The decision affects it’s plant in Scunthorpe
British Steel is planning to close the coke ovens at one of its plants, with the loss of up to 260 jobs, the company announced.
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 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: “Steel is vital to modern economies and with demand expected to grow over the coming decades, British Steel has a crucial role to play in ensuring the UK has its own supply of high-quality steel.
“To make sure we can deliver the steel Britain requires, we’re undergoing the biggest transformation in our 130-year history.
“To support the journey to net zero, our owners, Jingye, have invested £330 million in capital projects during their first three years of ownership and they continue to invest unprecedented sums of money in British Steel.
“Jingye is committed to our long-term future but decarbonisation is a major challenge for our business and, like most companies, we’re facing significant challenges because of the economic slowdown, rising inflation and exceptionally high energy prices.
“For example, last year our energy bill rose by £120 million while we’ve also faced an increase of over £70 million in our annual carbon costs.
“We have taken action to reduce costs within our control; however, steelmaking in the UK remains uncompetitive when compared to other international steelmakers.”
“Our energy costs, carbon costs and labour costs are some of the highest across the world, which are factors that we cannot influence directly.
“For the reasons outlined, we entered into talks with the UK Government in summer 2022 and are extremely grateful for its support.
“It’s important we have the correct policies and frameworks in place to back our drive to become a clean, green and successful company and we’re continuing to discuss this with the Government.
“We are committed to working together and to making the home-made steel Britain needs for generations to come.
“To build a secure future for British Steel, and protect skilled and well-paid careers for thousands of employees and many more in our supply chain, we are – like many other businesses – proposing to streamline our business.
“We’re disappointed at having to make such proposals but are confident they will support a successful transformation.”
The Unite union raised the threat of industrial action to fight the job cuts.
General secretary Sharon Graham said: “British Steel workers are faced with the toxic combination of a greedy employer that is reneging on investment promises and a shambolic UK Government that has no serious plan for the industry.
“Unite’s members in British Steel are clear that they will fight this and they will have the full support of their union.”
Unite national officer Linda McCulloch said: “This union has not yet seen any financial justification for the closure of the coking ovens. British Steel needs to come clean and open its books in order to try to justify its decisions.
“Unite will pursue every avenue, including industrial action, to defend members’ jobs at British Steel.”
Alun Davies, national officer of the Community trade union, said: “British Steel’s plan to close the coke ovens could have a catastrophic impact on jobs and steel production at Scunthorpe and the UK as a whole.
“This move would see the company depending on unreliable imported coke and puts at risk our sovereign capability to produce steel in the UK for strategic infrastructure such as our rail networks.
“We will not accept redundancies and nothing is off the table when it comes to protecting our members’ jobs.
“The Government must do whatever it takes to reach a deal with British Steel that protects the loyal workforce and the future of steelmaking in this country.”
Jonathan Reynolds, shadow business secretary, said: “Yet more worrying news for our steelworkers who desperately need a Government on their side securing the bright future our steel sector could have.
“Steel is the bedrock of many communities across the UK. It is the foundation our manufacturing sector is built on, crucial to any net-zero ambition and the beating heart of our sovereign capability.
“That is why Labour will partner with industry to invest in the new technologies needed to keep well-paid steel jobs in the UK for decades to come.”