British Steel (PA)
(Picture: PA Archive)The owners of one of the biggest steel producers in Britain are seeking an urgent financial support package from the government, according to reports.
Jingye Group, the Chinese industrial group which bought the Scunthorpe-based steelmaker out of liquidation in 2019, fear that its two blast furnaces are unlikely to survive without government funding.
Insiders told the Sky News that it estimates the firm will need “hundreds of millions of pounds” to keep the blast furnaces operational.
One insider said that Jingye is prepared to make thousands of people redundant if ministers turn down its request.
It would then plan to import steel from China to roll at British Steel’s UK sites, according to the insider.
The Government has confirmed that it is “working at pace with the company to understand the best way forward as it seeks to secure a more sustainable future”.
A spokesperson for the Department for Business, Energy and Industrial Strategy said: “We recognise that businesses are feeling the impact of high global energy prices, particularly steel producers, which is why we have announced the Energy Bill Relief Scheme to bring down costs.
“This is in addition to extensive support we have provided to the steel sector as a whole to help with energy costs, worth more than £780m since 2013.”
A British Steel spokesman said: "We are investing hundreds of millions of pounds in our long-term future but like most other companies we are facing a significant challenge because of the economic slowdown, surging inflation and exceptionally high energy and carbon prices.
"We welcome the recent announcement by the UK government to reduce energy costs for businesses and remain in dialogue with officials to ensure we compete on a level playing field with our global competitors."
A blast furnace is a type of metallurgical furnace used for smelting to produce industrial metals, generally pig iron, but also others such as lead or copper.
British Steel directly employs around 4,000 people but thousands more jobs in the supply chain are also dependent on the firm.
