Latest news with #EAF
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Business Standard
a day ago
- Business
- Business Standard
Port Talbot's green furnace marks end of costly firefighting for Tata Steel
In July 2022, Tata Group Chairman Natarajan Chandrasekaran told the Financial Times that transition to green steelmaking hinged on the British government's support. Talks had been going on for two years, and the writing was on the wall: Without a deal within the next 12 months, the plant, Port Talbot, would close down. Port Talbot, Tata Steel's upstream steelmaking facility in South Wales, had largely been a drag on the company's bottom line since it acquired Anglo-Dutch steelmaker Corus in 2007. Government support was crucial as cash flows from the business fell short of funding the capital-intensive transition. Cut to July 14, 2025. An impassioned Chandrasekaran, while flagging off the construction of the electric arc furnace (EAF) at the plant, spoke of the ups and downs the site had faced. 'Many people, many naysayers probably thought that this day would not come. And that's why it's important,' he said. 'We got a job in hand, we got to execute. We are super committed to this project. That's why I wanted to be here today to show my personal and the Tata group's commitment.' Meltdown to makeover The EAF at Port Talbot brings the curtains down on carbon-intensive blast furnace (BF) steelmaking at the site and paves the way for low-carbon steel production. The heavy-end assets were at the end of life and carbon costs on the blast furnace process were high. The transformation, however, impacts close to 2,500 jobs, even as it secures 5,000. The BFs were decommissioned by the end of September 2024, a first on such a scale in the history of the company. Last week, as construction of the EAF kicked off, the steelworkers' union described it as a 'bittersweet' day. While it looked at it as a consequence of the devastating closure of the blast furnaces, it also acknowledged that a future for Port Talbot steelmaking was now secured. Getting to this point wasn't easy. From securing union support to navigating government negotiations, it was a web of complex stakeholder management. Years in the making The transformation to low-carbon steelmaking involves an investment of £1.25 billion. The UK government is backing the project with £500 million — the funding came through after a stretch of political churn in Westminster. Discussions for the support began under Prime Minister Boris Johnson. Till the time the deal was signed and sealed, the UK had cycled through another three prime ministers. In September 2023, Tata Steel and the Rishi Sunak-led Conservative UK government had agreed on a grant of £500 million. But in the July 2024 general elections, the Labour party landed a historic win, putting a question mark on the funding and the future of Port Talbot. The lifeline When Tata Steel acquired Corus in a £6.2 billion deal in 2007, it gained two key steelmaking sites: Port Talbot and IJmuiden in the Netherlands. The latter has been largely self-sustaining, whereas the structurally weak UK operations demanded substantial capital. Tata Steel disclosed in January 2024 that since the Corus acquisition, it had put in £6.8 billion in the UK towards improving steelmaking operations and processing sites, covering financial losses, pension restructuring costs, and providing additional capital support to service Tata Steel UK's share of debt. The closure of heavy-end assets at Port Talbot is expected to bring down the losses. The 3.2 million tonne (mt) EAF will be commissioned by the end of 2027. Downstream customers are currently being serviced with slabs from India, the Netherlands, and even the open market, reducing fixed cost. Arresting the drain The task before Tata Steel's management is clear, and the goal firmly defined. At its annual general meeting on July 2, Chandrasekaran told shareholders that the company was working towards becoming profit after tax (PAT)-positive. 'Losses in the UK will be wiped out. And going forward, this year or the next, it will become PAT-positive,' he said. The first step, however, could be to make it positive or neutral in terms of earnings before interest, tax, depreciation, and amortisation (Ebitda) this year. In FY25, UK Ebitda loss stood at £385 million. In a credit rating report dated June, Icra noted: 'Within the European operations, the UK assets were a weak link in terms of their cost position.' However, the EAF transformation will significantly improve the cost position of the UK asset and will, hence, arrest the drain in the company's consolidated earnings, it said. 'The UK operations have cost Tata Steel a lot over the years — in terms of management bandwidth and financial capital,' said Tushar Chaudhuri, research analyst, PL Capital (Prabhudas Lilladher). 'The leakage to earnings in the UK that impacted Tata Steel's consolidated balance-sheet should now stop. And the Netherlands operations are expected to perform much better this year, post the relining of the blast furnace. Over the next two quarters, Tata Steel's European operations should be Ebitda-positive.' Dutch support In the UK, Tata Steel is already on the road to decarbonisation. In the Netherlands, the plans are still in motion. The plan for the Dutch operations is to replace one of the two blast furnaces and coke ovens with direct reduced iron and EAF-based production by the end of the decade. Meanwhile, external vulnerability has prompted Tata Steel to review costs across regions as part of a transformation programme: A multi-pronged approach of maximising production efficiencies, lowering fixed costs, and optimising product mix and margins. In the Netherlands, Tata Steel plans to cut 1,200 jobs in phases as part of this exercise. But the cost-cutting drive is not just limited to the high-cost European outposts. Forging ahead Over the next 12 to 18 months, Tata Steel has set a cost takeout target of ₹11,500 crore across regions: India, the UK, and the Netherlands. In FY25, the cost takeout had stood at ₹6,600 crore versus FY24 levels across units. Rising geopolitical tensions, volatile steel prices, and impending auction of legacy iron ore mines in 2030 are among the challenges that are largely beyond Tata Steel's control. So it is focusing on what it can control — resetting its cost structure. On the cost takeout, Amit Lahoti, senior research analyst — Institutional Equities at Emkay Global, however, said, 'It is difficult to assess how much of the cost takeout will ultimately flow to the Ebitda. There are too many moving parts, such as steel prices and market conditions.' The company will also benefit from the expanded 5 mt capacity at Kalinganagar, Odisha, adding to its top and bottom line – with some of the additional volumes flowing in FY26. As things stand, the years of struggle with European business appear to be fading, new capacity is set to generate cash, and efforts to rein in expenses are gaining momentum. Could this be a new chapter in the century-old steelmakers' story?
Business Insider
4 days ago
- Business
- Business Insider
RBC Capital Sticks to Its Hold Rating for GrafTech International (EAF)
RBC Capital analyst Arun Viswanathan maintained a Hold rating on GrafTech International yesterday and set a price target of $2.00. The company's shares closed yesterday at $1.09. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. According to TipRanks, Viswanathan is an analyst with an average return of -3.6% and a 45.24% success rate. Viswanathan covers the Basic Materials sector, focusing on stocks such as DuPont de Nemours, PPG Industries, and FMC. The word on The Street in general, suggests a Hold analyst consensus rating for GrafTech International with a $1.40 average price target. EAF market cap is currently $273.6M and has a P/E ratio of -2.03. Based on the recent corporate insider activity of 15 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of EAF in relation to earlier this year. Most recently, in May 2025, Sachin M Shivaram, a Director at EAF bought 50,000.00 shares for a total of $42,300.00.
Business News Wales
5 days ago
- Business
- Business News Wales
National Grid Shares Plans for 'Vital' Network Upgrades to Support Port Talbot Green Steel Transition
National Grid is inviting residents and businesses in Margam to learn more about a 'vital' infrastructure upgrade that will support the transition to Tata Steel's new electric arc furnace (EAF) at Port Talbot and strengthen the local electricity network. The proposed Margam Connection Project will see the expansion of the existing Margam site with a new 275kV gas-insulated substation (GIS), details of which will be shared at the event. Plans for a second 275kV GIS on the Tata Steel site, and an underground cable connecting the two substations, were part of a separate planning process. The project is a key step in enabling green steel production at Port Talbot and in supporting local jobs, while also providing capacity for future energy connections in the region, National Grid said. On Monday Tata Steel broke ground on its EAF at Port Talbot, marking the start of construction on its new low carbon steelmaking facility that will be powered through the new substations. National Grid will be working with principal contractor Laing O'Rourke to build its two new GIS facilities, both using innovative switchgear technology which is free from sulphur hexafluoride (SF6) – a commonly used electrical insulator that is also a potent greenhouse gas. Using SF6-free insulating gas in the substations helps reduce the sites' physical and environmental footprints, and marks another step towards National Grid's ambition to reduce SF6 emissions from its network by 50% by 2030. Details for the Margam Connection Project's public information event are as follows: Date: Thursday 17 July 2025 Time: 2:00pm – 8:00pm Location: Margam Community Centre, 39 Bertha Rd, Port Talbot, SA13 2AP The project will hold a 28-day statutory pre-application consultation (PAC) before National Grid submits its planning application to Neath Port Talbot County Borough Council later this summer. Richard Gott, project director at National Grid Electricity Transmission, said: 'Our Margam Connection Project will help deliver a cleaner, more secure energy future for South Wales, while supporting sustainable growth in one of the region's key industries. 'By enabling the electrification of Tata Steel's operations, we're not only supporting the UK's transition to green steel but also helping to safeguard jobs and strengthen the local economy. We look forward to engaging with the community and hearing their views.' Laing O'Rourke's managing director for its Europe hub, Peter Lyons, said: 'We're proud to be part of the Margam Connection Project delivery team, continuing our partnership with National Grid. Through early collaboration, we have worked together on the design and implementation programme, National Grid has valued both our unique operating model and our technical expertise. This project is another fantastic example of how we're helping to deliver cleaner and more secure energy for the UK.' Across Wales and England, National Grid is planning £35 billion of investment in its transmission network between 2026 to 2031 to connect new clean power sources, help electrify the industries of today and tomorrow, and support economic growth in Britain.
Time of India
14-07-2025
- Business
- Time of India
Tata Steel begins construction of £1.25 billion Electric Arc Furnace in UK, aims to cut 5 million tonnes CO₂ annually
New Delhi: Tata Steel UK commenced construction of a £1.25 billion Electric Arc Furnace (EAF) at its Port Talbot site, with an aim to reduce carbon emissions by approximately 90 per cent or 5 million tonnes per year. The green steel project is supported by a £500 million investment from the UK government and is expected to be commissioned by the end of 2027. The groundbreaking ceremony was attended by Tata Group Chairman Natarajan Chandrasekaran, Tata Steel CEO and MD T.V. Narendran, and Tata Steel UK CEO Rajesh Nair, along with UK government ministers. 3 million tonnes of annual production capacity Once operational, the new EAF will melt UK-sourced scrap steel to produce up to 3 million tonnes of steel per year. It will be one of the largest electric arc furnaces globally. The project also includes new ladle metallurgy facilities and infrastructure upgrades, with partnerships from technology providers including Tenova, ABB and Clecim. Sir Robert McAlpine has been appointed as the main contractor, supported by a regional supply chain including Darlow Lloyd & Sons, Mii, Skelton Thomas, Wernick Buildings, Andrew Scott Ltd and Systems Group. 'A new era for sustainable manufacturing' '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,' Tata Group Chairman Natarajan Chandrasekaran said. '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.' Government reiterates support for steel sector UK Business Secretary Jonathan Reynolds said the project was part of the government's Industrial Strategy and reaffirmed support for the domestic steel industry. '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 said. 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.' Welsh First Minister Eluned Morgan added, 'Seeing spades in the ground today provides a tangible sign of Tata's intention to continue producing steel in the area.' The UK Government has also announced a £2.5 billion investment under its Steel Strategy to support the domestic industry, maintain employment, and drive industrial growth. The groundbreaking at Port Talbot marks a key milestone in Tata Steel UK's decarbonisation strategy and long-term commitment to sustainable steel production.>
Time of India
14-07-2025
- Business
- Time of India
Tata Group Chairman performs ground breaking of 1.25 bn pound green steel project in UK
Tata Group Chairman N Chandrasekaran on Monday held the ground-breaking ceremony at Port Talbot in the UK to kickstart the construction of a GBP 1.25 billion green steel project to cut down carbon emissions by 90 per cent at the site. The company is transitioning from the blast furnace route to the low-emission electric arc furnace process, which will utilise the locally available scrap. " Tata Steel UK today celebrates a historic milestone in its green transformation journey as Natarajan Chandrasekaran, Chairman of Tata Group, joins government ministers at a groundbreaking event for the company's state-of-the-art Electric Arc Furnace (EAF) facility in Port Talbot," the steel player said in a statement. Chandrasekaran was joined by Tata Steel CEO and Managing Director T V Narendran and Tata Steel UK CEO Rajesh Nair, for ground breaking which marks the official start of construction for the UK's largest low-carbon steelmaking facility. This is part of a GBP 1.25 billion transformation to low CO2 steelmaking, supported by a GBP 500 million investment from the UK Government. The joint investment by Tata Steel and the UK Government in green steelmaking at Port Talbot is the biggest in a generation and will secure 5,000 jobs across Tata Steel UK. Live Events The new EAF is set to be commissioned at the end of 2027 and is expected to reduce Port Talbot's carbon emissions by approximately 90 per cent, equivalent to 5 million tonnes of CO₂ per year, and 50 million tonnes over the next ten years. 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, said Chandrasekaran, who is also the chairman of Tata Steel. 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 GBP 500 million of funding to make this project possible. Our modern Industrial Strategy will set out how we'll back the sector even further to drive growth and create well-paid jobs across the country, as part of our Plan for Change." 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 GBP 500 million to secure its future in the town, along with GBP 80 million to support workers and the wider community. Our Steel Strategy will also deliver GBP 2.5 billion of investment to rebuild the UK industry, maintain jobs and drive growth. First Minister Eluned Morgan said: "This is a momentous day for heavy industry in Wales, as the electric arc furnace has secured the long-term future of steel making at Port Talbot. 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." India-based Tata Steel owned the UK's largest steelworks of 3 million tonnes per annum (MTPA) at Port Talbot in South Wales and employed around 8,000 people across all its operations in that country. To take forward its transition plan, the company shut its upstream operations in a phased manner amid workers' protests and job cuts. At present, Tata Steel UK is using substrate from India and Netherlands operations to service existing customers in the UK. PTI
