A Teesside steel expert says the closure of a key British Steel site could have huge implications for the whole industry.
Steel jobs on Teesside look to be safe – for now – after British Steel announced the axe would instead fall on 260 jobs at its Scunthorpe coke ovens.
The Chinese-owned steelmaker said the move at its site in Scunthorpe was part of its drive to overcome global economic challenges and build a “green and sustainable future”.
The news came as ministers considered a multimillion-pound rescue package for the struggling business.
But Chris McDonald, Chief Executive Officer of the Teesside-based Materials Processing Institute, the UK’s national innovation centre for steel and metals, said: “The closure of the Scunthorpe coking ovens is irreversible and will impact the national economy, as it produces such products as rails, beams and wire rod that are vital in supporting UK infrastructure and manufacturing.
“This announcement by British Steel and the resulting loss of 260 jobs underlines the urgent need for investment in new green steel technology, a process already well advanced in countries across Europe, the United States, and Canada.
“The UK is in real danger of being left behind in the race to establish a modern, competitive low-emission steel sector as high energy costs are making our own steel industry unsustainable, which makes it less attractive to invest in green steel.
“In the North-East, the rolling mills at Lackenby and Skinningrove, are dependent on feedstock from Scunthorpe, although I expect British Steel will import coke to keep its operations running.
“However, this closure may well be the thin end of the wedge, opening the door to much greater imports of steel in the future.”
China’s Jingye Group became the manufacturer’s third owner in four years when it bought British Steel out of insolvency in 2020. But now Jingye needs taxpayer funding to keep the doors open and losing jobs may not be what the Government wanted to see.
The company said its bills for energy and carbon increased by £190 million last year, adding that “decisive action” was required because of the “unprecedented rise” in operating costs, surging inflation and the need to improve environmental performance.
British Steel chief executive Xifeng Han said: “The Trade Unions are aware of our proposal to close the coke ovens and we look forward to working closely with them to ensure a long-term safe and sustainable future for the company, thousands of employees and many more people in our supply chain. We also continue to look at other potential cost-saving measures across the business and will announce any further proposed changes in due course.
Read More: Teesside steel expert warns that latest jobs axe leaves UK ‘in real danger’