British Steel’s blast furnaces are set to continue running with a delivery of raw materials to keep them alight for the coming weeks. Coking coal and iron ore from the US will be unloaded at Immingham docks and transported to the Scunthorpe site. A separate shipment of materials is back on its way to the UK from Australia after a legal dispute over ownership was resolved. The government seized control of the business over the weekend following a breakdown in talks with its Chinese owner Jingye.
If the furnaces were starved of fuel, the UK would no longer be able to produce virgin steel, as restarting them would be extremely difficult and costly. Virgin steel-making involves iron being extracted from its original source to be purified and treated to make all types of steel used in major construction projects. The Scunthorpe furnaces produce molten iron by splitting rocks containing iron ore in a chemical reaction that requires intense heat.
The government said the materials from the US would be enough to keep the steel-producing furnaces running for the coming weeks. The materials have been paid for by the government, but the cost has not been revealed. The plant employs 2,700 people and is said to be in a “far better position” as a result of the government’s intervention, according to union officials.
The Business Secretary, Jonathan Reynolds, will travel to Immingham to oversee the unloading and transportation of the raw materials. He said the government had moved “decisively” to secure the raw materials needed to “help save British Steel”, adding that UK industries depended on the company.
Beijing has accused the British government of “politicising trade co-operation” and said its move to take control of British Steel had raised doubts about investment in the UK. An emergency law was rushed through Parliament to give the government control of the site to prevent Jingye from closing the furnaces. The government has appointed two long-standing British Steel employees to run the plant on an interim basis.
The situation has raised questions about Chinese investment in industries deemed strategically critical. The government has not ruled out nationalising British Steel, while also looking for potential private investors to fund operations. China’s embassy in the UK has urged ministers to negotiate with Jingye to find a solution.
In March, Jingye said its Scunthorpe site was losing £700,000 a day, prompting a consultation on job cuts. Government talks with Jingye failed to produce a breakthrough, with the company rejecting an offer of £500m in public money to keep the furnaces operating.
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