Tata Steel begins Port Talbot EAF project as UK backs £500-mn investment

Business Standard

14-07-2025

Port Talbot in South Wales – Tata Steel's primary steelmaking site in the UK – is set for a new beginning as the company breaks ground on an electric arc furnace (EAF), signalling a shift towards low-carbon steel production.
To mark this milestone for Tata Steel and British steelmaking, Tata Group Chairman Natarajan Chandrasekaran will be joined by UK government ministers at a groundbreaking event scheduled for later on Monday.
Chandrasekaran will be flanked by Tata Steel Chief Executive Officer and Managing Director T V Narendran, and Tata Steel UK Chief Executive Officer Rajesh Nair, as they officially break the ground with spades, launching the construction of the UK's largest low-carbon steelmaking facility and marking a shift away from traditional blast furnaces.
Government support and job impact
The development is part of a £1.25-billion transformation towards low-carbon steelmaking, supported by a £500-million investment from the UK government.
The transition secures 5,000 jobs across Tata Steel UK, even as the closure of heavy-end assets is expected to impact 2,500 positions.
Leadership emphasises sustainability and partnership
In a statement ahead of the ceremony, Chandrasekaran said: 'This is an important day for Tata Group, Tata Steel and for the UK. Today's groundbreaking marks not just the beginning of a new electric arc furnace, but a new era for sustainable manufacturing in Britain.'
'At Port Talbot, we are building the foundations of a cleaner, greener future, supporting jobs, driving innovation, and demonstrating our commitment to responsible industry leadership. This project is also part of Tata Group's wider investment in the UK, across steel, automotive, and technology among others, which reflects our deep and enduring partnership with this country,' he added.
UK government hails strategic shift in steelmaking
Business Secretary Jonathan Reynolds said, 'This is our Industrial Strategy in action and is great news for Welsh steelmaking, backing this crucial Welsh industry, which will give certainty to local communities and thousands of local jobs for years to come.'
'This government is committed to a bright future for our steel industry, which is why we provided £500 million of funding to make this project possible,' he added.
Secretary of State for Wales Jo Stevens said: 'The UK government acted decisively to ensure that steelmaking in Port Talbot will continue for generations to come, backing Tata Steel with £500 million to secure its future in the town, along with £80 million to support workers and the wider community.'
'Our Steel Strategy will also deliver £2.5 billion of investment to rebuild the UK industry, maintain jobs and drive growth,' Stevens added.
First Minister Eluned Morgan said: 'The start of the construction phase is good news for Port Talbot and neighbouring communities, and I'm especially pleased that Tata has committed to employing local contractors and local workers where it can.'
Mixed reactions as union calls day 'bittersweet'
Steelworkers' union Community described the development as a 'bittersweet' day. In a statement, Community Assistant General Secretary Alasdair McDiarmid said: 'This bittersweet day is a consequence of the devastating closure of the blast furnaces, but importantly, a future for Port Talbot steelmaking is being secured. The workforce needs the electric arc furnace project to be both a success and a turning point, and we look forward to playing our part to get the new furnace up and running.'
Broader decarbonisation strategy and supply chain
As part of Tata Steel UK's broader decarbonisation strategy, the project will also include new ladle metallurgy facilities, infrastructure upgrades, and collaborations with technology providers such as Tenova, ABB, and Clecim.
The construction is being led by main contractor Robert McAlpine, supported by a strong regional supply chain that includes Darlow Lloyd & Sons, Mii, Skelton Thomas, Wernick Buildings, Andrew Scott Ltd, and Systems Group, the company said.