Government signs deal for Tata furnace go-ahead

Coupled with the company’s own £750 million investment, the money will ensure the introduction of the new Electric Arc Furnace at the South Wales site.

UK Steel Director General Gareth Stace commented: “The steel sector wants to remain a pillar of the UK’s economy and today’s grant funding agreement between Tata Steel and the Government means our steel sector can have a brighter future.”

He added that the £1.25 billion funding from the two parties represented one of the biggest investments ever seen in the UK steel sector.   

“We now have a government that understands the issues facing our industry and crucially is committed to taking decisive action and today it has done just that,” stated Stace.

While the domestic industry is under pressure from global and market trends, the health of the steel sector will directly impact industrial infrastructure development.

The UK government has already earmarked £2.5 billion for steel in its National Wealth Fund manifesto commitment to encourage investment in the UK’s steel industry.

Analysis by UK Steel, released this month, suggested UK steel producers pay up to 50% more than French and German, amounting to an extra £37 million to sector costs. Use of electric arc furnaces is likely to double the sector’s electricity consumption alone.

Stace remarked: “To ensure that their significant investment yields returns for our nation, government must now also deliver the right business environment. Steel businesses need competitive electricity prices, access to good quality steel scrap, and fair competition from international trade”. 

Pic: Electric arc steel furnace –  Shutterstock (Nordroden)