REG - Tata Steel Limited - Tata Steel submits market rumour verification

TATA SteelAnnouncement

11/06/2024 07:30

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RNS Number : 9419R  Tata Steel Limited  11 June 2024

 

 

June 11, 2024

 

London Stock Exchange

London

 

Dear Madam, Sirs,

 

Sub: Tata Steel expresses concern at UK media reports on policy differences
between the UK government and the opposition on its transformation plan

 

This has reference to the above captioned subject.

 

In this connection, we wish to inform that, Tata Steel Limited (the
'Company'/'Tata Steel') confirms that it will continue with the announced
closure of the heavy end assets and restructuring program at Port Talbot in
the coming months.

 

Over the last three years, Tata Steel, part of India's Tata Group, one of the
UK's largest private sector investors and the UK Government have worked hard
to develop a sustainable future for Tata Steel UK and the Port Talbot Plant.

 

We are therefore apprehensive reading UK media reports suggesting that the
£1.25 billion investment, the largest in many decades in British steelmaking,
may be put in peril due to policy differences expressed by the Conservative
and Labour parties, during the ongoing election period. We urge and request
the current and the incoming government post-elections, to adhere to and
safeguard the agreed terms of the £500 million package of support for the
Electric Arc Furnace (EAF) project announced in September 2023. This project
has been developed to ensure production of low-emission high-quality steel in
Port Talbot, preserving primary steelmaking in Britain and creating the
potential for a future green manufacturing cluster in South Wales.

 

The current heavy end assets of Port Talbot are nearing their end of life, are
operationally unstable and are resulting in unsustainable financial losses.
The coke ovens, a critical facility for primary steelmaking, had to be closed
in March 2024, as operations became infeasible and unsafe.  Therefore, the
Company is compelled to continue with its plans to decommission Blast Furnace
#5 at the end of June, followed by decommissioning of Blast Furnace #4 by the
end of September. The downstream assets will continue to service customers by
utilising imported semi-finished steel till the new EAF is built and
commissioned.

 

In April, the Company completed an exhaustive 7-month process of
national-level formal and informal consultations on all options with the
Unions and concluded that the multi-union plan which involved continuity of
Blast Furnace #4 through the transition is not technically, operationally or
financially viable, putting the EAF build at risk and delaying the transition
by at least two years.

 

To mitigate the impact of the announced restructuring, a generous voluntary
redundancy programme has been developed and is being offered to the impacted
employees.

 

The proposed grant funding from the UK Government is ring fenced for building
the new EAF, which is critical to securing long-term supply of steel for Tata
Steel's UK downstream assets and protecting 5000 jobs in various Tata Steel UK
sites. It is not linked to the ongoing financial losses and the instability of
the existing heavy end assets, whose closure is now underway and immutable. We
are therefore concerned with the UK media reports since yesterday as further
political uncertainty on the timing and form of the grant will place the EAF
project and the long-term future of steelmaking at Port Talbot at significant
risk.

 

This clarification is being provided in terms of Regulation 30(11) of the
Securities and Exchange Board of India (Listing Obligation and Disclosure
Requirements) Regulations, 2015, as amended.

 

This is for your information and records.

 

 

 

 

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