Government close to finalising £1.25bn Tata Port Talbot deal

9th Sep 2024 12:26

(Sharecast News) - The UK government is close to finalising a £1.25bn deal with Tata Steel to support the transition of its Port Talbot steelworks to more environmentally-friendly operations, it emerged on Monday.

According to Sky News, business secretary Jonathan Reynolds was set to update Parliament on the agreement.

It said the deal, negotiated after Labour's general election victory, included a £500m government grant aimed at helping the Indian-owned company shift from traditional blast furnaces to electric arc furnaces.

As part of the agreement, Sky said Tata Steel would contribute £750m, although the move was likely to result in the loss of nearly 3,000 jobs.

The ongoing negotiations were reportedly focused on finalising redundancy terms and retraining programmes for the affected workers.

A source close to the talks told Sky News that Tata Steel could commit to increasing its investment in the plant, depending on future business needs.

The business secretary's statement was expected to highlight the broader importance of steelmaking for the UK economy, although the government's full steel industry strategy would not be released alongside the announcement, Sky said.

At the same time, negotiations with the Chinese-owned British Steel - the UK's second-largest player - had stalled.

Sky said British Steel could close its Scunthorpe blast furnaces by December, further threatening thousands of jobs.

Reporting by Josh White for Sharecast.com.