Tata Steel is negotiating with the UK government for £500 million to help transition the Port Talbot plant's blast furnaces to electric arc furnaces, raising questions about political motivations ahead of an upcoming general election.
Tata Steel is in talks with the UK government to acquire £500 million in funding. The steelmaking multinational confirmed the funds would help the Port Talbot plant replace its operating blast furnaces with electric arc furnaces. The news comes as the Tata Steel share price recently reached a high for the year.
One official at Port Talbot told MetalMiner that the financing talks are taking place at the “highest levels.” This means the collaboration is between Tata Group itself and the Prime Minister’s office. “That’s lasted for a few years,” the official added, though he declined to indicate when talks would conclude. Port Talbot is in Wales, about 75 kilometers west of the capital city of Cardiff. Tata also plans to invest about £700 million of its own funds into the facility.
The Port Talbot official also declined to indicate with what the plant would replace its two operating blast furnaces. There was also no discussion of potential capacities, the number of electric arc furnaces, or if it would add value-added equipment, such as thin slab casters.Port Talbot’s two blast furnaces can produce about 4.8 million metric tons of pig iron per year. Meanwhile, its two basic oxygen furnaces can pour 5 million metric tons of crude steel per year.
However, one industry watcher expressed skepticism about funding from the UK government. “That’s big money for the government and for the taxpayers,” that source told MetalMiner.
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