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Tata Steel might invest more in its Port Talbot plant in the UK if the government provides additional funding, according to CEO T V Narendran. The UK government has already agreed to a £500 Mn package to support the financially struggling steel plant, which faced potential closure due to high carbon emissions. The Port Talbot plant employs about 8,000 people.
As part of the restructuring plan backed by government funds, Tata Steel plans to replace blast furnaces with electric furnaces to use recycled steel, reducing carbon emissions. However, this shift will result in the loss of 2,800 jobs as electric furnaces require fewer workers.
Narendran mentioned to the Welsh Affairs Committee of the House of Commons that the adoption of electric arc furnaces is just the beginning, indicating openness to further greener initiatives with available funding.
Steel unions had previously suggested that the UK government invest more to secure Tata Steel's future. Tata Steel had earlier announced the closure of both blast furnaces in Port Talbot, the UK's largest steelworks, by the end of 2024.
During questioning, Stephen Kinnock, Labour MP for Aberavon (covering Port Talbot), accused Tata Steel of bluffing when negotiating with UK ministers for the £500 Mn funding. Kinnock suggested that the situation was not a choice between complete closure and 8,000 job losses, but rather a choice between Tata's plan and a multi-union plan that could have saved 2,500 jobs.
Tata Steel currently faces a daily loss of around £1 Mn from its operations in the town. Keeping a blast furnace open and producing steel from scratch would result in an additional £600 Mn loss, according to the company.
In summary, Tata Steel is open to considering further investments in its Port Talbot plant if additional government funding is available. The company is undergoing a restructuring plan, backed by a £500 Mn government package, which involves shifting to electric furnaces to reduce carbon emissions but also leads to job losses. The ongoing financial challenges emphasise the need for sustainable solutions to secure the future of the Port Talbot plant.
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