Race to keep British Steel furnaces running with last-minute efforts to secure raw materials

Last-minute efforts to keep British Steel operating are to be carried out today, as the plant races to secure a supply of raw materials.

The Department for Business and Trade said officials are working to secure supplies of materials, including coking coal, to keep British Steel operational, as well as to ensure all staff at the Scunthorpe site will be paid.

It added that setting up new supply chains was “crucial” as a fall in blast furnace temperature could risk “irreparable damage to the site, with the steel setting and scarring the machinery”.

Exchequer Secretary to the Treasury James Murray told Sky News the raw materials are “in the UK” and “nearby” the Lincolnshire site.

“There are limits to what I can say because there are commercial operations going on here, but what we need to do and what we are doing is making sure we get those raw materials into the blast furnaces to keep them going,” he said.

Companies including Tata – which ran the now-closed Port Talbot steelworks – and Rainham Steel have offered managerial support and materials to keep the Lincolnshire site running.

Business Secretary Jonathan Reynolds said in a statement that “when I said steelmaking has a future in the UK, I meant it”.

“Steel is vital for our national security and our ambitious plans for the housing, infrastructure and manufacturing sectors in the UK,” he added.

“We will set out a long-term plan to co-invest with the private sector to ensure steel in the UK has a bright and sustainable future.”

Earlier this month, unions said the steelwork’s owner, Chinese company Jingye, decided to cancel future orders for the iron ore, coal and other raw materials needed to keep the furnaces running.

It meant the Scunthorpe plant had been on course to close down by May, bit it sparked urgent calls for government intervention.

Emergency legislation was passed on Saturday bringing the steelworks into effective government control, and officials were on site as soon as the new legislation came into force.

However, the business secretary has warned that does not mean the plant is guaranteed to survive.

A spokesperson for the Chinese Embassy urged the British government to act with “fairness” after passing legislation to take control of British Steel.

“We are following closely the developments of British Steel involving the Chinese private company,” the embassy spokesperson said.

“We have urged the British side to act in accordance with the principles of fairness, impartiality and non-discrimination and to make sure the legitimate rights and interests of the Chinese company be protected.

“It is an objective fact that British steel companies have generally encountered difficulties in recent years.

“It is hoped that the British government will actively seek negotiation with the relevant Chinese company to find a solution acceptable to all parties.”

Appearing on Sky News’ Sunday Morning With Trevor Phillips, Mr Reynolds also said he would not bring a Chinese company into the “sensitive” steel sector again.

“I don’t know… the Boris Johnson government when they did this, what exactly the situation was,” he added. “But I think it’s a sensitive area.”

Jingye stepped in with a deal to buy British Steel’s Scunthorpe plant out of insolvency in 2020, when Mr Johnson was prime minister.

The minister added that while The Steel Industry (Special Measures) Bill stops short of the full nationalisation of British Steel, “to be frank, as I said to parliament yesterday, it is perhaps at this stage the likely option”.

The Conservatives accused the government of acting “too late” and implementing a “botched nationalisation” after ignoring warnings about the risk to the steelworks.

Shadow business secretary Andrew Griffith said: “The Labour Government have landed themselves in a steel crisis entirely of their own making.

“They’ve made poor decisions and let the unions dictate their actions.”