The United Kingdom on Friday announced a joint investment package with Tata Steel worth 1.25 billion pounds, including a government grant of 500 million pounds, for the country's largest steelworks in Wales that will help protect thousands of jobs and boost the British economy.
The government's grant has been dubbed as one of the largest British government support packages in history and a "defining moment" for the country's steel industry.
As part of the agreement, the Indian steel giant is expected to invest GBP 1.25 billion, including the government grant, in a new electric arc furnace and related facilities for greener steel production at Port Talbot in South Wales, currently the UK's largest single carbon emitter.
"This investment will modernise and secure a more sustainable future for the UK steel industry.
"It will also protect thousands of skilled jobs in the long-term and help grow the economy," UK Prime Minister Rishi Sunak said in a post on social media platform X.
Tata Steel UK employs over 8,000 people, including at Port Talbot, which was under serious threat without substantial investment. The company also supports around 12,500 further jobs in the upstream supply chain.
The Department for Business and Trade (DBT) on Friday said the proposal, which is subject to information and consultation processes led by Tata Steel, has the potential to safeguard over 5,000 jobs across Britain.
"The UK government is backing our steel sector, and this proposal will secure a sustainable future for Welsh steel and is expected to save thousands of jobs in the long term," UK Business and Trade Secretary Kemi Badenoch said.
According to her, this is a historic package of support from the UK government and will not only protect skilled jobs in Wales but also "grow the UK economy, boost growth and help ensure a successful UK steel industry".
Tata Steel and the UK government have announced a joint agreement on a proposal to invest in state-of-the-art electric arc furnace steel making at the Port Talbot site with a capital cost of 1.25 billion pounds, inclusive of a grant from the government of up to 500 million pounds, the company said in a statement.
The new electric furnace is to replace the existing coal-powered blast furnaces, which are nearing the end of their effective life, and reduce the UK's entire carbon emissions by around 1.5 per cent as a result.
The proposal is subject to relevant regulatory approvals, information, and consultation processes, and finalisation of detailed terms and conditions.
"The agreement with the UK government is a defining moment for the future of the steel industry and indeed the industrial value chain in the UK," said Tata Group Chairman N Chandrasekaran, who had been working with the government in developing a "transition pathway" for sustainable steelmaking in the UK.
"The proposed investment will preserve significant employment and presents a great opportunity for the development of a green technology-based industrial ecosystem in South Wales. We look forward to working with our stakeholders on these proposals in a responsible manner," he said.
Tata Steel's Chief Executive Officer and Managing Director T V Narendran said the proposed project with one of the largest investments in the UK steel industry in recent decades, provides an opportunity for an optimal outcome for all stakeholders.
"We will undertake a meaningful consultation with the Unions on the proposed transition pathway in the context of future risk and opportunities for Tata Steel UK," Narendran said.
UK Chancellor Jeremy Hunt said the proposal is a landmark moment for maintaining ongoing UK steel production - supporting sustainable economic growth, cutting emissions, and creating green jobs.
Tata Steel UK will now inform and consult with staff and unions on the agreed proposals.
"Unions should have had a seat at the table throughout this process, as it is clear the interests of the workforce have not been considered in the rush to sign off a deal to do decarbonisation on the cheap," the Community steelworkers, which is among those concerned about the arrangements, said.
Stephen Kinnock, Opposition Labour MP for Aberavon which covers Port Talbot, said the investment to decarbonise was long overdue but that he was concerned that ministers did not "adequately consult steel unions".
The UK government said it would also ensure support for any staff affected by the transition, working with the devolved Welsh government and Tata Steel to establish a dedicated transition board to support both affected employees and the local economy with a funding up to 100 million pounds.
"Steelmaking remains a vital part of the Welsh economy and this huge support package from the UK Government ensures that the industry now has a bright future to match its long and proud history in South Wales," Welsh Secretary David T C Davies said.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)