Tata Steel seals deal with UK government over £500-million grant funding for green steel project

India steel major Tata Steel has signed the deal with the UK government for the green steel project in Port Talbot. Under the project, which is worth  £1.25 billion, the UK government had previously agreed to grant £500 million. The company has claimed the project will be operational within three years and is expected to preserve 5,000 jobs.

The £500 million of support for the steelworks was agreed by the last Conservative government, led by Rishi Sunak. The newly formed Labour administration has added a few more clauses for the employees. 

"The new and improved deal goes much further than the previous government’s agreement – delivering a minimum voluntary redundancy payout of £15,000 for full-time employees plus a £5000 ‘retention’ payment and offering paid-for training to give workers a steady income and upskill them for the jobs of the future," UK business secretary Jonathan Reynolds  in a separate announcement. 

"I would like to thank the UK Steel Committee and various departments of the UK and Welsh governments for their support in reaching this agreement. We now look forward to the efficient and speedy execution of the EAF project," said Tata Steel Managing Director TV Narendran.

Last year, Tata Steel agreed on a restructuring plan that involves the replacement of blast furnaces at its Port Talbot unit with electric furnaces to utilize recycled steel, in a move to decrease carbon emissions. This transition to a low-emission system will regrettably lead to the displacement of 2,800 jobs, as electric furnaces necessitate fewer manpower resources. Tata Steel has stated its commitment to providing a substantial support package to departing employees, along with a comprehensive voluntary redundancy process featuring options for re-skilling or alternate employment opportunities.

Recent announcements from Tata Steel revealed the impending closure of the two remaining blast furnaces as part of plans to shift production to a new electric furnace. One of the furnaces has already ceased operations, while the other is scheduled to conclude production by the end of this month.