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British Steel announces plans to close two blast furnaces, hitting 2,000 jobs

By Hugh Fort in Business News, posted November 8, 2023

British Steel has announced a £1.25 billion plan to close two blast furnaces which will affect up to 2,000 workers.

Workers in the town of Scunthorpe have been told of the plan to transition from blast furnaces to electric arc models, sidelining plans for carbon capture—a setback for the emerging British carbon-capture sector.

The strategy involves replacing Scunthorpe's blast furnaces with one electric arc furnace on-site.

Another would be built at a location in Teesside, North Yorkshire.

The blast furnace in Teeside closed in 2015 and was demolished last year.

British Steel needs government help

The move is dependent on help from the British government.

British Steel has asked for £500 million in government aid.

This would match the support given to Tata Steel, which operates two blast furnaces in Port Talbot in South Wales.

Tata Steel is expected to cut 3,000 jobs at the Port Talbot site.

Xijun Cao, British Steel’s CEO, acknowledged the consideration of decarbonizing the existing blast furnaces, which would likely involve carbon capture and sequestration beneath the North Sea.

However, he concluded "thorough analysis shows this is not viable."

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He highlighted "detailed studies show electrification could rapidly accelerate our journey to net zero and drive British Steel towards a sustainable future," ensuring the supply of steel for customer needs.

Unions are advocating for alternatives to shutting down blast furnace.

These include establishing direct reduced iron plants that utilize green hydrogen instead of coal.

Electric arc furnaces, which depend on recycled scrap, are incapable of producing steel from iron ore.

They also cannot manufacture the highest-grade steel required by the automotive and aerospace sectors.

Roy Rickhuss, the general secretary of the Community steelworkers’ union, said the closure of Britain’s blast furnaces “would leave the UK unable to make steel from raw materials and dangerously exposed to international markets”.

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