The UK government has approved funding for a critical 55,000-ton coal shipment, after being warned that supplies were running out. This move aims to prevent the closure of British Steel’s last remaining blast furnaces, which are essential for the company’s survival.
The coal arrived at Humber port in Immingham on a 6,000-mile journey via a diesel-powered ship. Though the exact cost of the shipment remains unknown, recent market prices indicate the shipment’s worth at approximately £7.2 million. The government is expected to cover the full cost of the delivery.
Conservative MP Neil O’Brien criticized the situation, pointing out the contradictions in the government’s energy policies. He said, “It’s completely absurd that just months ago, Ed Miliband banned coal and coke production in the UK, while now the government is scrambling worldwide to secure coal to keep British Steel’s furnaces running.” O’Brien argued that the UK’s energy policy has led to job losses and investment moving abroad, with the country now forced to import coal from other nations.
British Steel, acquired by the Chinese company Jingye Group in 2020, has been struggling financially. Jingye has spent £1.2 billion propping up the business, but negotiations for a government bailout are ongoing. The government is offering £500 million to fund the development of greener, electric arc furnaces to replace the outdated blast furnaces at the Scunthorpe plant.
Despite these efforts, some MPs, including Lee Anderson of Reform UK, criticized the government for importing coal while a local mine in Cumbria stands ready to supply the necessary coking coal. Anderson called the situation “absolute madness” and questioned why the UK continues to import coal from overseas, thus benefiting other countries economically.
However, Labour MP Clive Betts defended the government, arguing that the Cumbrian mine would not have solved the immediate issue, as it would have taken years to be operational.
The UK lost its ability to produce coking coal with the closure of the Kellingley Colliery in 2015. Since then, coal has been imported from countries like Australia, the US, and Japan to fuel British Steel’s blast furnaces.
As negotiations continue between British Steel and the Department for Business and Trade, the future of the company remains uncertain. Jingye is considering shutting down the Scunthorpe plant, which would result in 2,700 job losses. The government is also exploring the possibility of renationalizing British Steel.
The GMB union, which represents steelworkers, has called the current situation a “crunch day” for securing Scunthorpe’s future. The union has called for nationalization if a deal cannot be reached. Both the Department for Business and Trade and British Steel have declined to comment on the coal shipment but stated that talks are ongoing to find a resolution.
In response, Sir Keir Starmer emphasized the importance of supporting the steel industry, adding that “all options are on the table” as demand for steel is expected to rise.
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