British Steel will not revisit arc furnace plans
British SteelBritish Steel said it would not revisit plans to build an electric arc furnace (EAF) at one of its plants, even though it was consulting on the closure of an alternative site for the machinery.
It was reported in January the firm had shelved plans to build an EAF in Lackenby, near Redcar, in favour of building two at its Scunthorpe factory, which is at risk of closure.
Conservative Tees Valley Mayor Ben Houchen said the Scunthorpe proposals had been unworkable and "economically flawed", as he criticised the government's handling of the situation.
The Department of Business and Trade declined to comment on Mr Houchen's claims but said it had committed £2.5bn to rebuilding the sector.
On Thursday, British Steel said its two blast furnaces in Scunthorpe were "no longer financially sustainable" and launched a consultation into closing the factory, a move which has put 2,700 jobs at risk.
Houchen said he had warned the government the deal to move the arc furnace plans entirely to Scunthorpe would end in collapse.
"We had a serious deal on the table to bring an electric arc furnace to Teesside," he said.
"It would have secured jobs, attracted investment, and delivered a long-term future for green steelmaking in the UK. For whatever reason, that deal was quietly dropped."
A spokesperson for British Steel said while the Scunthorpe facilities were being consulted on it would continue to operate its rolling mill in Skinningrove, Redcar.
'Steel is our identity'
On Wednesday, Industry Minister Sarah Jones told the Business and Trade Select Committee British Steel's owner, Jingye, had rejected a deal from the government, which the BBC understands involved a cash injection of £500m.
In a joint statement, local Labour MPs Anna Turley and Luke Myer, along with Redcar and Cleveland Borough Council leader Alec Brown, said they were "deeply concerned" about Jingye's rejection of the offer.
"This development raises the possibility of impacts on workers at Lackenby and Skinningrove, as well as their families and our communities," they said.
"Steel is not just an industry, it is part of our identity. For generations, steelworkers have been the backbone of our communities, and we are determined they will remain so in the years ahead."
Unions Community, GMB and Unite have called on the government to do everything it can to secure the Scunthorpe site, including using £2.5bn it had set aside for the steel industry.
"Jingye's announcement is devastating and sets up a disastrous cliff edge for British Steel and its dedicated workforce," said Community assistant general secretary Alasdair McDiarmid.
"We urge the company and the government to conclude an agreement to prevent a catastrophic outcome."
Business and Trade Secretary Jonathan Reynolds said he understood it was a "deeply worrying time for staff" and he would work tirelessly to reach an agreement with the company.
British Steel chief executive Zengwei An has said consultations on the closure were "a necessary decision given the hugely challenging circumstances the business faces".