British Steel is set to close its blast furnaces in Scunthorpe by the end of the year, placing 2,500 jobs in jeopardy. The move comes as the Chinese-owned company seeks to accelerate its transition to greener steel production, despite having received £600 million in taxpayer support.
The company is in talks with the UK government to cut coking coal imports, originally planned to continue for another two years, as part of its £1.3 billion decarbonisation strategy. This could lead to the replacement of the three million tonnes of steel produced in Scunthorpe with imports from China, potentially signalling the end of large-scale UK steel production.
British Steel, purchased by China’s Jingye Group in 2020, has been struggling financially, reportedly losing £1 million per day. While the company had initially planned to keep the blast furnaces operational during the construction of a new electric-arc furnace in Teesside—an initiative that would have preserved jobs—the revised plan now threatens significant job losses.
Union leaders expressed their outrage, with Charlotte Brumpton-Childs of GMB stating that the early closure of the Scunthorpe furnaces would be devastating for both the local community and the workforce. Unions claim they were not consulted about the latest developments and are demanding immediate engagement with British Steel and the government to safeguard jobs.
The closure comes amid broader concerns about the strategic implications of losing domestic steel production, which plays a crucial role in the UK’s construction, rail, and energy sectors. British Steel’s output is vital for projects ranging from nuclear reactors to wind turbines, raising concerns about the UK’s reliance on foreign steel.
Labour’s recent talks with Jingye over a potential rescue deal have added a political dimension to the issue. Critics, including Kevin Hollinrake, the shadow business secretary, have accused Labour of betraying the UK steel industry by supporting the shift towards imported steel, despite promises to invest in domestic production.
The government’s decision on British Steel’s decarbonisation plans and the future of its Scunthorpe operations is still pending, leaving thousands of jobs and the future of UK steelmaking hanging in the balance.