The UK government has secured a steel plant after emergency legislation was passed to prevent its closure. British Steel’s Scunthorpe plant is Britain’s last blast furnace capable of producing virgin steel, used in major construction projects.
Government Secretary Jonathan Reynolds refused to confirm whether the plant will remain open due to concerns over raw material supplies. However, he stated that the takeover gave the opportunity to obtain coal needed for production and allowed the government to maintain steel production in the UK.
The emergency legislation “enables” the government to keep the blast furnaces working, but once a furnace is switched off, it becomes difficult to restart production. The Conservative party has criticized the government for not stepping in sooner, calling the deal a “botched nationalisation”.
Reynolds argued that the takeover was essential and came after “it became clear” that Chinese-owned company Jingye was intent on closing down the plant. However, Jingye rejected an offer of £500 million support, instead demanding more with few guarantees.
The government is now looking for a buyer to take over British Steel, with Reynolds stating he would not sell it to another Chinese company. The takeover’s cost to taxpayers remains uncertain, but Reynolds argued that the market value of the company is “effectively zero”.
Source: https://www.bbc.com/news/articles/c87p3lep19yo