Tata Steel CEO TV Narendran lays out proposals for sustaining the UK business

Mr Narendran said: “It is a very difficult day, we fully empathise with that. It’s not something we would have liked to happen but I think we tried very hard over the last 15 years to preserve the site. We've had a lot challenging times, our employees have worked together with us through these challenging times and made sacrifices. But we've reached a stage where continuing as we did is no longer an option and creating a sustainable future is what we think is the best way forward.”

“We have invested something like £5 billion to keep the business going, so it is not that we have given up in a hurry, it's not that we have not tried hard enough. But now the question is, how do we create a future which is sustainable? How do we create a future where we are not always so fragile and standing at the edge of a cliff? How do we build a future for steel-making, which keeps up with the times because you need to have low-carbon steel making?

“We felt the best way to secure the future is by taking advantage of the scrap that is available in the UK, rather than using imported iron and coal to make steel here. Companies across the world are shifting over to scrap-based steelmaking and in Europe it's already happening, so why should we not do it.”

He continued: “We've had many conversations with the unions, particularly over the last four months. We’ve seriously considered their proposal, we've looked at all the details, we've incorporated some of the suggestions into our plan. But there are multiple challenges: the financial challenge is that it would  cost something like £600 million more to keep running the blast furnace. In addition, there’s an additional £200 million cost to the project and then on top of that there would be a project delay of at least 10-12 months.”
“Obviously we do believe that our proposed way forward is the best way forward to secure the future of the Port Talbot site.”

Mr Narendran went on to answer questions about the £500million funding the company will receive from the UK Government: “This money is available to us when we start constructing the new plant.  The £1.25bn plan is to build the new steel plant, so any losses that we incur - which is almost £1.5m a day now - is to Tata Steel’s account. That is in addition to what we’re investing to build the new plant.”

Asked whether he was prepared to guarantee that the electric arc furnace will actually be installed, Mr Narendran said: “Absolutely. In fact we want to get started as soon as possible. We have already started discussing suppliers, and once we are through with this we want to place the orders.

"The other challenge was the electricity supply to Port Talbot because the load that we need is much higher when you have an EAF. Originally, we were told that the permitting process and the upgrade would take 5 or 6 years, but they've done a great job and assured us that by 2027 that should be in place which allows us to build the EAF also by 2027 if we can get all the other issues behind us.

“It’s very important to start construction as that may start to address some of the concerns of the local community. If you spend a billion pounds building something, a lot of the money will flow here.”

Source and Photo: Tata Steel in Europe