Iakov Kalinin/Adobe Stock
After 10 months of many false starts and tens of millions of pounds of taxpayers’ money pumped into the company to keep it going, the purchase of British Steel’s U.K. assets at least appears on the verge of completion next week.
According to The Guardian newspaper, Jingye Group of China has agreed to pay £70 million for British Steel and pledged to invest £1.2 billion over the next 10 years to modernize the Scunthorpe and Teesside steelworks, despite one of the crown jewels in the group currently remaining in limbo.
Following objections by the French government, British Steel’s Hayange plant is not, as yet, part of the deal, although no doubt Jingye is hoping Paris will relent and agree to terms.
The Hayange factory is considered a strategic national asset because it supplies track to France’s rail network, the paper states. The risk that the government might veto Hayange transferring to Chinese ownership was seen as a potential obstacle to Jingye’s purchase because the plant is one of the few profitable parts of British Steel.
Some 3,200 workers have been formally offered contracts of employment following the takeover and 400 have been advised they will be made redundant as the new owners look to make the group viable.
British Steel has struggled to turn a sustained profit for years. Realistically, the £1.2 billion of investment over 10 years probably represents blast furnace refurbishment and plant and equipment upgrading, rather than being sufficient for a transformational change to the company.
Electric arc furnaces were mooted by a rival buyer as the way to go, providing greater flexibility and better environmental credentials; as of yet Jingye’s plans are not clear.
Still, for the employees, taxpayers and British Steel’s customers, a transfer to a viable new owner is good news.
Maybe the iconic name may now live on, even though it represents only a remnant of what was once one of the largest steel industries in the world.