British Steel to replace Scunthorpe furnaces, putting jobs at risk
British Steel is expected to announce plans today to replace two blast furnaces in Scunthorpe, in a move that would further reshape the UK steel industry and could eventually threaten the jobs of up to 2,000 steelworkers.
The company, owned by China’s Jingye, is expected to inform workers that the blast furnaces will be replaced by greener electric arc models, at a meeting on Monday, according to people briefed on the plans.
Under the proposals, the two blast furnaces at Scunthorpe would be replaced by an electric arc furnace at Scunthorpe and another at a site in Teesside, marking the return of steelmaking to Redcar, where the blast furnace was demolished last year after its closure in 2015.
Electric arc furnaces offer the ability to recycle scrap steel using clean electricity, unlike blast furnaces which rely on coal, creating unavoidable carbon emissions. However, electric arc furnaces require far fewer workers than enormous blast furnaces that still dominate the skylines of Scunthorpe and also Port Talbot in south Wales.
Tata Steel, which operates the Port Talbot plant, is planning a similar shift, although it delayed an announcement last week.
However, unlike Tata Steel, British Steel is understood to be considering keeping its blast furnaces open until the electric arc furnaces are in operation, with an ambitious aim of starting production in 2025. That would put off any job losses for at least two years, and potentially longer.
It is understood that British Steel believes it would be impossible to build a single large electric arc furnace at Scunthorpe because of problems with the electricity grid connection. It is thought a larger furnace would have to wait until at least 2034 for a suitable grid connection, forcing British Steel to look into other options.
Unions have estimated that as many as 2,000 fewer people could evenutally be required to operate electric arc furnaces compared with blast furnaces, although British Steel has not yet told workers how many jobs could be affected.
British Steel’s plan to replace the blast furnaces with electric arc furnaces will be subject to consultation with unions, which are likely to argue against large-scale job losses, although any criticisms would probably be tempered by the welcome news of investment in Teesside, if it is confirmed.
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The BBC, which first reported the plans, said that British Steel would be offered £500m in UK government support to make the switch. That would match a package offered to Tata Steel, but a person briefed on the talks said the company and the government had not yet reached an agreement.
British Steel did not immediately respond to a request for comment.