Port Talbot steel funding deal ‘close to completion’

A UK Government funding lifeline for Port Talbot steelworks running into hundreds of millions of pounds is close to being agreed.

India-owned Tata has been in discussions with the UK Government over what is understood to be up to £500m in funding to support its primary steelmaking plant in Port Talbot, that directly employs around 4,000, as well as its downstream business that includes those at Trostre, Caerphilly, Llanwern and Shotton.

It employs 8,000 in the UK, with operations also in Corby and Hartlepool in England.

With production hit by the pandemic and fears that the economic downturn will hit demand further — compounded by over supply in the global marketplace from huge Chinese production — Tata is seeking funding to help it navigate through the downturn to a recovery.

According to the Financial Times both sides are close to a deal, which could be signed off in days.

If agreed, and both the UK Government and Tata declined to comment, it would be the first major deal under the Treasury designed Project Birch initiative, providing huge loans to major UK employers with an option to convert debt into equity stakes for the Westminster government.

However, with Tata, it could just take the form of a repayable loan.

If a funding deal for Port Talbot is finalised it would be a huge boost for the town. As well as 4,000 direct jobs, the plant also supports thousands more in its extensive supply chain.

However, in a challenging global marketplace, with Tata loss-making in the UK, it will take far more than just a loan of hundreds of millions to secure its long-term future.

Tata said: “Our position continues to be that we have been [seeking] and continue to seek government support in the UK, the Netherlands and all geographies we operate in.”

The UK Department for Business, Energy and Industrial Strategy (BEIS) said: “We do not comment on the commercial or financial affairs of individual companies.”

The Welsh Government said it would provide financial assistance to support Tata’s operations in Wales, but that the lion’s share of any support had to come from the UK Government due to the scale of funding and financing at its disposal.

In Wales Tata directly employs 7,000. As well as Port Talbot (4,000) at Llanwern, Newport, it employs 1,000, Shotton, 1,000, Trostre, 650 and Caerphilly 200.