Port Talbot, the Welsh town which is at the heart of Tata Steel’s British business, witnessed the formal groundbreaking of an electric arc furnace (EAF) by Natarajan Chandrasekaran, chairman of the Tata group, capping nearly two decades of the Indian company’s struggle to streamline operations and run profitably.
The EAF, being built at a cost of £1.25 billion, which includes a £500 million grant by Keir Starmer’s Labour government, will be ready by the end of 2027, replacing the blast furnace operations.
Chandrasekaran, who described the day as a ‘historic milestone’ was joined by Tata Steel CEO and managing director T.V. Narendran and Tata Steel UK CEO Rajesh Nair. They officially broke the ground with spades, marking the start of construction of the UK’s largest low-carbon steel-making facility.
The BFs and other heavy-end assets of Tata Steel UK (TSUK) were decommissioned in phases in 2024, leading to a job loss of around 2,000 workers. However, the transition saved 5,000 jobs, the company and the UK government said.
“This is an important day for the Tata group, Tata Steel and the UK. Today’s groundbreaking marks not just the beginning of a new EAF, but a new era for sustainable manufacturing in Britain,” Chandra said ahead of the event.
Save for two years, TSUK never made operational profit after the Tatas acquired Corus Group Plc in 2007 in a £6.2-billion deal.
In January 2024, Tata Steel had disclosed that it sunk £6.8 billion to cover losses, improvements in steel-making sites, pension restructuring costs and capital support to service TSUK’s share of debt.
At the event, Chandra recalled how the site went through several ups and downs. “Many people, many naysayers probably thought that this day would never come,” he pondered, adding that the Tatas were committed to the project
“We have a job in hand, we have to execute. We are super committed to this project. That’s why I definitely wanted to be here today to show my personal and the Tata group’s commitment,” he added.
With the EAF, using locally produced scrap and electricity as basic raw material, the Tatas are hoping to stem the decline. “Losses in the UK will be wiped and going forward, this year or next year, it will become PAT-positive,” Chandrasekaran had assured the shareholders in the AGM earlier this month.
In a statement, UK business secretary Jonathan Reynolds added: “This is our industrial strategy in action and is great news for Welsh steelmaking, backing this crucial Welsh industry, which will give certainty to local communities and thousands of local jobs for years to come.”
However, the Community union described the event as a ‘bittersweet day’, reminding of the ‘devastating closure’ of the BFs.