Hundreds of jobs in danger as British Metal consults unions over closure

Britain’s second-biggest metal producer is kicking off a session that might result in the closure of its two blast furnaces and greater than half of its workforce dropping their jobs – a transfer that can pile strain on the federal government to enhance a suggestion of taxpayer assist to the corporate.

Sky Information has learnt that British Metal was on Thursday morning in discussions with commerce unions a couple of redundancy course of that might lead to between 2,000 and a couple of,500 workers being axed out of a workforce of three,500.

One commerce union supply mentioned that conferences had been going down with a public announcement about plans to speed up the closure of Scunthorpe’s two blast furnaces probably afterward Thursday.

The launch of the redundancy session comes amid an deadlock between Jingye Group, British Metal’s Chinese language proprietor, over a authorities subsidy package deal to help the corporate’s transition to greener metal manufacturing.

Sarah Jones, the trade minister, instructed MPs that talks had been persevering with, whereas an pressing query is anticipated to be answered within the Home of Commons on Thursday.

The £500m proposal – aimed toward facilitating the Scunthorpe-based group’s transition to inexperienced metal manufacturing – follows years of talks aimed toward salvaging the way forward for the UK’s second-biggest producer.

Its scale is equal to the sum awarded to the bigger Tata Metal as a part of a £1.25bn package deal finalised final yr.

Whitehall sources mentioned that Jingye’s marketing strategy would contain a smaller variety of jobs being reduce if a swap to electrical arc furnaces occurred, with the redundancies additionally staggered over an extended interval.

Nonetheless, the Chinese language group has argued that that transition would solely be potential with a bigger sum of presidency funding, they added.

In an announcement despatched to Sky Information, the Group union’s normal secretary, Roy Rickhuss, mentioned: “It is a darkish day for our metal trade and for our nation.

“We urge Jingye and the UK Authorities to get again across the desk to renew negotiations earlier than it’s too late.

“Cruciallly, Jingye haven’t dominated out retaining the blast furnaces throughout a transition to low carbon steelmaking if they will safe the backing of the Authorities.

“The closures at Scunthorpe would characterize a hammer blow to communities which had been constructed on metal, and the place the trade nonetheless helps 1000’s of jobs straight and 1000’s extra by way of in depth provide chains.

“On condition that we at the moment are on the cusp of changing into the one G7 nation with out home major steelmaking capability, it’s no exaggeration to say that our nationwide safety is gravely threatened.

“This could be catastrophic at any time, not to mention within the present period of geopolitical instability and volatility. Metal is a vital part of defensive infrastructure, simply as it’s to wider plans to spend money on development throughout the nation.

The rejection of the £500m provide leaves Scunthorpe’s future on a knife-edge, though Whitehall sources mentioned that every one events concerned within the negotiations had been hopeful {that a} deal may but be struck.

Nonetheless, the package deal supplied to this point falls effectively wanting the sum that Jingye has been in search of from the federal government throughout a number of rounds of talks since Labour received final summer season’s normal election.

The Chinese language-owned group is believed to have requested £1bn or extra from ministers – double the quantity handed to Tata Metal, proprietor of the Port Talbot steelworks in South Wales, final autumn.

British Metal, which was taken over by Jingye in 2020 after a spell in public possession, employs a number of thousand folks at its websites in Scunthorpe, Teesside and elsewhere.

It has been pushing for taxpayer funding to assist a transition to inexperienced steelmaking by changing Scunthorpe’s two blast furnaces with cleaner electrical arc furnaces.

Stories late final yr recommended that nationalisation was an choice being explored by ministers.

The federal government’s proposal comes at a deeply delicate time for Britain’s metal trade, with fears of swingeing US tariffs exacerbating issues that the sector’s viability shall be put in danger.

Final month, Mr Reynolds revealed the federal government’s Plan for Metal session, which can embody as much as £2.5bn in funding for the trade, consistent with a dedication in final yr’s Labour election manifesto.

“The UK metal trade has a long-term future below this authorities,” he mentioned.

“Britain is open for enterprise, and this authorities has dedicated as much as £2.5bn to the way forward for metal to guard our industrial heartlands, keep jobs, and drive development as a part of our Plan for Change.”

Throughout the identical month, Mr Reynolds held additional talks with Jingye Group’s boss, Li Huiming, within the newest chapter of a negotiation which has been dragging on for greater than two years.

British Metal was purchased by Jingye the yr after it was positioned into obligatory liquidation.

The corporate had been owned by personal funding agency Greybull Capital.

British Metal declined to remark, whereas a spokesperson for the Division for Enterprise and Commerce additionally declined to remark.