Future of UK integrated steel complex remains cloudy

Government officials, executives from India-based Tata Steel, consultants from McKinsey & Co. and investment bankers are reportedly meeting in a renewed effort to chart a future for the integrated steelmaking complex in Port Talbot, Wales, in the United Kingdom.

According to a Sept. 5 online report from U.K.-based Sky News, consultants from McKinsey and investment bankers from Credit Suisse recently have joined negotiations between the U.K. Treasury and Tata Steel. The talks have been taking place for several months.

A June report from the U.K.-based Sunday Times indicates one plan being considered would see blast furnaces at the site idled and replaced with scrap-fed electric arc furnace (EAF) capacity.

That plan, however, has not been favored by unions representing some of the Port Talbot complex’s 3,500 employees, according to Sky News.

Sources are indicating to Sky that McKinsey and Credit Suisse have been brought in partially to “draw up a blueprint” for a future for the steelmaking complex, although it is unclear whether the potential shift to EAF production is among the scenarios being considered.

Tata Steel Europe, the subsidiary that operates the Port Talbot complex, on its website touts planning it is undertaking in Wales to help “shape regional efforts to decrease carbon emissions, aimed at creating the world’s first net-zero industrial cluster.”

The company also says as part of its “ambition is to produce steel in a carbon-neutral way by 2050” it is  “encouraging recycling and reuse” and “using the latest technology to design products [that] support a circular economy and the use of renewable resources.”