British Steel: No10 ‘confident’ it will secure materials to keep plant running
The UK government is confident it will beat a race against time to keep the British Steel furnaces running after taking control of the plant from Chinese owners Jingye this weekend.
Civil servants and steel workers were rushing to secure the raw materials to keep the Scunthorpe site’s furnaces going – which supply Network Rail and critical manufacturers – before they ran out of time.
But No 10 has now said it is “confident” it will secure the supply of materials, with two ships docked nearby and another on its way to the UK.
It comes after business secretary Jonathan Reynolds declined to guarantee on Sunday that the government could get enough raw materials before existing supplies run out.
Union officials earlier said they were “hopeful” that the materials needed to keep furnaces burning at the plant will be delivered within the next 48 hours.
The Prime Minister’s official spokesman has now confirmed to journalists: “We are now confident in securing the supply of materials needed.”
He added: “Obviously we will be working with the management to identify further raw materials needed to keep a steady pipeline, and to keep the furnaces burning.”
Two ships carrying materials are docked at Immingham port, in North Lincolnshire, with “a third ship currently on route off the coast of Africa… making its way to the UK”, he said.
No 10 would not say whether money had been exchanged for the materials, and said they would reach the plant in the “coming days”.
British Steel negotiations
MPs and Lords passed an emergency law on Saturday giving the UK government control of the Lincolnshire site to prevent the owners closing the furnaces, risking almost 3,000 jobs.
It’s now crucial for the government to find enough new raw materials to keep the furnaces going, as if their temperature drops too long it is nearly impossible to switch them back on.
But dozens of businesses including steel producers Tata and Rainham Steel have offered to help.
The government and unions have also criticised Jingye for their approach. Treasury minister James Murray said the government was “negotiating in good faith with Jingye but when it became clear they were accelerating plans to close the blast furnaces, we had to step in”.
Roy Rickhuss, of the Community steel workers trade union, said Jingye were “seen to be working against the business” by “not ordering raw materials” and “turning away” supplies.
He claimed they wanted to “close the blast furnaces so they were going to import steel from China to run through our mills”.
But Downing Street insisted it was “not aware” of any “sabotage attempts” at the steelworks, but that Jingye wanted to “shut the blast furnaces” which “wasn’t an outcome we wanted”.
‘Essential national capacity’
Speaking to the BBC on Sunday, Jonathan Reynolds said: “If we hadn’t acted, the blast furnaces were gone, steel production in the UK, primary steel producing would have gone.”
He added: “So we’ve given ourselves the opportunity, we are in control of the site, my officials are on site right now to give us the chance to do that.”
But he argued to Sky News that he did not think the Chinese government was behind Jingye’s rejection of the UK government’s offer of £500m of support for British Steel.
However he said: “I actually think they will understand why we could not accept the proposition that was put to us, in terms of losing that essential national capacity.”
Reynolds also admitted the government expects to lose money running British Steel, but allowing it to collapse would have cost £1bn and the loss of virgin UK steel making.
British Steel has announced Allan Bell as interim chief executive officer and Lisa Coulson as interim chief commercial officer with immediate effect on Monday.