Latest news with #ScunthorpeSteelworks
Daily Mail
3 days ago
- Business
- Daily Mail
Network Rail strikes lifeline £500m deal with British Steel to help save the Scunthorpe blast furnaces
Network Rail has struck a lifeline £500million deal with British Steel to help save the Scunthorpe blast furnaces – but the industry is still facing punitive 25 per cent US tariffs. The agreement, for British Steel to produce 337,000 tonnes of rails over five years, safeguards 2,700 jobs. But the industry remains in peril unless the Government can finalise its trade deal with the Trump administration and have tariffs removed. Otherwise, the charge would rise from its interim level of 25 per cent – covering UK steel imports while trade deal discussions are ongoing – to the 50 per cent levied on all other countries. And the rail-supply deal follows outcry after the state-owned track and infrastructure company put a £140million steel contract for overhead electrical installations out for tender on the open market last month, as revealed in The Mail on Sunday. Transport Secretary Heidi Alexander, who yesterday visited Scunthorpe steelworks to finalise the deal, said it 'truly transforms the outlook for British Steel'.
Yahoo
4 days ago
- Business
- Yahoo
Ministers said to be considering bill to wipe out British Steel's debts
Ministers are reportedly considering legislation to relieve British Steel of debts that have risen to nearly £1bn, as the government considers how best to prepare the Scunthorpe steelworks for sale. The government took control of the business last month after it said its Chinese owner, Jingye Steel, planned to close the plant within days. The move required emergency legislation that was passed in a historic recall of parliament. Jingye remains the legal owner of British Steel, despite the takeover, and is owed money by the company. Those debts would probably have been wiped out in a liquidation. However, the Labour government prevented that from happening, fearing as many as 2,700 job cuts and the symbolic loss of the ability to produce steel from iron ore in Britain. British Steel owed £711m to Jingye businesses at the end of December 2023, according to its last filed accounts. Net debt has risen to just under £1bn in the year and a half since then, government and industry sources told the Financial Times. The government is considering ways to wipe out that debt, including new legislation, the FT reported. Legislation to wipe out debts would be highly controversial, as it would in effect destroy a privately held asset. It could make foreign investors more wary of investing in the UK. A debt-free British Steel would be a much more attractive prospect for a possible buyer for Scunthorpe, where two blast furnaces are operating. It is thought that the government would provide hundreds of millions of pounds for investment in a new electric arc furnace to produce much cleaner steel. That would secure Scunthorpe's longer-term future. The industry minister, Sarah Jones, said on Tuesday the government had so far provided £94m to British Steel in working capital needed to buy raw materials and pay salaries. Jingye bought British Steel in early 2020, after Boris Johnson's Conservative government bore the cost of running the company for several months during the search for a buyer. The previous owner, Greybull Capital, an investment firm, had walked away. The Jingye takeover, completed in March 2020, came just as the Covid pandemic began to disrupt global supply chains. The Scunthorpe plant was losing about £700,000 a day when Jingye announced plans to close it. The government had offered Jingye £500m in state aid to make the switch to electric arc furnaces, but the company, whose other steel facilities are all in China, asked for significantly more. The switch would also be financially risky for any buyer. Liberty Steel, the operator of the UK's biggest existing electric arc furnace in Rotherham, is in talks with creditors as it faces a winding-up petition. Liberty, which is owned by the metal magnate Sanjeev Gupta, has not produced any steel for nine months. Liberty and the rest of the UK steel industry have long argued that British wholesale energy costs are too high to be competitive with rivals in France and Germany, let alone in China. British Steel and the UK Department for Business and Trade declined to comment. Jingye was approached for comment.
The Guardian
22-05-2025
- Business
- The Guardian
Ministers said to be considering bill to wipe out British Steel's debts
Ministers are reportedly considering legislation to relieve British Steel of debts, which have risen to nearly £1bn, as the government considers how best to prepare the Scunthorpe steelworks for sale. The government took control of the business last month after it said that its Chinese owner, Jingye Steel, planned to close the plant within days. The effective takeover required emergency legislation passed in a historic recall of parliament. Jingye remains the legal owner of British Steel, despite the takeover, and is owed money by the company. Those debts would probably have been wiped out in a liquidation. However, the Labour government prevented that from happening, fearing as many as 2,700 job cuts and the symbolic loss of the ability to produce steel from iron ore in Britain. British Steel owed £711m to Jingye businesses at the end of December 2023, according to its last filed accounts. However, net debt has risen to just under £1bn in the year and a half since then, government and industry sources told the Financial Times. The government is considering ways to wipe out that debt, including new legislation, the FT reported. Legislation to wipe out debts would be highly controversial, as it would effectively destroy a privately held asset. It could make foreign investors more wary of investing in the UK. A debt-free British Steel would be a much more attractive prospect for a possible buyer for Scunthorpe, where two blast furnaces are operating. It is thought that the government would provide hundreds of millions of pounds for investment in a new electric arc furnace to produce much cleaner steel. That would secure Scunthorpe's longer-term future. The industry minister Sarah Jones on Tuesday said the government had so far provided £94m to British Steel for working capital needed to buy raw materials and pay salaries. Jingye bought British Steel in early 2020, after Boris Johnson's Conservative government bore the cost of running the company for several months during the search for a buyer. The previous owner Greybull Capital, an investment firm, walked away. However, the Jingye takeover, completed in March 2020, came just as the Covid pandemic began to disrupt global supply chains. The Scunthorpe plant was losing about £700,000 a day when Jingye announced plans to close it. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion The government had offered Jingye £500m in state aid to make the switch to electric arc furnaces, but the company, whose other steel facilities are all in China, asked for significantly more. The switch would also be financially risky for any buyer. Liberty Steel, the operator of the UK's biggest existing electric arc furnace in Rotherham, is in talks with creditors as it faces a winding up petition. Liberty, which is owned by the metal magnate Sanjeev Gupta, has not produced any steel for nine months. Liberty and the rest of the UK steel industry have long argued that British wholesale energy costs are too high to be competitive with rivals in France and Germany, let alone in China. British Steel and the UK Department of Business and Trade declined to comment. Jingye was approached for comment.
Washington Post
19-04-2025
- Business
- Washington Post
An unexpected Trump ripple: Britain nationalizes its last steel mill
LONDON — Britain's Scunthorpe Steelworks has weathered a lot of economic upheavals since it was started by investors in the Victorian era. It was nationalized after World War II, privatized anew in the Thatcher years and bought by a Chinese corporation in 2020. It is still standing, the country's last maker of virgin steel.
