The company’s top executive warned that, in the worst event, various assets would be shut down as they approached end-of-life if the UK government did not support a green transition.
Chief Executive Officer and Managing Director of Tata Steel TV Narendran
The assets are nearing the end of their useful lives and cannot last for much longer. In a year or two, we will need to make a decision, according to TV Narendran, Tata Steel’s CEO and managing director.
Financial information on the last UK Government proposal was withheld by Tata Steel. In the past, media sources have estimated it to be worth £600 million for two businesses, including Tata Steel UK.
Tata Steel stated in a May 2 note for its March quarter financial results that it was closely monitoring the progress of discussions with the UK government because it was still unclear, based on initial and subsequent discussions, whether adequate support for the decarbonization strategy would be reached.
We are unable to finance the shift due to the company’s cash flow. The government has responded with a package that is not even close to what we are requesting, therefore discussions are still ongoing, according to Narendran in the interview from May 3.
The corporation receiving the package it seeks would represent the assets’ best-case scenario, he continued. The UK has a glut of scrap and is exporting it, which is our main argument.
Why shouldn’t a nation use that (junk) in the production of steel? he said.
- If there was no package, he continued, “…we will have to close them as and when separate assets come to end-of-life. If an asset is unsafe, we cannot manage it.
- It seems obvious that more upstream assets, particularly those that are vital, will expire over the next two years.
In FY22, 3.5 million tonnes of liquid steel were produced at Tata Steel’s Welsh Port Talbot Steel Works, which is operating at a loss.