LONDON: British Steel is reportedly considering cutting up to 2,000 jobs as part of a cost-cutting initiative, as the company aims to transition from coal-powered blast furnaces to electric arc furnace (EAF) technology for producing “greener” steel.
This move is seen as essential for securing new funding, potentially including substantial subsidies from the UK government, for its Chinese owners, Jingye Group, which acquired British Steel in 2020.
The shift to electric arc furnace technology could lead to significant changes within the company, including the potential loss of jobs. While no final decisions have been made regarding the job cuts, the plan could impact the 4,500-strong workforce at British Steel’s Scunthorpe plant and headquarters in northeast England. The move is part of a broader strategy to replace traditional methods with environmentally friendly practices.
British Steel Aims to Achieve Sustainability Goals
A spokesperson for British Steel emphasized the company’s commitment to providing long-term, skilled careers for its employees and those within its supply chains. However, the spokesperson noted that the company was continuously assessing its options as part of its efforts to achieve ambitious sustainability goals.
In response to the potential job losses, the GMB union expressed its opposition, stating that mass job cuts were not the solution to decarbonize the steel industry. The union emphasized the importance of exploring various options and ensuring a fair and just transition for affected workers.
British Steel has been facing significant losses, estimated at £30 million ($36 million) per month. The company’s plans to shut down the coke ovens at its Scunthorpe plant are part of its larger initiative to create a more environmentally sustainable future.
The UK government, while emphasizing its commitment to the steel sector, has noted its support for greener steel production. It recently provided funding to facilitate such initiatives, including backing Tata Steel’s plans for a new electric arc furnace at its Port Talbot site.
