Tata Steel's strategy for its UK plants remains unchanged even though a new government has come to power, chairman N Chandrasekaran told shareholders on July 15 at the annual general meeting. His words indicated that the steelmaker will march ahead with its plans to close the second blast furnace plant, which would result in the loss of 2,800 jobs in Port Talbot, Wales.
"I must say we have had very good discussions with both the previous government and the current government. We have been working very closely with the government, the unions and the local government in Wales... everybody is working together to make sure the project is on track and we don't see any change in direction," Chandrasekaran said when some of the investors raised queries on the transition plans in UK post-elections.
The comments come amid reports that the change in government in the United Kingdom could hinder Tata Steel's plans to reduce jobs as part of its strategy to shut down the aging blast furnaces.
Last week, Fitch Ratings changed its outlook on Tata Steel to negative due to uncertainties surrounding the company's efforts to improve operations in the UK.
"We are constantly looking at how we can not only deliver to our downstream product commitments, but also any other expansion opportunities with the right financial metrics... so that we are able to serve the market, customers and also keep employment," Chandrasekaran added.
According to a few UK media reports, the UK government's new business secretary Jonathan Reynolds has said that "job guarantees" will form part of the negotiations with Tata Steel.
Reynolds said there was "a better deal available" on the future of the plant, but said newer technologies would employ fewer people, according to a BBC report from last week.
Tata Steel operates a 3 million tonne per annum (MTPA) plant at Port Talbot in South Wales, employing approximately 8,000 people across its operations in the country. As part of its decarbonization strategy, the company is transitioning from the blast furnace (BF) method, which is approaching the end of its life cycle, to a low-emission electric arc furnace (EAF) process.
In September 2023, Tata Steel and the UK government agreed on a joint investment of £1.25 billion to implement decarbonization initiatives at the Port Talbot steelmaking facility in Britain.
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