'Devastating' news for South Wales steel town
Tata to close both Port Talbot blast furnaces and cut thousands of jobs
Tata Steel has announced it is cutting 2,800 jobs across the UK and will also close both blast furnaces in Port Talbot.
Most of the job losses are expected to be in Port Talbot, where 4,000 workers are currently employed
The blast furnaces will close this year, to be replaced by an electric arc furnace.
Unions say the plans will be "devastating" for Port Talbot.
Tata's issued a statement. Here are the key highlights
• Tata Steel will now commence statutory consultation on the proposed restructuring plan and support arrangements for affected employees
• Up to 2,800 employees are expected to be potentially affected, out of which around 2,500 roles would be impacted in the next 18 months
• The company will endeavour to maximise voluntary redundancies and proposes to commit in excess of £130 million to a comprehensive support package for affected employees, including redundancy terms, community programmes, skills training and job-seeking initiatives
• This is in addition to the £100 million funding for the Transition Board set up with UK and Welsh governments to support affected employees, contractors and communities
• Port Talbot’s two high-emission blast furnaces and coke ovens would close in a phased manner with the first blast furnace closing around mid-2024 and the remaining heavy end assets would wind down during the second half of 2024. The proposal also includes a wider restructuring of other locations and functions across the company, including the intended closure of the Continuous Annealing Processing Line (CAPL) in March 2025
• In discussion with the UK Steel Committee, Tata Steel has agreed that it would continue to operate the hot strip mill through the proposed transition period and in future. In addition, the downstream and steel processing centres would continue to serve customers by utilising imported semi-finished steel from Tata Steel plants in the Netherlands and India as well as other select strategic suppliers
Under the transformation plan, Tata Steel will embark on a £1.25 billion investment in Electric Arc Furnace technology in Port Talbot and asset upgrades to secure long-term, high-quality production at the UK’s largest steelmaker.
The proposed investment is supported by the UK Government, which has committed up to £500 million to enable the transformation. Tata Steel plans to invest £750 million in the project, alongside funding for a comprehensive support package for affected employees, business restructuring and transition costs as part of its long-term commitment to UK production.
T V Narendran, Tata Steel’s Chief Executive Officer and Managing Director, said: “The course we are putting forward is difficult, but we believe it is the right one. Having invested almost £5 billion¹ in the UK business since 2007, we must transform at pace to build a sustainable business in the UK for the long-term. Our ambitious plan includes the largest capital expenditure in UK steel production in more than a decade, guaranteeing long-term, high-quality steel production in the UK and transforming the Port Talbot facility into one of Europe’s premier centres for green steelmaking.
“We recognise this proposed restructuring would have a major impact on the individuals and communities concerned, whom we will support with dignity and respect. In consultation with our union partners, Tata Steel will offer a comprehensive support package to mitigate the impact of any anticipated job losses, including helping employees to retrain and find new jobs. We will continue our work with the UK and Welsh governments, trade unions and the community to help those who may be affected through the proposed transition.”
Vaughan Gething MS, Minister for Economy
Today’s announcement by Tata Steel UK (TSUK) leaves thousands of workers and their families, in Tata Steel and across the wider supply chain, facing an uncertain future.
TSUK currently employs directly more than 6500 employees in Wales and a further 1500 in the rest of the UK.
The Welsh Government has worked closely with TSUK and the recognised steel trades unions for many years to safeguard these vital jobs and the long-term future of steel production in Wales.
Steel is one of the most important materials in any modern economy and Wales and the rest of the UK are better off and more secure with significant, sovereign steelmaking capabilities.
The Welsh contribution to the UK steel sector is decisive and the industry is part of our nation’s story. It represents an economic strength with global reach and serves as a marker of Welsh excellence.
The scale of the operation at Port Talbot brings together a vibrant mix of cutting-edge skills and specialisms that ought to be understood, promoted and respected at every level of government. The workforce boasts the skills, experience and know-how to unlock an ambitious green transition that exploits new technologies and the enormous demand a low carbon economy will command. Our rapidly changing economy will need more steel and unless UK Ministers and TSUK act together with urgency, less of that steel will be produced in Wales as we become increasingly reliant upon imports.
In choosing not to pursue a modern industrial strategy with steel at its core, the UK Government has damaged our ability to create the long term, reliable growth that would turn net zero measures into more sustainable, green jobs in Wales.
We have repeatedly urged the UK Government to act at scale with the investment needed to support the move to greener methods of steel production and for the Company to lead on a fair and just transition for its workers and those UK companies within its extensive supply chain.
Today’s announcement presents a social and economic body-blow with profound and far-reaching implications for Wales. It is our firm view that the Prime Minister and his cabinet do have levers at their disposal that could prevent the worst case scenario and the scale of economic loss we now face. UK Ministers must now work rapidly in the coming hours and days to convene talks that explore all avenues to bring about a longer, fairer transition that supports a larger, more secure steel industry.
I have raised my concern on the need to act at this level with the Secretary of State for Business and Trade, Kemi Badenoch MP and Minister of State, Nusrat Ghani MP.
It is a matter of deep regret that the UK Government - and in particular the Department for Business and Trade – has to date demonstrated no recognition of the strategic importance of the sector. Unlike previous Business Secretaries, the current UK Secretary of State for Business and Trade has refused to meet with Welsh Ministers at a time of unrivalled uncertainty and risk for the sector. This has allowed opportunities for earlier shared action that could have prevented today’s announcement to be missed.
In September 2023, TSUK and the UK Government finally announced a joint agreement on a proposal to invest in state-of-the-art electric arc furnace steelmaking at the Port Talbot site, with a capital investment of £1.25bn including a grant from the UK Government of up to £500m. The proposals included a restructuring of the existing TSUK business followed by an investment in electric arc technology. The Welsh Government was not party to any discussions around this agreement.
Whilst the announcement contained significant investment for the longer term, it was inevitable that TSUK employees, and their families, became extremely anxious for their jobs and the social impact they and their communities would have to bear should workers lose the dignity of employment. In both direct meetings and public statements, I have cautioned against UK Government Ministers basing assumptions on the worst case scenario because such actions actively undermine negotiations that require space, time and expertise. These requests were not heeded, and I am deeply concerned at the confused and, at times, indifferent approach adopted by the UK Government on this matter.
Today’s announcement has realised the workforce’s fears with the news that around 2,500 jobs could be lost across Tata’s Welsh sites, and this is before the impact on the Company’s supply chain is fully understood.
It is by now clear that the case set out for a future that does not require the scaling back covered in today’s announcement has not been fully explored. A key recommendation, that of operating one blast furnace for a significantly longer period was both economically convincing and underpinned a fair and just transition for TSUK. This proposal highlighted that the Company could have maintained a significant workforce whilst remaining commercially viable. Both TSUK and the UK Government must fully consider the options that exist to maximise the jobs the Port Talbot site can support with a sustainable plan for the future. We are yet to see a compelling account from UK Ministers or the Company that sets out why alternative options are not deliverable.
It is essential that TSUK conducts a meaningful consultation with its employees and the trade unions about their chosen transition course. As Tata Steel has stated, any agreement is subject to relevant regulatory approvals, information and consultation processes, and the finalisation of detailed terms and conditions. We urge the Company not to make any irreversible choices based on the current levels of UK Government support.
Any decision will have a profound impact on TSUK’s supply chain and the wider region, particularly across a manufacturing sector with ambitious plans for maximising the net zero opportunities presented around the Celtic Freeport.
I spoke with trade union representatives and senior management from the Company yesterday. The First Minister requested an urgent call with the Prime Minister to discuss the action that could still be taken to secure a more ambitious future for this important sovereign asset.
The Welsh Government will continue to work closely with the trade unions and the Company to do everything we can to minimise job losses.
I plan to make an Oral Statement regarding this matter on Tuesday 23rd January."
Paul Davies, Chair of the Senedd’s Economy, Trade and Rural Affairs Committee
“Tata Steel’s announcement is devastating news for the community of Port Talbot and everyone in Wales who relies on the industry, including those who work at Tata’s downstream sites in Llanwern and Trostre. Our thoughts in the Senedd are with the workers, their families and the wider community.
“We as a Committee are planning to hold an urgent session, calling in Ministers to get to the bottom of unanswered questions and to get assurances on the support available to people affected.
“Last year the Committee spoke to unions about possible job losses in Welsh steel and we heard about the terrible impact it would have on the plant’s workers, their families and their community, as well as the consequences for the wider supply chain.
“We will do all we can to get answers for those affected.”
Andrew RT Davies MS, Leader of the Welsh Conservatives said
“Today is an incredibly difficult day for Wales, my thoughts are with those steel workers and subcontractors who will be losing their jobs in the coming months and their families. This situation must be handled with care by all decision makers involved - I’m confident that the transition board will achieve this.
“I remain unconvinced that a blast furnace could not be kept open during the transition to the arc furnaces that Tata have agreed to, protecting many jobs in the short to medium term - this needs to be explained fully as to why this hasn’t been done by the company.
“Many thousands of jobs have been protected, with record investment from the UK Conservative Government, the story of Port Talbot Steel is far from over with its sustainable future secured.”
Senedd Members for South Wales West, Dr Altaf Hussain and Tom Giffard
“This news is devastating for our community and for those losing their jobs as a result of this news.
“We welcome the introduction of a UK Government-funded £100m transition fund to help workers and the wider community bounce back from today's announcement. We will be working to ensure that the fund supports those workers and the community over the coming months and years.”