British Steel could be bringing steelmaking back to Teesside

The Echo understands British Steel are talking to unions this morning about their plans for the future of the industry - which would include an electric arc furnace being built alongside the site of the former Redcar Blast Furnace at Teesworks.

The operation would be a considerably smaller version of what once stood there, but it would once again be a key part of the UK's steel operation, with huge investment and the highly-charged return of steel careers to the region.

The BBC are reporting British Steel plans to close down its blast furnace in Scunthorpe, putting up to 2,000 jobs at risk.

The business, owned by China's Jingye Group, wants to replace it with two electric arc furnaces (EAFs) - one at Scunthorpe and one at Teesside.

The construction is expected to take between two and three years.

British Steel said it aimed to transform the firm into a "green and sustainable company" and had to look at different scenarios to help it do this.

Sources at the Department for Business say the proposals are part of a plan, involving a package of taxpayer support of up to £500m for British Steel which mirrors a package agreed for rival Tata.

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Plans for the decarbonisation of the industry are vital if Chinese owners Jingye are to get the huge amounts of Government support they need. So the company is believed to be telling its workers they will secure the future of the main Scunthorpe site with a new much greener arc furnace - and put one on Teesside as well after a huge surge in demand here as building work takes place at Teesworks and across the North East.

One decision that will be made in the talks today is where the larger of the two furnaces will be sited. British Steel may be tempted to place it at Scunthorpe as they try to repair shattered relationships with the unions, but a 'fresh start' at Teesside and the iconic nature of the industry's return could bring it our way.

Only a few weeks ago The Echo reported on the possibility of British Steel bringing a furnace back to the region.

The whole process was described as "complicated and difficult to achieve" but could clearly bring a huge boost to the region as new technologies and greener industries become the backbone of our rebuilt economy.

Tees Valley Mayor Ben Houchen said in September: “Whilst I can’t discuss any particular investor I may be speaking to, securing the return of steelmaking to Teesside is complicated and difficult to achieve, but I promised to bring steelmaking back to Teesside and I deliver on my promises.”

Read more:

• What we said back in September about the arc furnace plans

At the same time, a British Steel spokesperson who wouldn't confirm any plans for individual locations told us:  “While decarbonisation is a major challenge for our business, we’re committed to transforming British Steel into a green and sustainable company providing long-term, skilled and well-paid careers for thousands of employees and many more in our supply chains.

"As part of our journey to net zero, it is prudent to evaluate different operational scenarios to help us achieve our ambitious goals.”

Electric Arc furnaces (EAF) are a method of steel production which uses electricity to melt scrap metals. The use of oxygen lances to inject oxygen direct into the raw material and melt, reduces more costly electrical energy.

Chris McDonald at the MPI foundry, which has its own arc furnace (Image: Newsquest)

Chris McDonald, CEO of the Materials Processing Institute in Middlesbrough, which has its own much smaller arc furnace, said: “The suggestion that British Steel would install an Electric Arc Furnace on Teesside isn’t just about going green, it is about improving productivity too.

“I first made this proposal in 2007, to eliminate the high cost of transporting steel slabs from Scunthorpe to the Teesside Beam Mill. If this proposal goes ahead, it will be good news for the environment and good news for the Teesside Beam Mill.

Read more:

• Our in-depth profile of Chris McDonald at MPI

“We must remember though that it is not good news for the many workers in Scunthorpe where jobs will be lost as a result of this transition. That is why I’m also calling for investment in a “Just Transition” where new green industry and retraining are targeted at areas where jobs are at risk.

"It is vitally important for these communities and for the success of new green industries, such as vehicle batteries and offshore wind.”

Now it looks as if the reports and hopes may be true. This is certainly not good news for hundreds of steelworkers at Scunthorpe who will lose their jobs, but as we found so painfully at Redcar, the market is a very different place now than it was in the industry's very recent heyday.

We have to move fast to secure its future in any form, and it looks as if once again Teesside could have a pivotal role to play in the future of British steelmaking.