British Steel will consult about the closure of its Scunthorpe steelmaking operation and two blast furnaces. This would put 2,700 of a 3,500-strong workforce at risk.
The company stated that the Jingye Group, which is the largest shareholder in British Steel, has invested over PS1.2bn since 2020 to maintain the operations at the Lincolnshire facility despite “ongoing production uncertainty” and significant financial loss of approximately PS700,000.
The decision was made that blast furnaces and the steelmaking operation are no longer economically viable due to higher environmental costs and tariffs imposed on the production of high carbon steel.
The company stated that it had requested support from the UK Government for a large capital investment in new electric arc kilns. Despite months of negotiation, the company said that no agreement was reached.
British Steel announced that it will begin formal consultations with its employees and unions today (27th March 2025). The consultation will include three options.
- By early June 2025, the steelmaking and blast furnace operations at Scunthorpe will be closed.
- Closed blast furnaces, steelmaking in September 2025
- Closure of blast furnaces and the steelmaking operation at a point in time beyond September 2025
British Steel’s CEO Zengwei A said, “We know this is a very difficult day for all of our employees, their families and anyone associated with British Steel.”
“But, we think this is the right decision in light of the extremely challenging conditions the company faces.
“We are committed to continuing our engagement with our employees and unions as well as suppliers and customers throughout this period.”
Gareth Stace is the director general of UK Steel. He said that British Steel’s announcement marked a “turning point” in the industry and that the steel sector was “officially experiencing a crisis”.
Roy Rickhuss, the general secretary of Community Unions, called it a “dark day” and asked Jingye to “resume negotiations before it’s too late”.
He said: “Our national security is seriously threatened. It is not an exaggeration that we are on the verge of becoming the sole G7 country with no domestic primary steelmaking capability.”
The GMB union described it as “devastating” news for Scunthorpe residents, while Unite General Secretary Sharon Graham called the possible job losses “a disgrace”.
She said: “British Steel has been guilty of holding the government ransom while using its dedicated workers as pawns.”
Graham continued: “In conversations with Unite the government clearly moved, and has made a proposal to invest heavily into British Steel (Jingye). This offer includes long-term employment guarantees. Anything less would be an absolute misuse of taxpayers money. British Steel must now make the commitments necessary.
“British Steel has to withdraw its threats of job losses and work with government and Unite in order to find a way forward that is sustainable and works for the workers, the communities and the economy as a whole.
British Steel, which is a leading producer of green steel in the UK, should lead this transformation.
Unite was responsible, prior to the general elections, for ensuring that Labour would create a PS2.5billion steel fund in order to support the transformation to net zero of the UK’s steel industry and the production green steel. Since entering government, Unite has kept its commitment and is currently consulting about the steel plan.
The UK safeguards that prevent cheaper Chinese steel from flooding the UK market expire 2026. British Steel is now even more concerned about the future of the steel industry in the UK.
Subscribe to our weekly HR news and guidance
Every Wednesday, receive the Personnel Today Direct newsletter.
Personnel Today has the latest HR job openings.
Browse Human Resources Jobs
