LONDON: Britain’s government on Monday raced to secure raw materials to keep the country’s last steelmaking blast furnaces running after passing emergency legislation to take control of British Steel.
Prime Minister Keir Starmer’s government swooped in on Saturday to prevent the closure of British Steel’s main plant in northern Scunthorpe after its Chinese owners Jingye halted orders of raw materials such as coking coal and iron ore.
The Labour-run government must now secure the materials to keep the two blast furnaces at the plant – the last in the UK which makes steel from scratch – running.
Government minister James Murray said officials were at the site on Monday.
“Their role is to make sure we do everything we can to… get those raw materials to the blast furnaces in time and to make sure they continue operating,” Murray told Times Radio.
Other firms including Tata and Rainham Steel have also stepped in to offer help securing supplies, the minister added.
Charlotte Brumpton-Childs from the GMB trade union said she was “wholly reassured” that coking coal bound for the plant will be “paid for and unloaded over the next couple of days” at a nearby shipping terminal.
The “government are working at pace to secure the rest of the raw materials that are currently on the ocean,” Brumpton-Childs told the BBC.
However, Murray and Business Secretary Jonathan Reynolds were unable to guarantee that they would be able to keep the twin furnaces alive.
Blast furnaces are difficult to restart once switched off, and failure to secure enough supplies to keep them running could seriously damage the plant.
“If we hadn’t acted, the blast furnaces were gone and in the UK primary steel production would have gone,” Reynolds said on Sunday.
He also said the UK has been “naive” to allow its sensitive steel industry to fall into the hands of a Chinese company, but said he did not suspect Beijing of involvement in the plant’s near-demise.
Jingye bought British Steel in 2020 and says it has invested more than £1.2 billion ($1.5 billion) to maintain operations, but was losing around £700,000 a day.
Reynolds told the BBC that Jingye had turned down an offer of support of around £500 million, instead requesting more than twice that amount with few guarantees the furnaces would stay open.
The government saw its possible closure as a threat to Britain’s long-term economic security, given the decline of the UK’s once robust steel industry – and the threatened loss of some 2,700 jobs at the plant.
The government takeover stopped short of nationalisation, but officials have indicated that could be the next step.
“We want to find a private sector partner to co-invest,” Murray told Sky News, adding nationalisation remained a “very likely option”.
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