The steel town of Port Talbot is braced for the shutdown of the final furnace at its plant on Monday which will result in heavy job losses and deal a devastating blow to communities in south Wales.
Tata Steel has begun the process of winding down operations at blast furnace 4 at Port Talbot and engineers have already started altering the raw materials poured into the top of the furnace to prepare for decommissioning. Blast furnace 5 was closed in July.
The closure is part of Tata’s transition towards a greener form of steelmaking as it builds a £1.25bn electric arc furnace for the Port Talbot site by 2027, which produces steel by melting scrap metal.
The blast furnace closure will mean nearly 2,000 jobs will go at the plant over the coming months, with thousands more jobs lost in the wider community that relies on the steelworks. It marks the end of traditional steelmaking in south Wales and means Port Talbot will be stripped of its ability to make its own “virgin” steel.
The jobs of 2,500 workers are also under threat at British Steel’s site at Scunthorpe, Lincolnshire, with fears that the plant’s Chinese owner, Jingye, could bring forward the closure of the UK’s remaining blast furnaces before the end of the year.
If the remaining closures go ahead, Britain would become the only major economy in the G20 with no ability to produce steel from a blast furnace and will be reliant on imports to meet the needs of the aerospace, rail and automotive sectors. Unions and politicians have warned about the threat to the UK’s economy and security from its inability to make primary steel from iron ore and coal.
The furnace closure at Port Talbot follows decades of decline for Britain’s steel industry which in 1971 employed about 320,000 people (excluding the processing of steel). It now employs about 33,700, according to UK Steel, the trade association.
The new Labour government agreed a taxpayer-backed deal earlier this month for the Port Talbot plant in which it will provide £500m towards the construction of the new greener electric arc furnace at the site, with the plant’s Indian owners, Tata Steel, paying £750m.
The electric arc furnace is far less labour intensive and greener, with about 500 jobs being created during its construction.
But Tata’s management had rejected an alternative plan from the unions to keep one blast furnace at Port Talbot open until 2032 to reduce the scale of the job losses, saying the plant is losing £1m a day. Unions called the decision a “missed opportunity”.
Roy Rickhuss, the general secretary of Community Union, which represents steelworkers, said: “Today marks an incredibly sad and poignant day for the British steel industry and for the communities in and around Port Talbot which are so intricately connected to blast furnace steelmaking.
“It’s also a moment of huge frustration – it simply didn’t have to be this way. Last year, Community and GMB published a credible alternative plan for Port Talbot which would have ensured a fair transition to green steelmaking and prevented compulsory redundancies. Tata’s decision to reject that plan will go down as an historic missed opportunity.
“The closure of blast furnace 4 marks the end of an era, but this is not the end for Port Talbot. We will never stop fighting for our steel industry and our communities in south Wales.”
The job losses are expected to hit Port Talbot hard as the steelworks are the town’s largest private employer. Unions say that for every job in the steel plant, about three or four jobs are supported in the wider community.
At Port Talbot more than 2,000 workers have expressed an interest in taking voluntary redundancy and will receive an enhanced deal. Those granted it will be offered 2.8 weeks of salary for every year of service up to 25 years, with a minimum payment of £15,000. The previous offer was 2.1 weeks of salary for every year.
Employees will also have the opportunity to sign up to a year-long training programme, which will result in them receiving full pay for the first month and the equivalent of a £27,000 salary for the remaining 11 months.
Jo Stevens, the secretary of state for Wales, who chairs the Tata Port Talbot transition board, which has access to £100m to invest in skills and regeneration for the local area, said £13.5m had already been released to help businesses and staff in the supply chain who were affected by the closures at Port Talbot.
The funds will help people to retrain and reskill into new employment, and will help businesses to diversify and go into new markets if they are a primary customer of Tata Steel.
The government has promised to publish a new steel sector strategy in spring 2025.