Tata Steel has confirmed it will receive £500 million from the UK government to upgrade its Port Talbot steelworks but warned as many as 3,000 jobs might be lost.
In total, the investment in the plant will be £1.25 billion with the Indian group putting in £750 million but it added consultations will start soon over a “deep potential restructuring”.
Tata had asked for hundreds of millions of pounds to keep the plant open and pay for its two coal-fired blast furnaces to be converted to green-powered electric arc alternatives.
Unions had earlier suggested that as a result of the funding some 3,000 out of Tata Steel UK’s 8,000 workforce would be shed and though this was not confirmed, a UK government statement said the deal would only safeguard around 5,000 jobs.
Branding the deal as a disgrace, Unite general secretary Sharon Graham said the plans were short-sighted and lacked ambition.
“Unite will be fighting tooth and nail not only to save these jobs but to create more jobs in steel.”
TV Narendran, Tata Steel’s chief executive, said: “We will undertake a meaningful consultation with the unions on the proposed transition pathway in the context of future risk and opportunities for Tata Steel UK.
“With the support of the UK Government and dedicated efforts of the employees of Tata Steel UK along with all stakeholders, we will work to transform Tata Steel UK into a green, modern, future-ready business.”
A spokesman for Downing Street added: “Simply maintaining blast furnace production was not an option with the steel industry needing a sustainable future using more modern technology and practices.”
Bringing in electric arc furnaces will “reduce the UK’s entire carbon emissions by around 1.5%”, he said.