The owner of the steelworks in Port Talbot is getting ready to defend their choice of reducing numerous positions at the plant in south Wales. They may also mention the potential for creating additional jobs in the UK in the future during their testimony to members of parliament this week.
This month, Tata, a conglomerate based in India, announced that it intends to shut down two blast furnaces at Port Talbot, resulting in the loss of up to 2,800 positions. There is also the possibility of an additional 300 job cuts at another location, Llanwern.
Criticism has been directed toward both the company and the government by MPs and unions, who believe that increased investment and state assistance could have prevented job loss.
Tata Steel’s top executives, TV Narendran and Rajesh Nair, will be meeting with the Welsh affairs committee on Tuesday to discuss the effects of the company’s actions on the local community, the economy of Wales, and the future of the steel industry in the UK.
The announcement from Tata to shut down their blast furnaces, along with a similar decision from Chinese-owned British Steel in Scunthorpe, has sparked concern among members of Parliament as it would mean that the UK would no longer have the capability to produce primary steel directly from iron ore.
Over the weekend, Tata Steel sent a document to its employees and the government, which was also viewed by the Guardian. In the document, the company aimed to verify information stated in media coverage of its decision, stating that it had been portrayed in a deceptive manner.
Tata may state that it is receptive to investing in a new facility for producing direct reduced iron (DRI). This technology utilizes methane or hydrogen to create iron, which would then be utilized in the new electric arc furnaces.
The major benefit of the DRI process is its ability to create carbon-free steel, making it a crucial component in efforts to reduce carbon emissions. According to Tata, it could also save approximately 200 jobs at Port Talbot, although thousands would still be affected.
The statement stated that Tata Steel is willing to consider additional investments, specifically in a direct reduced iron (DRI) plant, if the appropriate investment and policy climate are present. They will assess the feasibility of a potential DRI plant in the UK and may pursue it if the business conditions are favorable and if the government offers support for further investments in the future.
The document also explicitly mentions the possibility of a Labour administration, stating that the company is willing to consider additional investments in the future. However, their main priority is to make the Port Talbot plant profitable before pursuing further investments. In response, Labour has proposed a £3bn investment in the steel industry and is actively exploring the potential of hydrogen steelmaking.
Some politicians, particularly local MPs, may view with doubt the idea of providing Tata with additional subsidies in the hundreds of millions of pounds. This comes after the company recently received around £1bn in pledged support. Half of this amount will go towards aiding Port Talbot’s transition to electric arc furnaces, which will allow for the creation of new steel using the UK’s surplus scrap metal. The remaining funds will assist Tata, which is also the owner of Jaguar Land Rover, in constructing a gigafactory for producing batteries for electric cars.
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The executives of the company assert that Tata has been a very patient investor in the UK steelworks, which they acquired in 2007. However, they also state that the company has not generated any profits or dividends.
The document clearly outlines the main points that Narendran and Nair plan to present during the committee hearing. In addition, the committee will also receive testimony from Vaughan Gething, the economy minister for the Welsh government, and representatives from the Community, GMB, and Unite unions.
Tata intends to bring in partially processed steel slabs from locations in India and the Netherlands prior to the planned completion of their electric arc furnace in 2027. The GMB is predicted to make a case that the steel being imported during the construction of the EAF is likely to have a significant amount of carbon, even without considering the emissions produced during transportation to the UK.
In the past, the unions have voiced their disapproval towards Tata for promoting their efforts to reduce emissions in the UK, while simultaneously constructing a new, environmentally harmful blast furnace in Kalinganagar, their home country of India.
Source: theguardian.com
