wales, to upgrade their blast furnaces to low carbon electric arc furnace models.
Unions have warned that the move could potentially result in the loss of thousands of jobs at Scunthorpe and other steel companies in the UK. British Steel said earlier this month that up to 1,200 jobs could be at risk, mostly at its Scunthorpe plant. Unione Unite has announced that it will challenge the cuts.
Alan Davies of the Community Union, representing the steel workers, said the union would “not accept layoffs” and warned that plant closures “could be disastrous for employment and steel production in Scunthorpe and the UK in general”.
British Steel CEO Xifeng Han announced the news: “Steel is vital to today’s economy and as demand is expected to rise over the coming decades, British Steel will play a critical role in ensuring the UK has its own supply of high quality steel. .
“To ensure we can supply the steel Britain needs, we are going through the biggest transformation in our 130 year history.
“To support the move to zero, our owners, Jingye, have invested £330 million in capital projects in their first three years of existence and continue to invest unprecedented amounts of money in British Steel.
“Jingye is committed to our long-term future, but decarbonization is a major challenge for our business and, like most companies, we are facing major challenges due to the economic downturn, rising inflation and exceptionally high energy prices.
“Last year, for example, our electricity bills rose by £120m, while we also saw our annual carbon bills increase by over £70m.
“We have taken steps to reduce costs under our control; However, UK steel production remains uncompetitive compared to other international steel producers.”
“Our energy costs, carbon footprint and labor costs are among the highest in the world and we cannot directly influence them.”
The announcement came as government officials who were reportedly negotiating a financial support package of up to £300m to help British Steel move to greener mild steel production were reportedly on their way to China to announce leaders for discussing proposals with high-ranking officials. leaders.
Unions say the deal has stalled because the government insists it is bound by a promise not to cut jobs at the factory. The amount of public assistance offered would also be small compared to the estimated £2bn cost of switching to greener forms of steel production.
Jingye said yesterday that the company is “extremely grateful for his support.”
“It is important that we have the right policies and structure in place to support our ambition to be a clean, green and prosperous business, and we will continue to discuss this with the government.
“We are committed to working together and producing the steel we own that Britain needs for generations to come.
“In order to build a secure future for British Steel and protect skilled and well-paid careers for thousands of employees and many others in our supply chain, we, like many companies, offer to optimize our business.
“We are disappointed to have to make such proposals, but we are confident that they will support a successful transformation.”
Unite General Secretary Sharon Graham said: “British steel workers are facing a toxic combination of a greedy employer that does not deliver on its investment promises and a chaotic UK government that does not have a serious plan for the industry. The Unite members at British Steel know they will fight this and their union has their full support.”
Martin Foster, chairman of Unite at British Steel, urged the company to “breathe”.
“Let’s not rush into this. We understand the problems with coke ovens and why they want to close them. We expected this at some point, but it’s too early or we think it happened too soon,” he said.
“We think they should just take a step back, take a deep breath and think about it for a very, very long time. Do you really have to do it so fast, in such a hurry?”
Shadow Labor Secretary Jonathan Reynolds called it “even more disturbing news for our steelworkers.”
“Steel is the backbone of many communities in the UK. It is the foundation on which our manufacturing sector is built, critical to any zero-emissions ambition and the beating heart of our sovereign capabilities,” he said.
Shadow Chancellor Rachel Reeves said: “It’s really disturbing. The steel workers deserve to have the government on their side.” She said Labor would work with industry to invest in the new technology needed “to keep well-paying steel industry jobs in the UK for decades to come”.
Source: I News
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