A Teesside steel expert says the closure of a key British Steel site could have huge implications for the whole industry.

Steel jobs on Teesside look to be safe - for now - after British Steel announced the axe would instead fall on 260 jobs at its Scunthorpe coke ovens.

The Chinese-owned steelmaker said the move at its site in Scunthorpe was part of its drive to overcome global economic challenges and build a “green and sustainable future”.

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The news came as ministers considered a multimillion-pound rescue package for the struggling business.

But Chris McDonald, Chief Executive Officer of the Teesside-based Materials Processing Institute, the UK’s national innovation centre for steel and metals, said: “The closure of the Scunthorpe coking ovens is irreversible and will impact the national economy, as it produces such products as rails, beams and wire rod that are vital in supporting UK infrastructure and manufacturing.

“This announcement by British Steel and the resulting loss of 260 jobs underlines the urgent need for investment in new green steel technology, a process already well advanced in countries across Europe, the United States, and Canada.

“The UK is in real danger of being left behind in the race to establish a modern, competitive low-emission steel sector as high energy costs are making our own steel industry unsustainable, which makes it less attractive to invest in green steel.

“In the North-East, the rolling mills at Lackenby and Skinningrove, are dependent on feedstock from Scunthorpe, although I expect British Steel will import coke to keep its operations running.

“However, this closure may well be the thin end of the wedge, opening the door to much greater imports of steel in the future.”

China’s Jingye Group became the manufacturer’s third owner in four years when it bought British Steel out of insolvency in 2020. But now Jingye needs taxpayer funding to keep the doors open and losing jobs may not be what the Government wanted to see.

The company said its bills for energy and carbon increased by £190 million last year, adding that “decisive action” was required because of the “unprecedented rise” in operating costs, surging inflation and the need to improve environmental performance.

British Steel chief executive Xifeng Han said: “The Trade Unions are aware of our proposal to close the coke ovens and we look forward to working closely with them to ensure a long-term safe and sustainable future for the company, thousands of employees and many more people in our supply chain. We also continue to look at other potential cost-saving measures across the business and will announce any further proposed changes in due course.

“We appreciate this may be an unsettling period for our people and we will give them our full support. We haven’t set any deadlines but aim to keep the period of uncertainty for our colleagues as short as we can. We’ll ensure this process is handled in a sensitive manner.”

He also said: “Jingye is committed to our long-term future but decarbonisation is a major challenge for our business and, like most companies, we’re facing significant challenges because of the economic slowdown, rising inflation and exceptionally high energy prices.

“Our energy costs, carbon costs and labour costs are some of the highest across the world, which are factors that we cannot influence directly.

“For the reasons outlined, we entered into talks with the UK Government in summer 2022 and are extremely grateful for its support.

“It’s important we have the correct policies and frameworks in place to back our drive to become a clean, green and successful company and we’re continuing to discuss this with the Government."

He added: “We’re disappointed at having to make such proposals but are confident they will support a successful transformation.”

Unite general secretary Sharon Graham said: “British Steel workers are faced with the toxic combination of a greedy employer that is reneging on investment promises and a shambolic UK government that has no serious plan for the industry.

“Unite’s members in British Steel are clear that they will fight this and they will have the full support of their union.”

The Northern Echo: British Steel in DarlingtonBritish Steel in Darlington (Image: Newsquest)

Unite national officer Linda McCulloch said “This union has not yet seen any financial justification for the closure of the coking ovens. British Steel needs to come clean and open its books in order to try to justify its decisions.

“Unite will pursue every avenue, including industrial action, to defend members’ jobs at British Steel.”

British Steel employs around 4,000 people across the UK. The Scunthorpe Steelworks is the UK headquarters and the main blast furnace production site.

But there is also the Lackenby Beam Mill on Teesside which employs around 400, manufacturing large steel sections for the construction industry, including The Shard in London and the new World Trade Centre in New York.

The Skinningrove Steelworks makes special profiles, including sections and crane rail. Work is already underway on a £26million upgrade here, to include product milling, machining and warehousing operations.

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Products manufactured by employees at Skinningrove and Whessoe Road in Darlington include crane rail (developed for overhead gantry and floor-mounted cranes in ports, warehouses and shipyards), track shoes (for excavators and diggers) and wear-resistant steel for use in underground and surface mining operations.

The Government is reportedly considering cash injections into both British Steel and Tata Steel UK. Chancellor Jeremy Hunt is understood to be close to signing off on the support package, which could funnel around £300 million to British Steel, with an “equivalent” sum going to Tata.

But it is unclear what the latest threat of redundancies could now mean as Ministers had reportedly demanded that the companies had to protect jobs if they wanted the Government handout.