Monday, January 16, 2023

News: Reaction to redundancies at Rotherham steelworks


The Government has come in for criticism following the announcement from Liberty Steel of a restructuring programme that will affect 440 roles - including 185 roles at its Rotherham sites.

The move has been described as a "body blow" that could have been prevented.

Part of Sanjeev Gupta's GFG Alliance, Liberty Steel said that some products had become unviable in the short term due to high energy costs and imports from countries without the same environmental standards.

Sarah Champion, MP for Rotherham, said: “I am sickened and beyond angry that a decade of failure from the Conservative Government on steel has led us to the point where 185 Rotherham and Sheffield steel workers face losing their livelihoods.

"It is not just 185 jobs, it is 185 families, the businesses in the supply chain and the economic identity of our town.

"Rotherham steel workers have been abandoned to their fate by a Government that has never understood the importance of our steel industry or made any effort to develop its enormous potential.

"There are simple steps the Government could have taken to prevent this; buy British steel for Government projects, provide competitive energy costs and address punitive business rates. Europe supports its steel industry – why won’t this Government?

"For ten years I’ve told the Government what needed to happen to ensure our steel industry could thrive. They have done nothing, and it is Rotherham families who will pay the price for their negligence."

Describing the UK steel industry as being on life support, Jeffrey Kabel, Chief Transformation Officer for Liberty Steel Group, said that "prices in the UK for steel makers stubbornly remain between 40% and 60% higher than our competitors in Europe."

Wentworth and Dearne MP, John Healey, said the announcement was "a big blow to Rotherham’s steel-making future, and a bitter disappointment for the loyal Liberty workforce.

"They’ve seen the company through really tough recent years with Covid, the collapse of its funder and sky-high energy costs. Now Liberty have pulled the plug on their plans to ramp up production in Rotherham, and it’s hard to have confidence in the future with such a savage cut in jobs and most steel-making mothballed.

"UK steel firms have been on the brink for the last decade, while Government has done too little to help keep our UK industry internationally competitive, especially on energy costs."

Director General of UK Steel, Gareth Stace, said that the restructuring announcement "highlights the significant challenges UK steel companies face navigating the current harsh market conditions. There will naturally be concern regarding the 440 jobs potentially impacted, but this is unfortunately an ongoing risk that accompanies a persistently uncompetitive business environment here in the UK, further exacerbated by global supply chain difficulties.

“High energy prices have played an important role in the decisions, with long-standing uncompetitive electricity prices having constrained UK investment and steel production for some time. This highlights again the need for government to fully address the UK’s structurally high industrial energy prices, looking beyond the important announcements made regarding the Energy Bills Discount Scheme earlier this week. It is crucial we also now see the development of a long-term decarbonisation plan for the sector, ultimately ensuring that the UK can be seen as an attractive place to invest in steel production.”

Primary production through Rotherham’s lower carbon electric arc furnaces (EAFs) will be temporarily reduced while uncompetitive operating conditions prevail but Liberty said that it was still committed to its longer-term aim of growing Rotherham into a 2 million tonnes per year green steel facility.

Looking ahead, Kabel, writing for The Mirror, added: "Many UK steel producers, Liberty included, have been funding losses during the past decade to maintain operations and employment. In the past two years alone, Liberty has invested £200m to keep the plants ticking over and workers livelihoods protected. Whilst this may be noble it has massively constrained our ability to invest in the future.

"Liberty runs electric arc furnaces at Rotherham that recycle scrap steel and emit just a tenth of the emissions compared to blast furnace operations. These units are scalable and could, indeed should, be the foundation for green steel production in our domestic market. To lose them would make a mockery of the UK’s net zero ambitions."

Liberty Steel website

Images: Liberty House


BHI January 16, 2023 at 1:13 PM  

So what is the solution? - Genuine question.

EAF's use electricity which seems to have higher energy costs (at present).
What is the solution to this, and will it save jobs if it can be implemented?

Or is this a forgone conclusion where manufacturing is moved to other geolocations where "costs" are cheaper?

Tom,  January 16, 2023 at 2:01 PM  

Liberty has a GREENSTEEL strategy that involves using renewable energy (potentially hydrogen) to power EAFs and recycle much more of the UK's steel scrap.

It would need investment and policy changes on things like energy prices, buying british steel, reducing cheap imports, not exporting our scrap.

The company said in its 2021 prospectus that "With relatively modest investment and the right policy framework, we can expand Rotherham’s capacity to two million tonnes per annum, which presents a real, achievable and low-carbon way to answer 30% of
domestic demand currently imported, using existing technology and using steel scrap constantly generated in the UK."

Supported by:
More news...

  © Blogger template Newspaper III by 2008

Back to TOP