Tata boss '100% committed' to building electric arc at Port Talbot plant

  • The Tata CEO spoke to ITV Wales about the recent decision to shut down its blast furnaces.

The boss of Tata Steel has said he is "100% committed to building an electric arc" at the Port Talbot site after a "very difficult day" for those whose jobs are at risk.

Thachat Viswanath Narendran told ITV Wales he "fully empathises" with those impacted by the company's decision to shut down its blast furnaces at the south Wales site, putting nearly 3,000 jobs at risk UK-wide.

He said he was committed to building an electric arc so that the business is "not always at the edge of a cliff".

The Tata CEO acknowledged the announcement to "not press ahead" with the Union-Plan would be "disappointing" for those behind it, but said continuing in the same vein was “no longer an option”.

The move comes in a bid to reduce its UK CO2 emissions by “5 million tonnes per year”. Credit: PA images

Tata issued a full statement following its announcement outlining the reasons behind its decision. The first, to offset financial losses - the steel giant saw losses of around £551m, during the last quarter of last year.

The company also wants to turn to greener methods of steelmaking in a bid to reduce its UK CO2 emissions by “5 million tonnes per year” and reduce the “overall UK country emissions by about 1.5%”. 

The Union Plan: Did Tata ever entertain it?

Mr Narendran denied that the decision to reject the "alternative proposal", which steel trade unions claimed would "safeguard jobs" and the future of the Port Talbot plant, was about money.

He told ITV Wales, there was “more to it” and they (Tata) had been “committed" to discussions with the unions over the past four months.

“Of course, we spent two months discussing that," Mr Narendran said.

“That’s why we did not announce what we announced today, two or three months ago. Originally we were going to [announce] it in October. But we looked at it.

“I think the unions also recognise the challenges. Obviously, they don’t like the outcome and we fully appreciate that.

"But I think they know that their plan, apart from being more expensive, had operational challenges.”

With the community very concerned about the future of the Port Talbot site, Mr Narendran said Tata was committed to the next step.

He says starting "economic activity” in the area as soon as possible is a priority, with the company already in discussions with "potential equipment suppliers."

The CEO added: “If you spend a billion pounds on building something here, a lot of that money will float to the local economy."

He insisted that extra money and a change of government "would not have had any impact on the decision" that has been made to decarbonise steel, adding there is a global shift in the way in which steel will be produced in the future.

“Extra money from the UK Government would not have changed the outcome." Credit: PA images

He said: “Extra money from the UK Government would not have changed the outcome.

"We believe that the way forward is electric arc furnaces, not just in the UK, but if you look at the whole of Europe, if you want a lower carbon footprint way of making steel, everyone is shifting from blast furnaces to electric arc furnaces.”

When asked about Tata Steel's plans for its Llanwern site, Mr Narendran said it was "a conversation for the future".

But he added the site would face "restructuring" but not for two to three years with operations continuing as they are until then.

The Tata Steel boss said the changes implemented at Port Talbot would "not be the last step” and should the UK government wish to encourage more steel consumption, they would be “happy to grow” with the industry. 

The UK Government will contribute £500m towards the £1.25bn cost of replacing the blast furnaces with an electric arc furnace. Credit: Ben Birchall/PA Wire/PA Images

When are we likely to see the impact?

  • According to the statement, the move will be a "phased" approach.

  • Most of the cuts will be at Port Talbot in south Wales.

  • 2,500 jobs are expected to be cut over the next 18 months.

  • A further 300 could go over the next three years, which could also include jobs at the Llanwern works.

  • The first blast furnace and coke ovens will close around mid-2024 with operations "progressively winding down" during the second half of the calendar year.

What does this mean for workers?

  • The statement details Tata's aim to "maximise voluntary redundancies".

  • They will offer workers a "comprehensive support package" in excess of £130 million.

  • The Welsh and UK governments have also set aside £100 million for those affected through the Transition Board.

  • Skills training, community-support programmes and job-seeker initiatives will be offered. 

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