Tata Steel says it remains in talks with the UK government on receiving support for Port Talbot but declined to comment on specifics. This follows media reports suggesting the steelmaker had ended talks with the UK government on receiving close to £500 million ($655m) of funding through the “Project Birch” scheme.
A Tata Steel spokesperson tells Kallanish: “We remain in ongoing and constructive talks with the UK Government on areas of potential support. As these discussions have not reached a conclusion, it would be premature to comment on any options that may or may not be under consideration. In the meantime, we will not respond to speculative and inaccurate media reports about the future of our operations in the UK or elsewhere.”
The media reports said the UK government ended talks with Tata as it concluded the steelmaker is sufficiently financed and does not qualify for taxpayer support.
Last month Celsa UK received a government loan worth £30m, while Tata Steel was set to receive a much larger amount, according to reports (see Kallanish passim). In return for the state loan, the government was reported to be requiring the steelmakers to commit to investments to further curb CO2 emissions.
Tata Steel Europe confirmed last month it was discussing with the UK government several options for the future of its UK operations, to address existing structural challenges. One of these was understood to be the possible replacement of the blast furnaces at Port Talbot with electric arc furnaces.
Tata Steel Europe’s June-quarter performance was affected by the overall weakness in economic activity in Europe. “Spreads are at unsustainably low levels but are expected to improve going forward,” Tata Steel chief executive TV Narendran said of Europe last week.