Tata ‘planning big investment in PortTalbot factory furnace’
Tata Steel is reported to be planning to invest £75m in relining a blast furnace at Port Talbot steelworks.
If true, it could mean a new lease of life for the steelworks, which were threatened with closure just two years ago.
Last year Tata agreed a deal with unions in which it pledged to keep two blast furnaces operating at Port Talbot until 2021.
It also committed to investing £100m a year over 10 years in its UK operations and not to seek compulsory redundancies before 2021.
Now Reuters is reporting that the Indian steel giant is planning to invest in relining blast furnace number five. The investment would extend the furnace’s life by seven years, Reuters reports.
A Tata Steel spokesperson said: “We are looking at a range of options as we continue to develop a sustainable UK business for the future.
“There is, however, no definitive decision made yet on any form of blast furnace repair or reline.”
Tata recently announced a £14m investment in Port Talbot’s hot strip mill, which will allow the mill’s volume capacity to increase to more than 150,000 tonnes per annum.
And in November Tata announced £30m of investments, including the replacement of a basic oxygen steelmaking vessel weighing 500 tonnes at Port Talbot site, as well as plans to replace cranes and install enhanced dust-extraction hoods and energyefficient drives to minimise emissions.
Tata Steel has agreed to merge its European operations with German steel giant Thyssenkrupp. The new joint venture would encompass the giant integrated steel plants at Duisburg and IJmuiden, both of which are more profitable than Port Talbot.
The south Wales plant is thought to be more vulnerable than its Dutch and German counterparts should the steel industry face another downturn similar to the one which brought Tata to the brink of selling Port Talbot in 2016.
Last week a major obstacle to the merger with Thyssenkrupp was removed when German steelworkers agreed to a deal which would see their jobs protected till 2026.
When Tata and ThyssenKrupp announced their joint venture last autumn, they said the deal would save up to €600m a year and that they would be seeking up to 4,000 redundancies, split equally between the two companies.
Given the no-redundancies deal with UK workers, it was assumed these job cuts would come from within the two companies’ continental operations. Tata and ThyssenKrupp said financial savings would come from integrating the two companies’ sales and administration arms, optimising procurement and logistics, joint R&D and improving their downstream steel processing.
But after that process is completed around 2020 they are expected to look at their upstream steel production. The longer commitment on jobs given to German steel workers than UK ones, coupled with the higher margins of the continental plants, had been thought to suggest that production at Port Talbot was potentially at greater risk than at Duisburg and IJmuiden.
However, this latest investment in Port Talbot, if confirmed, would indicate that Tata sees the site continuing to operate at two-furnace capacity well into the next decade.