Tata would consider 'additional measures' for Port Talbot if more money on table, says UK boss

Tata Steel's UK CEO Rajesh Nair has been answering questions from the Economy, Trade and Rural Affairs committee in Cardiff Bay.

The UK boss of Tata Steel has stood by his company's plans which would see two and a half thousand jobs lost here in Wales but would, he says, give the Port Talbot plant a future

Rajesh Nair told a committee of Senedd members that the firm Tata Steel would consider "additional alternative measures" and future investment in the Port Talbot plant if the UK government put more money on the table.

But he said that the firm believes the current plan, which would see more than 2,500 jobs lost, is still the best proposal to ensure the plant’s long-term survival.

He’s been answering questions from Senedd Members belonging to the Economy, Trade and Rural Affairs Committee. It comes just days after the company announced the start of its formal 45-day consultation on its restructuring.

The session has been described as "deeply disheartening and devastating for Wales’ steel industry by committee chair, Paul Davies MS.

The steel giant's proposals include the closure of its blast furnaces with the loss of around 2,500 jobs as it moves to a more environmentally friendly way of producing steel.

Mr Nair, who has worked for the company for over 35 years and became UK CEO back in November 2021, has been outlining the challenges the business has been facing.

He has once again reiterated that Tata Steel "considered" the alternative multi-union option but said that it would have delayed the inevitable by only months.

When asked by chairman Paul Davies, if the decision by Tata to shut its blast furnaces was purely financial? He said "Not exactly", but added, "Financial is playing a very important part in our decision and in the proposals that we have made".

He said there were several factors which had led to the company taking this decision.

The first related to the "stage and state" of the company's assets in Port Talbot. They were described as being towards "the end of their life". Mr Nair said the heavy-end in particular needed addressing. He described how the predictability and reliability of the blast furnaces were compromised.

Tata UK CEO Rajesh Nair told a committee of Senedd members "There is an urgency to take action". Credit: Senedd TV

He added: "If we continued with no change it would compromise our commitment to the workforce to ensure safe and reliable operations and to our customers to ensure reliable timely quality deliveries."

On the issue of financial losses, Mr Nair said: "Over the past few years the business has been losing a tremendous amount of money. Last quarter the business turned a loss of £160 million. And for the first nine months of this financial year, it's about £330m.

Mr Nair added: "If nothing else was to go wrong and if everything else was to be in the same state of affairs, which it is not, we know it will not be.

"We are likely to turn up with a loss of nearly £500m, that's half a billion of loss in one year. This is just not sustainable nor viable for any company to handle."

He said there is an urgency to take action, adding that Tata Steel's global CEO T.V. Narendran had reiterated this during his recent appearance before MPs in Westminster. He added that Mr Narendran had said that "if there were more finances available if incentives were provided and if there was a business case and the markets in the UK supported it.

"We are more than happy to look at investments into the future and additional investments which can help".

But he continued saying: "Fundamentally the EAF (electric arc furnace), we believe is the best proposal for us to move to a place, which can ensure sustainable steelmaking in the UK, which at the end of it all, on the other side of transformation - we will have a viable business which the UK steel business has not been for the past fifteen years.

"The EAF is just a first step and the most important step into ensuring sustainable, viable steelmaking in the UK. Everything else will be looked at and can be looked at against incentives available, financial support available, business case etc."

Seeking further clarity, over whether extra funding would change the company's plans, chair Paul Davies recapped saying: "Just to be clear, if more money was on the table you would actually look at alternative measures?"

To which Mr Nair responded: "Not alternative measures, additional measures to what we are doing. He clarified what he meant by this by saying: "Anything on the upstream, often in the last few weeks spoken about things like the DRI which provides solid iron as an input to the EAF.

"That is potentially an option and anything else that helps us to improve the product mix or pivot ourselves against a new product downstream - if it makes a business case and there is financial support available."

When asked about the current deal offered by the UK government and if there were any conditions attached to it during negotiations Mr Nair said: "The grant funding agreement is still in the process of being signed off. So I might not be able to give you all the details because of the sensitivity involved around that funding.

He added: "But suffice to say that the £500m, which we all know about, which the government has committed is essentially to build the EAF and to make sure that we deliver on the goals of C02 reduction. I mean, that is fundamentally the principle.

He said the only other point which has been made very clear to us is that the government will not support any loss of funding. With all the loss funding that we have to do, we know the company is going to be in a state of loss for the next few years, as we have seen. All that loss funding is to be on account of the company.

"In addition to the 750m we are bringing as part of the investment in the EAF, added to the 500m coming from the government is a 1.25b transformation package."

Chair of the Senedd Economy Committee, Paul Davies has called on Tata to "reconsider its position and to keep the blast furnace open".

He said: “Today’s session with Tata Steel bosses is deeply disheartening and devastating for Wales’ steel industry.

“Despite huge opposition and the terrible effects the closure of the blast furnaces will have on the workforce, their families and communities across south Wales, Tata are unequivocal and are not listening.

“This week the whole Senedd unanimously agreed that there is a viable future for the blast furnace – this has been completely ignored.

The UK government has put in place, what has been described as "one of the biggest support packages in history".

A spokesperson said: “This record level of support shows just how much the UK Government values the Welsh steel industry and the people and communities whose livelihoods depend on it.”

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