'Don't politicize' British Steel failure, China warns UK

Beijing has warned the UK against "politicizing" an unfolding row over the future of Chinese-owned British Steel after legislation was approved to prevent the shutdown of the last British factory that can make steel from scratch.

The UK government rushed urgent legislation through parliament on Saturday to stop the blast furnaces at British Steel's plant in the northern English town of Scunthorpe from being turned off.

The move came after owners Jingye said it was no longer financially viable to keep them burning. 

UK Business Secretary Jonathan Reynolds later said London had been "naive" to let the Chinese firm take over part of the sensitive steel industry.

A spokesman for China's foreign ministry urged the British government on Monday to "avoid politicizing trade cooperation or linking it to security issues, so as not to impact the confidence of Chinese enterprises in going to the UK."

"When it comes to the operational difficulties currently faced by British Steel, the two sides should negotiate a solution on the basis of mutual benefit," Lin Jian told a regular news briefing in Beijing.

Beijing hopes London will "treat Chinese businesses that have invested and operate in the UK fairly and justly, (and) protect their legitimate and lawful rights and interests".

Jingye, one of the world's biggest steel firms, is "a Chinese private enterprise that has undertaken cooperation with the British side based on market principles," Lin said.

The company bought British Steel in 2020 and says it has invested more than $1.6 billion to maintain operations but was losing around $924,000 a day.

Britain's government on Monday raced to secure raw materials to keep the blast furnaces running. Government minister James Murray said officials were at the site on Monday.

"Their role is to make sure we do everything we can to ... get those raw materials to the blast furnaces in time," Murray told Times Radio.

Other firms including Tata and Rainham Steel have also offered help securing supplies, the minister added.

Charlotte Brumpton-Childs from the GMB trade union said she was "wholly reassured" that coking coal bound for the plant will be "paid for and unloaded over the next couple of days" at a nearby shipping terminal.

However, Murray and Business Secretary Jonathan Reynolds were unable to guarantee they would be able to keep the twin furnaces going.

Blast furnaces are difficult to restart once switched off. Failure to secure enough supplies to keep them running could seriously damage the plant - and risk making Britain the only G7 country without virgin steelmaking capacity needed for everything from railways to bridges.

"If we hadn't acted, the blast furnaces were gone and in the UK primary steel production would have gone," Reynolds said on Sunday.

Reynolds said Jingye had turned down an offer of some $660 million to buy materials, instead requesting more than twice that amount with few guarantees the furnaces would stay open.

Murray clarified that Jingye's actions "don't speak to the actions of all Chinese companies."

While some sectors were "more sensitive than others", a lot of "UK-Chinese trade is in non-contentious areas," Reynolds added.

Starmer's administration has been at pains to improve relations with Beijing, with several high-ranking ministers holding bilateral talks in hopes of spurring economic growth.

The government saw its possible closure as a threat to Britain's long-term economic security, given the decline of the UK's once robust steel industry - and the projected loss of 2,700 jobs at the plant.

The government, which stopped short of nationalizing British Steel, is still hopeful of finding a private investor.

"We want to find a private sector partner to co-invest," Murray told Sky News, adding nationalization remained a "very likely option".

The Uk government has approved British Steel's appointment of two of its long term employees to act as interim chief executive and chief commercial officer.

British Steel said on Monday that Allan Bell, who has worked at the Scunthorpe plant for 14 years, had been appointed interim chief executive, while Lisa Coulson, who worked at the site for 19 years, will act as interim chief commercial officer.

The firm said the appointments had been signed off by a minister.