Tata Steel has asked the UK government for more “…substantive and permanent” options to secure the long-term future of Port Talbot’s operations, a spokesman for the steelmaking group confirms to Kallanish.
“The support we are looking for is a little more substantive and something more permanent, that will help us bring down cost of production and add value to the product mix,” Tata Steel chief executive TV Narendran told Moneycontrol on Tuesday. “Or, help us over a period of time in making a transition to a greener facility.”
A major point of the discussions is reported to be the possible replacement of the blast furnaces at Port Talbot with electric arc furnaces. However, there are questions over whether the cost of electricity in the UK will allow for competitive production.
The financial assistance Tata Steel UK already received from the government was to support the company’s working capital in order to ensure it continues operating in the immediate future, Narendran added.
“Post Brexit, we see that UK government will be keen to revive economic activity,” Narendran is quoted as saying by Livemint. “The UK has some high-end manufacturing locally and steel is an important part of the value chain. Over 50-60% of the steel used in the auto and construction industry in the UK is supplied by Port Talbot and we believe the government will support this business to keep the integrity of the value chain.”
Tata Steel chief financial officer Koushik Chatterjee, meanwhile, said the due diligence for the sale of Tata’s Netherlands unit to SSAB is expected to completed by end-December. Thereafter, the company will begin negotiations on the terms and commercial value of the transaction.
Concerns are mounting over the future of Tata Steel’s Port Talbot plant, given the Indian group has already decided to divest the more profitable, lower-cost Dutch half of its European operations.