The government has taken control of British Steel\u2019s Scunthorpe operations but faces a race against time to keep its blast furnaces running.<\/p>\n
Business secretary Jonathan Reynolds told parliament during an emergency recall<\/a> on Saturday (12 April) that the facility\u2019s Chinese owner Jingye wanted to \u201crefuse to purchase sufficient raw materials\u201d to keep them operational.<\/p>\n \u201cThe company would therefore have irrevocably and unilaterally closed down primary steelmaking at British Steel,\u201d he said.<\/p>\n Reynolds said Jingye was aiming to keep downstream mills \u2013 which turn steel into usable products for the construction industry \u2013 and supply them using Chinese-made steel, rather than the locally produced material.<\/p>\n MPs voted on Saturday to take control of the plant to keep production operational. It technically remains under the ownership of Jingye but Reynolds said the company would receive fair market value \u2013 effectively \u00a30 \u2013 if it is fully nationalised.<\/p>\n He added that the government\u2019s preferred option would be co-investment with a new private sector partner.<\/p>\n Trade bodies previously warned of major gaps in supply to the construction industry if the plant closed down<\/a>.<\/p>\n On Sunday (13 April), Reynolds declined to state that he was sure the plant would receive the raw material supplies it needs to keep the blast furnaces burning.<\/p>\n Speaking on the BBC\u2019s Sunday with Laura Kuenssberg<\/em>, he said: \u201cI\u2019m not going to get into the specifics of that. Giving us a chance to do that was essential. I\u2019m not going to make my situation or the nation\u2019s situation more difficult by sharing some specific commercial aspects of that.\u201d<\/p>\n This morning (14 April), British Steel\u2019s previous chief commercial officer Allan Bell was named as its interim chief executive, with marketing director Lisa Coulson becoming interim chief operating officer.<\/p>\n Bell said:\u00a0\u201cOur immediate priorities are securing the raw materials we need to continue blast furnace operations, ensuring we have the dedicated personnel to run those furnaces, and maintaining the highest levels of health and safety for our workforce.\u201d<\/p>\n Gareth Stace, director general of trade body UK Steel, echoed Bell, adding: \u201cIf the furnaces cool down, it is virtually impossible for them to be restarted.\u201d<\/p>\n Chinese steelmaker Jingye bought British Steel out of receivership in March 2020<\/a>, stating that it foresaw \u201ca new illustrious chapter in the history of British steelmaking\u201d.<\/p>\n Last month, it announced it was consulting on plans to close what are the UK\u2019s only remaining blast furnaces, which it said loses \u00a3700,000 per day<\/a>.<\/p>\n