Tata announces UK job losses as steelmaker wants switch to greener production

Modern greener manufacturing - versus tradition, stability and employment. That's the battle playing out in South Wales, where a centuries-old metal-making technology will be switched off at the UK's biggest steel plant - costing thousands of jobs. 

India-owned Tata Steel has confirmed it will close its two coal-powered blast furnaces at Port Talbot by the end of the year, with up to 2,800 workers expected to be laid off. 

It's part of a plan by the company to turn around decades of losses by switching to lower carbon electric arc furnaces - a plan backed by $634 million of UK government money. 

Tata bosses acknowledge the serious impact of the changes but say they are necessary. 

"The course we are putting forward is difficult, but we believe it is the right one," Tata Steel Chief Executive T. V. Narendran said. "We must transform at pace to build a sustainable business in the UK for the long-term."

Unions have called the move "unacceptable" saying it will be devastating for the local community. They say workers will be consulted on possible strike action. 

Tata says it will offer a $165 million support package to help affected employees retrain and find new jobs. 

Traditional blast furnaces operate continuously, burning coal 24 hours a day. The World Steel Association says they emit up to 2.32 tonnes of CO₂ per tonne of steel produced. They can use a maximum of 30 percent scrap steel in the manufacturing process, meaning that the majority of the raw material is iron ore. 

Electric arc furnaces can use up to 100 percent scrap steel as their raw material and can produce as little 0.67 tonnes of CO₂ per tonne of steel. Electric arc furnaces also need fewer workers. 

Port Talbot's coal-fired plant is commonly cited as the UK's biggest single carbon emitter, although that position has recently been questioned. It's certainly very high up the list. The British government says switching the plant to electric steelmaking will cut the country's total carbon emissions by 1.5 percent.

The government also says its financial support for Tata's electric transition was necessary to secure the future of the country's steel industry. Tata had otherwise threatened to shut the plant completely. 

Critics say the industry will be diminished because electric arc furnaces make steel from recycling scrap steel, rather than making so-called virgin steel from iron ore, coke and other inputs.

China-owned British Steel, which has two blast furnaces in Scunthorpe, northern England, is also in discussions with the British government about shifting to cleaner manufacturing. Unions have warned of up to 2,000 redundancies.

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