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British Steel, owned by Jingye, is nearing a rescue deal with the UK government that could unlock hundreds of millions of pounds in taxpayer aid.
Jingye has appointed PwC to assist in finalizing a business plan and negotiations over state aid, signaling its commitment to British Steel’s long-term future.
The rescue plan includes investing billions of pounds into transitioning to greener forms of production over the coming years. While the exact amount of taxpayer aid has yet to be finalized, Jingye is reportedly seeking up to £600 million in UK subsidies.
British Steel, which employs 4,500 people in the UK, was acquired by Jingye out of insolvency in 2020. Concerns have persisted about its long-term plans, particularly regarding the state of its finances and the need to invest in its blast furnaces.
Jingye began discussions with ministers 18 months ago about financial aid to transition to electric arc furnace (EAF) production. The plan involves splitting future production between its current works in Scunthorpe and a new site at Teesside, marking a return of steelmaking to Teesside for the first time since 2015.
While the switch to EAF production may lead to job losses, Jingye is considering proposals to keep its blast furnaces running in Scunthorpe while it builds its two EAFs, potentially limiting forced redundancies.
Kemi Badenoch, the business secretary, visited British Steel’s works in Scunthorpe and the proposed plant in Teesside, indicating government support for the plan. Local authorities have already granted planning permission for the Teesside site.
British Steel remains confident that its proposals, with appropriate support from the UK government, will secure low-embedded-carbon steelmaking and thousands of jobs while meeting the steel needs of the UK for generations to come.
