**Scunthorpe**: UK officials are working urgently to secure raw materials for British Steel, the country’s last primary steel manufacturer, amidst concerns over the plant’s operational viability and a £233 million loss reported in its finances. A new industrial strategy is on the horizon.
UK officials are currently engaged in urgent efforts to secure essential raw materials needed to sustain Britain’s last primary steel manufacturer, British Steel, located in Scunthorpe. The initiative has seen support from numerous businesses, with notable contributions from industry giants such as Tata and Rainham Steel, who have offered both raw materials and managerial assistance.
On Monday, 14 April, the government reaffirmed the importance of maintaining the Scunthorpe plant, considering it crucial for the nation’s economic security. This initiative comes as the government prepares to unveil a new industrial strategy during the summer. Failure to keep the plant operational would result in Britain being the only country in the Group of Seven (G7) that cannot produce virgin steel.
To avert potential damage to the machinery, officials are specifically targeting the procurement of materials like coking coal, which is vital for the plant’s blast furnaces. The Financial Times reported on 13 April that a shipment of coal, currently docked at Immingham port, has been ordered but remains unpaid for by its owner, the Chinese firm Jingye Group.
As negotiations with Jingye faltered, Parliament moved quickly, passing an emergency bill on Saturday that enables the government to take control of British Steel. As of Sunday, Business Secretary Jonathan Reynolds expressed uncertainty regarding the government’s ability to secure a sufficient supply of raw materials necessary to keep the furnaces operational. Meanwhile, Conservative Shadow Business Secretary Andrew Griffith commented that the government had reacted “too late” to the unfolding crisis.
The Scunthorpe facility is the last plant in the UK capable of producing virgin steel, a critical material for various sectors, including construction and rail transport. Reynolds acknowledged the dire financial situation of British Steel, which reported a loss of £233 million in its latest financial accounts. While the government aims to identify a private sector partner for the business, he suggested that nationalisation remains a plausible outcome.
Reynolds further indicated that the government will adopt a more cautious approach regarding future investments from Chinese firms in sensitive economic areas. He stated, “I wouldn’t personally bring a Chinese company into our steel sector.” The Times later cited anonymous sources claiming that Jingye’s management decisions risked the operational status of the blast furnaces by halting new raw material acquisitions and liquidating existing stock.
Reynolds concluded by emphasising the strategic significance of steel for the nation’s security, as well as its role in the government’s aspirations for housing, infrastructure, and manufacturing growth in the UK. He assured that a long-term plan to co-invest with the private sector will be established to secure a sustainable future for the UK steel industry.
Source: Noah Wire Services
