By Sam Tabahriti and Dominic Lipinski
SCUNTHORPE, England (Reuters) – Britain expressed confidence on Monday that it could secure enough raw materials to keep the blast furnaces burning at its last maker of virgin steel, after the government seized operational control from its Chinese owners.
Ministers said British Steel’s owners, China’s Jingye Group, had wanted to shut the furnaces at the loss-making Scunthorpe plant after they rejected a government funding proposal, a move which would force Britain to import steel instead.
The government recalled parliament at the weekend – the first Saturday recall since the 1982 Falklands War – to pass emergency legislation and give it powers to direct the company’s board and workforce, and to order raw materials.
By Monday morning it had approved the appointment of an interim chief executive and chief commercial officer – both long-term employees of the plant – and said it had established that enough raw materials were in the country.
A spokesperson for Prime Minister Keir Starmer said two shipments containing iron ore, pellets and coking coal had docked at a local port, with a third on its way.
“We are now confident in securing the supply of materials needed,” the spokesperson told reporters. “Obviously we’ll be working with management to identify further raw materials needed to keep a steady pipeline and to keep the furnaces burning.”
Treasury department minister James Murray said earlier on Monday that the focus was on getting the materials into the blast furnaces, and said if the government had not acted on Saturday the blast furnaces would be closing.
A number of businesses, including India’s Tata and local distributor Rainham Steel, have also offered managerial support and raw materials, the government said.
The dispute risks straining ties between London and Beijing, which Prime Minister Keir Starmer’s Labour government had sought to improve, at a time when nations around the world are trying to deepen trading cooperation after the U.S. tariff shock.
Jingye has not commented, but China called for fair treatment of its companies and resolution through consultation.
The furnaces in the northeastern city of Scunthorpe need to be constantly fuelled and are losing 700,000 pounds ($922,000) a day.
Their output is used in the rail network, construction and automotive industry. Without the plant, Britain would be reliant on imports at a time of trade wars and geopolitical instability.
The intervention at a site which employs 3,500 people and more in the supply chain prompted Britain’s business minister, Jonathan Reynolds, to say on Sunday that China was no longer welcome in Britain’s steel sector.
CHINA: ‘ACT FAIRLY’
The Chinese embassy in London said it was following the situation closely, hoped Britain could find a solution acceptable to all, and noted that British steel companies had generally encountered difficulties in recent years.
“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,” an embassy spokesperson said.
Beijing’s foreign ministry urged Britain not to politicise trade, so as to protect the confidence of Chinese investors.
British Steel has not commented on the dispute but did announce on Monday the appointment of Allan Bell as interim chief executive and Lisa Coulson as chief commercial officer to ensure “consistent and professional leadership” at the plant.
The company was already struggling in an over-supplied global market before the rise in energy costs of recent years. U.S. tariffs of 25% on all steel imports, taking effect in March, delivered another blow.
The Community union representing workers at the plant welcomed the government intervention, as did industry trade body UK Steel.
Closure of the furnaces would leave Britain as the only G7 wealthy nation unable to produce so-called virgin steel from iron ore, coking coal and other inputs. The government says nationalisation of the plant is now a likely option.
($1 = 0.7590 pounds)
(Reporting by Sam Tabahriti in London; Additional reporting by Xiuhao Chen in Beijing and Muvija M; Writing by Kate Holton; Editing by Andrew Cawthorne)
