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Tata Steel’s UK business recorded an almost fourfold increase in pre-tax losses last year after it wrote down the value of its legacy steelmaking operation in south Wales as part of a taxpayer-funded move to greener forms of steelmaking.
Britain’s largest steelmaker, which owns the Port Talbot site in Wales, made pre-tax losses of £1.12bn in the 12 months to the end of March 2024, up from £279mn the previous year, according to newly filed accounts at Companies House.
Tata said that restructuring and impairment charges, related to its decision to close its coke ovens and two carbon-intensive blast furnaces in the coming year, totalled £625mn.
Revenues for the year also declined, down 16 per cent to £2.6bn due to lower steel prices and deliveries, according to the accounts.
The Indian-owned group closed the last of its two remaining blast furnaces in September after agreeing a £500mn deal with the Labour government to help it build a less carbon-intensive — but also less labour-intensive — electric arc furnace. The deal, which included a commitment by Tata to invest £750mn, has led to about 2,500 jobs being lost.
Tata said in its accounts that following the signing of the agreement in September, its UK business would have access to funding of “at least £1bn of equity” from its parent company and £500mn from the UK government to “contribute towards the costs of the project”.
Britain’s steel industry has in recent years suffered from low steel prices and high operating costs, which have eroded the competitiveness of the sector. At the same time, pressure has mounted to reduce its carbon footprint as part of the government’s pledge to reach net zero emissions by 2050.
Chinese-owned British Steel, which now operates the country’s only two remaining blast furnaces at its flagship site at Scunthorpe in Lincolnshire, remains in talks with ministers about securing similar taxpayer support from the government. An agreement has so far proved elusive, prompting fears the company could close the furnaces without a deal, putting thousands more jobs at risk.
The government has admitted that nationalisation of the steelmaker is a last-resort option if funding talks fail in the coming months. British Steel told the Financial Times this week that it was in “ongoing discussions” with the government about its decarbonisation plans, adding that “no final decisions have been made”.
