Tata proceeds with Port Talbot plan, strikes incoming

Tata Steel is proceeding with its single 3 million tonnes/year electric arc furnace plan for Port Talbot following seven months of formal and informal national level discussions with UK trade unions. Unions are gearing up for industrial action, Kallanish notes.

Port Talbot’s two blast furnaces, no.5 and no.4, will be closed by end-June and end-September respectively. Discussions will continue with unions during the next two weeks on a potential memorandum of understanding on the future ambitions of the business and the impact of the restructuring on employees, Tata says.

“We urge all our members in Tata Steel to vote ‘Yes’ and ‘Yes’ in our ongoing ballot for industrial action to help us negotiate an extension of blast furnace steelmaking at Port Talbot, secure the volume for downstream sites like Llanwern and Trostre, and guarantee there will be no compulsory redundancies,” says Community union general secretary Roy Rickhuss. The ballot result is expected on 9 May.

The Unite union says 1,500 members employed by Tata in Port Talbot and Llanwern have an industrial action mandate against plans to shut both blast furnaces, with strikes to be announced soon.

Tata has meanwhile begun preparations to place equipment orders for the EAF by September, begin enabling and preparatory works at the site by December, and based on current permitting timelines, begin construction on the project by August 2025.

The firm has accepted a revised and updated connection offer from the UK’s National Grid and will be finalising documents in the coming days. This will ensure it has the power infrastructure in place to commission the EAF on schedule by end-2027, it notes.

The steelmaker has already secured most of the slab and hot rolled coil substrate required during the transition period for the UK’s downstream mills. It has agreed details with Associated British Ports to expand the slab handling and stock holding capacity in the south Wales ports and is also in advanced discussions to have the rail movement capacity ready for onward transportation of substrate to the appropriate sites.

It adds it has agreed detailed terms with the UK government on the proposed grant package to support the £1.25 billion ($1.46 billion) EAF transformation, with final documents to be executed in the coming weeks.

“Having looked carefully at all the options over the past seven months in consultation with union representatives, we have decided to proceed with our proposed restructuring and transition. This is the most viable proposal, in contrast to the unions’ unaffordable plan which has high inherent operational and safety risk,” Tata says.

The company and the unions’ adviser reached a common conclusion that this plan would involve significant additional costs of at least £1.6 billion, it adds.

Tata Steel UK has had to supplement its own production with imported material of 333,000 tonnes during the last six months. In the 2023-24 fiscal year, the unit recorded a negative Ebitda of £373 million and negative free cashflow of £623m.

Adam Smith Poland