British Steel, owned by Jingye, is
nearing a rescue deal with the UK government that could unlock hundreds of
millions of pounds in taxpayer aid.
Jingye has appointed PwC to assist in finalizing a business plan
and negotiations over state aid, signaling its commitment to British Steel’s
long-term future.
The
rescue plan includes investing billions of pounds into transitioning to greener
forms of production over the coming years. While the exact amount of taxpayer
aid has yet to be finalized, Jingye is reportedly seeking up to £600 million in
UK subsidies.
British Steel, which employs 4,500 people in
the UK, was acquired by Jingye out of insolvency in 2020. Concerns have
persisted about its long-term plans, particularly regarding the state of its
finances and the need to invest in its blast furnaces.
Jingye
began discussions with ministers 18 months ago about financial aid to
transition to electric arc furnace (EAF) production. The plan involves
splitting future production between its current works in Scunthorpe and a new
site at Teesside, marking a return of steelmaking to Teesside for the first
time since 2015.
While the
switch to EAF production may lead to job losses, Jingye is considering
proposals to keep its blast furnaces running in Scunthorpe while it builds its
two EAFs, potentially limiting forced redundancies.
Kemi
Badenoch, the business secretary, visited British Steel’s works in Scunthorpe
and the proposed plant in Teesside, indicating government support for the plan.
Local authorities have already granted planning permission for the Teesside
site.
British
Steel remains confident that its proposals, with appropriate support from the
UK government, will secure low-embedded-carbon steelmaking and thousands of
jobs while meeting the steel needs of the UK for generations to come.