Tata Steel’s biggest steel-making factory in the UK is on schedule in its plans to start construction of its low-carbon EAF-based operations from July 2025, said top company officials.
Tata Steel CEO and MD, T V Narendran, and ED and CFO, Koushik Chatterjee confirmed in the company’s annual report for FY2024-25 that it had received necessary approvals for the project at Port Talbot.
“We have exited from steelmaking through the end-of-life heavy end assets in Port Talbot, and moved to a downstream model using imported substrate from India, the Netherlands and other external sources,” an official said.
The company's UK plant had shut operations in 2024 after recording £4 bn in losses since 2007. Ever since, its customers were being serviced from its India and Netherlands operations. However, light at the end of the tunnel appeared when the local Neath Port Talbot Council approved the steel-maker's plans to convert to “green steel” on February 18, 2025.
Although it meant that the UK’s biggest employer would still have to lay off almost 2,500 employees, the company said the transition would save as many as 5,000 jobs.
The USD 1.5-billion-pound joint investment plan with the UK government includes closing blast furnaces and switching to electric arc furnaces (EAF), which will help reduce on-site carbon dioxide emissions by 90 per cent compared to blast furnace-based steel-making.
“We are now transitioning to de-carbonised and state-of-the-art EAF-based steelmaking by FY2027-28, supported by 500 million pounds in the UK Government funding,” the management said.
The new furnace is set to start operations by 2027-end.
Speaking further on the UK plan, the officials said the structural transition is also accompanied by a significant focus on cost rationalisation as the company plans to bring down its fixed costs further from 762 million pounds in FY2024-25 to 540 million pounds in the coming year.
The reductions are based on optimising substrate costs, modernising IT infrastructure, rationalising downstream operations and eliminating corporate overheads.
Tata Steel’s Port Talbot plant housed ageing iron and steel-making assets including blast furnaces, coke ovens, harbour, and sinter plant, which are all now closed. Scrap steel, which is of abundance in the UK, would now be melted using electricity. Other raw materials, such as iron ore and coal, would need to be imported.
In October 2024, the company brought metals tech manufacturer Tenova on board to supply the new furnace, and in December 2024, JCB was contracted for supply of green steel. In January 2025, Sir Robert McAlpine came on as the project's mains works contractor, a report said.
In Q2FY24, Port Talbot dragged Tata Steel UK's business with a whopping ₹6,358 crore impairment charge due to the green shift. The company reported loss of ₹6,511 crore in the July-September quarter of FY23-24.
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