UK steel on a knife edge after Scunthorpe coking ovens closure
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British steel on edge after job cuts: Closure of Scunthorpe coke ovens is first major test for Business Secretary Kemi Badenoch
Kemi Badenoch faces her first crisis as company secretary after hundreds of job cuts at a Red Wall steel mill.
British Steel’s Chinese owner said it will cut 260 jobs by closing coke ovens at Scunthorpe as the industry faces high energy costs.
Jingye Group, which bought the company in 2020, had no timetable, but it is believed the closure could come before the end of the year.
Feel the Heat: Company Secretary Kemi Badenoch and the Scunthorpe Steel Mill
Unions warned it could have a ‘catastrophic impact’ and make the UK dependent on imports of coke needed to run blast furnaces used to make steel.
They said the British steel industry was ‘on the cutting edge’.
It’s a big headache for Badenoch, who became Business Secretary earlier this month and said days ago ‘nothing is ever taken for granted’ when asked if the UK needed a steel industry.
And it will worry Downing Street as Scunthorpe is one of several ‘Red Wall’ seats that voted for Tory in the 2019 election.
The move came despite reports that officials plan to fly to China this week for talks on a £300m government bailout package.
If a deal is struck, the total state support for British Steel would rise to more than £1 billion.
British Steel boss Xifeng Han said the UK steel sector was “uncompetitive” compared to global rivals and that the company was facing “significant challenges” from economic slowdown, inflation and “exceptionally high energy prices”.
The group’s energy bill rose by £120 million last year and annual carbon costs rose by £70 million, which were “some of the highest in the world,” Han said.
Jingye is believed to be drawing up plans to cut 800 staff at the company, likely leading to allegations that it is not keeping promises made when it bought the company, such as making major investments.
Alun Davies, from the Community Trade Union representing steel workers, said: ‘British Steel’s plan to close its coke ovens could have catastrophic consequences for employment and steel production in Scunthorpe and the UK as a whole.’
He said the closure would make British Steel ‘dependent on unreliable imported coke’ and would ‘endanger our sovereign capacity to produce steel in the UK’. The furnaces bake coal to make coke, a fuel used to make steel.
A by-product is used to make steel in train tracks, raising fears that the rail industry will be affected.
Scunthorpe MP Holly Mumby-Croft said she was ‘deeply disappointed’. Jingye announced cuts despite ongoing rescue talks.
She added, “This is no way to behave. It sends a totally wrong signal and violates the spirit of the negotiations with the government.
Jingye’s actions raise questions about their commitment to our steel mill and their commitment to the community they are part of here in Scunthorpe.”
A government spokesman said: ‘We stand ready to support workers affected by British Steel’s decision and will continue to work with the company to try and find a low-carbon, sustainable and competitive solution.’