by The steel town of Port Talbot is preparing to close the last furnace at its plant on Monday, which will result in heavy job losses and deal a devastating blow to communities across South Wales.
Tata Steel has begun winding down operations at Blast Furnace 4 in Port Talbot and engineers have already started adjusting the raw materials poured into the top of the furnace in preparation for decommissioning. Blast furnace 5 was closed in July.
The closure is part of Tata’s transition to a greener form of steelmaking as the company builds a £1.25 billion electric arc furnace for its Port Talbot site by 2027, which produces steel by smelting scrap.
The closure of the blast furnace will mean almost 2,000 jobs will be lost at the plant in the coming months, with thousands more jobs lost in the wider community that relies on the steelworks. It marks the end of traditional steel production in South Wales and means Port Talbot will be stripped of its ability to make its own ‘virgin’ steel.
The jobs of 2,500 workers are also under threat at British Steel’s site in Scunthorpe, Lincolnshire, amid fears that the plant’s Chinese owner, Jingye, could bring forward the closure of Britain’s remaining blast furnaces before the end of the year .
If the remaining closures go ahead, Britain would become the only major economy in the G20 that is unable to produce steel from a blast furnace and will have to rely on imports to meet the needs of the aerospace, railway and automotive sector. Unions and politicians have warned of the threat to the UK economy and security posed by the inability to make primary steel from iron ore and coal.
The closure of the Port Talbot furnace follows decades of decline in the British steel industry, which employed around 320,000 people in 1971 (excluding steel processing). According to the trade association UK Steel, it now employs around 33,700 people.
The new Labor government secured a taxpayer-backed deal for the Port Talbot plant earlier this month, which will see it provide £500 million to build the new greener electric arc furnace at the site, while the plant’s Indian owners, Tata Steel, will pay £. 750m.
The electric arc furnace is much less labor intensive and greener; approximately 500 jobs will be created during construction.
But Tata management had rejected an alternative union plan to keep one blast furnace in Port Talbot open until 2032 to limit the scale of job losses as the plant loses £1m a day. The unions called the decision a “missed opportunity”.
Roy Rickhuss, general secretary of Community Union, which represents steelworkers, said: “Today is an incredibly sad and poignant day for the British steel industry and for the communities in and around Port Talbot that are so closely linked to steel production in blast furnaces.
“It is also a moment of enormous frustration; it just didn’t have to be this way. Last year, Community and GMB published a credible alternative plan for Port Talbot that would have ensured a fair transition to green steelmaking and avoided redundancies. Tata’s decision to reject that plan will go down as a historic missed opportunity.
“The closure of Blast Furnace 4 marks the end of an era, but it is not the end for Port Talbot. We will never stop fighting for our steel industry and our communities in South Wales.”
Job losses are expected to hit Port Talbot hard as the steelworks is the town’s largest private employer. Unions say for every job at the steel mill, about three or four jobs are supported in the wider community.
At Port Talbot, more than 2,000 employees have expressed an interest in voluntary redundancy and will receive a better deal. Those who get it will be offered 2.8 weeks’ salary for each year of service up to 25 years, with a minimum payment of £15,000. The previous offer was 2.1 weeks salary per year.
Employees will also have the option to sign up for a year-long training program, which will result in them receiving full wages for the first month and the equivalent of a salary of £27,000 for the remaining 11 months.
Jo Stevens, the Welsh Secretary and chair of the Tata Port Talbot Transition Board, which has access to £100 million to invest in skills and regeneration for the local region, said £13.5 million has already been released to help businesses and staff to assist the supply chain affected by the Port Talbot closures.
The funds will help people retrain and retrain for new jobs, and will help companies diversify and enter new markets if they are a primary customer of Tata Steel.
The government has promised to publish a new strategy for the steel sector in the spring of 2025.
