The United Kingdom government has nationalized British Steel, taking full control of the company to safeguard the nation's steelmaking capacity. The decision follows concerns that the company's Chinese owners, the Jingye Group, were considering closing the plant's blast furnaces.
The Department for Business and Trade announced the nationalization on Thursday, stating it would preserve thousands of jobs and maintain a domestic supply of steel essential for major construction projects and the defense industry. Business Secretary Peter Kyle indicated that the government's focus is on stabilizing the business, supporting its communities, and fostering a sustainable, competitive, and decarbonized steel sector.
An independent evaluation will be conducted to determine whether compensation will be paid to Jingye Group, which acquired British Steel in 2020. Jingye Group has stated it invested over 1.2 billion pounds ($1.6 billion) to keep the Scunthorpe plant operational amidst production instability.
The U.K. government assumed operational control of British Steel last year when Jingye Group expressed intentions to cease operations at the blast furnaces. These furnaces are the last in the U.K. capable of producing virgin steel from raw materials. The Scunthorpe site has a history of steel production spanning over 130 years, with the plant currently employing approximately 2,700 individuals.