An offer has been made to British Steel by the government as it aims to ward off severe job losses or even closure, it is understood.
Sources close to the negotiations have told Business Live a deal has been put on the table. It comes as details emerged over the weekend that the Scunthorpe giant was poised to receive almost a third of a billion pounds to save it from collapse and help structure a cleaner future.
A £300 million package is understood to have been pulled together by the Treasury and BEIS, with the backing to be issued in instalments, should the Chinese-owned firm meet certain conditions.
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Soaring energy prices have hit the steelmaker hard, while demand shrinks as the economy slows. Negotiations started late last year, with chief executive Xifeng Han making the case clear in a recent statement.
Chancellor Jeremy Hunt is said to have engineered the support for the foundation industry giant, which employs almost 4,000 people in the UK - the majority in North Lincolnshire. It is thought the measures could also save the Government an even bigger bill should the business fall, Sky News has reported.
British Steel declined to comment, with government representative at BEIS not confirming or denying an offer had been made.
A spokesperson said: "The Government recognises the vital role that steel plays within the UK economy, supporting local jobs and economic growth and is committed to securing a sustainable and competitive future for the UK steel sector.
"The Business Secretary considers the success of the steel sector a priority and continues to work closely with industry to achieve this."
It is claimed the funding will be linked directly to attempts to get British Steel to decarbonise, by helping it to replace the company’s blast furnaces in Scunthorpe with electric alternatives. Renewables could generate the necessary energy requirement, with the world’s leading offshore wind farms connecting to the grid just 15 miles away on the banks of the Humber Estuary.
It is understood formal details could emerge in the coming days, with the backing dependent on protection of jobs, and a further £1 billion of private investment over the next decade.
Since being bought out of liquidation by Jingye Group in 2020 - completing just as Covid hit UK shores - £330 million has been invested.
Scunthorpe MP Holly Mumby-Croft has played a key role between government and the works. She raised the issue in Prime Minister’s Questions earlier this month, with a debate following last week.
Today she “encouraged all parties involved to find a solution and reach a deal to protect local jobs and ensure a future for a sustainable steel industry”.
On the potential significant advance in the negotiations, she said: “It is an absolutely massive step forward. It has become very clear over recent months that the government has a good understanding of how important steel is, not just locally in Scunthorpe, but on a national, strategic level. It is something I have constantly raised in parliament with MP colleagues and ministers. We cannot be the only G20 nation that doesn’t have the ability to make its own steel. We need steel for everything we do, from the moment we get up to when we go to bed, it is so interwoven in our lives.”
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