New electric furnace could bring Teesside's steelmaking heritage back
British Steel has announced plans worth £1.25bn
Last updated 6th Nov 2023
Dreams of bringing Teesside’s steelmaking heritage back to life look set to be realised as plans for a new furnace at Teesworks were officially confirmed.
British Steel wants to build an electric arc furnace next door to its Beam Mill at Lackenby in Redcar alongside the site of the former Blast Furnace. The firm, owned by China’s Jingye Group, has selected the area, as well as Scunthorpe, for a new generation of furnaces which use greener technology to melt scrap and produce new steel.
The radical announcement comes eight years after the closure of Redcar Steelworks. The collapse of steelmaker SSI UK brought to an end 170 years of steelmaking and had a devastating impact on communities with more than 3,000 workers losing their jobs.
The latest multi-million pound investment for Teesworks will bring back basic steel production, linking with the Beam Mill and Special Profiles plant at Skinningrove which process steel for industrial uses. Between 250 and 300 direct jobs will be created with thousands more expected in the supply chain and construction.
Announcing the news, Tees Valley Mayor Ben Houchen, said: “As Teessiders, we know that steel is in our blood – and the closure of our steelworks was a historic injustice which needed to be addressed. But with the construction of a new electric arc furnace we will see Teesside restored to its rightful place as a global leader in the steel industry, delivering well-paid jobs and investment for now and future generations.
“This project would not have happened without our Joint Venture partners, who have been essential in delivering this once-in-a-generation investment.” A planning application is due to be submitted to Redcar and Cleveland Council in mid-November, with construction expected to begin in mid-2024 and the plant scheduled to start operating in 2025.
Electric furnaces generate heat from an electric arc between electrodes, as opposed to blast furnaces which mostly use coke to supply energy necessary to heat up the metal. They can also use a variety of iron forms which do not need a blast furnace.
Teesworks CEO Martin Corney said: “This announcement is excellent news for Teesworks and for the people of Teesside. It is the direct result of a huge amount of hard work – including demolition and land preparation – to deliver a site where investors can move quickly and huge projects can be brought forward, delivering jobs and investment.”
Cllr Alec Brown, Leader of Redcar and Cleveland Borough Council, said: “British Steel’s decision to expand its operation in Redcar and Cleveland is fantastic news and will bring high quality jobs to a borough which has a long and distinguished history of steelmaking. We have been working behind the scenes with key personnel from British Steel and its parent company, Jingye Group, to provide an environment which encourages the kind of investment announced today.
“The closure of the Redcar blast furnace was a huge blow to both our borough and the wider region, but British Steel has continued to invest in its operations and workforce at both Lackenby and Skinningrove. The expansion at Lackenby is a real demonstration of faith in Redcar and Cleveland and its residents who provide the unique skills and commitment which will ensure the ongoing success of steelmaking in our borough.”
Unions predict the move could ultimately lead to the loss of 1,500 to 2,000 jobs, predominantly at Scunthorpe, as the new furnace would replace two blast furnaces and require fewer workers to operate it. British Steel says it has started preliminary talks with trade unions about electrification, and has promised to support employees affected by the plans.
British Steel CEO and President, Xijun Cao, said: “Decarbonisation is a major challenge for our business but we are committed to manufacturing the home-made, low-embedded carbon steel the UK needs. We have engaged extensively with the public and private sector to understand the feasibility of producing net zero steel with our current blast furnace operations.
“However, thorough analysis shows this is not viable. Detailed studies show electrification could rapidly accelerate our journey to net zero and drive British Steel towards a sustainable future.
“It would also ensure we can provide our customers with the steel they require. Our owners, Jingye, have already invested £330 million in British Steel in just 3 years and they’re committed to the unprecedented investment our proposals require.”
Jobs are expected to be impacted at Scunthorpe as the new furnace would replace two blast furnaces and require fewer workers to operate it. British Steel says it has started preliminary talks with trade unions about electrification, and has promised to support employees affected by the plans.
British Steel CEO and President, Xijun Cao, said: “Decarbonisation is a major challenge for our business but we are committed to manufacturing the home-made, low-embedded carbon steel the UK needs. We have engaged extensively with the public and private sector to understand the feasibility of producing net zero steel with our current blast furnace operations.
“However, thorough analysis shows this is not viable. Detailed studies show electrification could rapidly accelerate our journey to net zero and drive British Steel towards a sustainable future.
“It would also ensure we can provide our customers with the steel they require. Our owners, Jingye, have already invested £330 million in British Steel in just 3 years and they’re committed to the unprecedented investment our proposals require.”
Further reaction to British Steel announcement
Simon Clarke, MP for Middlesbrough South and East Cleveland, said: “This announcement is massive news for our local economy, and secures the future of British Steel’s excellent existing Special Profiles division at Skinningrove far into the future. Steel is in our blood on Teesside, and this isn’t just about hundreds of jobs, it’s about our whole identity as a region.”
Jacob Young, Conservative MP for Redcar, said: “This investment by British Steel is a testament to the hard work of people like Ben Houchen and my Conservative Teesside colleagues who have supported the regeneration of Teesworks every step of the way and have been instrumental in turning this vision into a reality. More than that, this moment is a testament to the enduring spirit and resilience of Teesside – a region that simply will not stay down. We have an identity long forged with the fires of industry, and today’s announcement represents a legacy that will now continue into a new age, one of sustainable manufacturing and clean industry.”
Labour Parliamentary candidate for Redcar, Anna Turley said: “Everyone welcomes this news which is a real sign of confidence in the
quality of our workforce and the steel heritage we have here on Teesside. Many of us pushed for the switch to electric-arc furnaces in 2015 as part of a comprehensive plan to save the original works, which was sadly abandoned and ignored by the Tories in an act of industrial vandalism.
“But today’s announcement is an important signal that our steel industry here on Teesside has a modern and sustainable future as we move to Net Zero and a new, green industrial renaissance on the banks of the river. This investment today needs to be part of a sustainable strategy that secures the future for steel in this country with British-led investment and manufacture, so we won’t have to rely on Chinese state-owned companies in future.”