Port Talbot Steelworks in South Wales is the largest producer of virgin steel in the UK. Along with British Steel steelworks in Scunthorpe, Port Talbot steelworks is expected to shut down its blast furnaces in 2024 and build a 3 million tonne (MT) electric arc furnace (EAF) to recycle scrap steel. This is a measure to reduce the steelworks CO2 footprint by cutting out coal used in traditional blast furnaces in virgin steelmaking.

In ‘A workers’ plan for Port Talbot’, the UNITE workers’ union points out “The government's current proposal is to give a handout to Tata [Port Talbot Steelworks], without asking for any conditions to protect jobs.” On 15^th September 2023, this handout was confirmed at £500 million with expected job losses up to 3,000. The deal was reached without meaningful union or worker involvement, despite those workers facing the biggest upheaval at the steelworks.

We share the Unite union’s conviction that the low-carbon transition at Port Talbot Steelworks can, and must, be a just transition. In its workers’ plan, Unite point out that only 60% of UK steel demand is met by domestic production, and that the UK imports 10 out of 17 main steel products. By 2035 demand for green steel could rise as high as 19.4MT, according to Unite. In 2022, the UK produced 6MT of steel. These figures underpin Unite’s case for expanding EAFs at Port Talbot to 6MT-9MT, beyond the current conversion plans of a 3MT EAF.

Unite’s proposed expansion—together with scrap steel processing jobs to improve scrap input quality—would retain, or increase, jobs at the site of Port Talbot steelworks. Unite states that diverting the amount of scrap the UK exports each year would provide sufficient quantities of scrap steel to expand the EAF capacity for Britain’s green steel sector.

Beyond EAFs, Unite is pushing the UK Government to invest in, and develop, emerging technologies like Hydrogen Direct Reduced Iron (HDRI) to produce virgin steel. The large amounts of electricity needed to support that could, according to Unite, be produced sustainably by constructing a floating windfarm just off the coast of Port Talbot, which it claims has suitable topography. This could safeguard more jobs and contribute to reducing the carbon footprint of other carbon intensive industries, such as cement and ammonia production.

Unite estimates that HDRI roll-out would require a public investment of around £1 billion per year over the next 12 years. That may sound like a lot but, in total, that amounts to a billion less than the widely derided Test and Trace app cost in its first year alone.

CAN advocates for a variety of strategies to meet UK steel demand into the future, including efficiency, recycling, technology, and more selective production. But where there remains a demand gap, production should be coal-free and utilise a circular economy based on safer, desirable, and dignified jobs within the UK. We also believe it’s vital that the impacts of steel production are not just considered at the point where iron or scrap arrives at steelworks.

Upstream extractive industries and scrap steel sorting and processing underpin, and are impacted by, changes at steelworks. The environmental and economic consequences for these upstream sectors means mine workers and community members living on the frontlines of iron and coal extraction, and the consequences of climate change, also need to be part of the conversation, as stakeholders, for a truly just transition.

CAN agrees with the Unite union on the following demands:

1. Change procurement rules to let UK public contracts use 100% UK steel. This alone can create 8,000 jobs.
2. Public investment for a Steelworkers’ Transition Plan with NO loss of jobs. Phased workers' transition to green steel. The investment needed is £1 billion per year over 12 years and it will pay for itself with increased revenue.
3. Tackle energy prices. Bring in electricity price caps and public ownership of the grid to make our steel even more competitive.
4. Take a stake. No more money for nothing. Public investment for steel must come with solid job guarantees.

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We also heard on the grapevine that EMR Capital PTY, the ultimate owner of the proposed West Cumbria coal mine (WCM), was attending in the desperate hope of raising the £230 million still needed to start the WCM. So local campaigners from Cumbria came all the way to London to deliver a message to potential investors in WCM—steer clear! To further ruin EMR Capital PTY’s plans, they also handed investors a risk assessment, provided by BankTrack, outlining risks specific to the proposed WCM proposal. Two other coal mining companies were present at the conference too.

There’s many alternatives we must take instead of clawing the ground up to reach the minerals beneath, and that is where investment is needed. For example, we need:

1. better closed-loop recycling and reuse
2. new technologies and the efficiencies they can bring
3. the eradication of planned obsolescence
4. a reduction and prioritisation in what we consume

This would truly be ‘resourcing tomorrow’—the strapline for this year’s Money & Mining conference. Instead, the conference encourages investment in the rush for remaining minerals, fuelling human rights abuses, land grabs, destruction of local eco-systems, and climate change.

We call out the host of this disastrous conference, the Business Design Centre, which boasts its ethical ‘B-Corp’ status. You might want to raise your concerns with the certifying body about giving these hosts any kind of ethical certification (certification@bcorporation.uk), pointing out that at least three fossil fuel companies advertising coal mines and oil production were touting for investment at the conference (BHP, ADX Energy, and Teck).

The UK Government is providing £500 million, and Tata Steel is expected to provide another £725 million. Most of this money will go to converting the sprawling steelworks from its current Basic Oxygen Furnaces to Electric Arc Furnaces. The former produces virgin steel from iron ore, heavily relying on coal for the chemical reaction. Electric Arc Furnaces recycles scrap steel without needing coal. Currently, the UK exports a considerable quantity of scrap steel abroad (over 8 million tonnes in 2021), and scrap steel is expected to greatly increase in abundance globally.

Port Talbot steelworks is currently the 2^nd highest source of CO2 from any single site in the UK. Transitioning this steelworks is expected to make a significant impact on the UK’s emissions. Steelworks around the world contribute 11% to global greenhouse gas emissions… rapid decarbonisation globally is essential to limit climate chaos and, alongside electric arc furnaces, alternatives are under development and testing that removes coal from the process of making virgin steel.

However, steelworks employ many thousands of people around the world, whose labour has been essential for everything from vehicles and renewable energy infrastructure to household appliances. It’s essential steel workers and their unions are centred in the changes needed to decarbonise steelworks to ensure a just transition that doesn’t leave these workers behind. The planned decarbonisation of Port Talbot Steelworks has been reported not to follow the principles of a just transition. Instead, the company has reportedly shut unions out of its negotiations with the UK Government and there aren’t any reported programmes of retraining or support packages to equip workers facing redundancy with realistic prospects of finding alternative work that suits their experience or ambitions.

Steel companies in Europe may be amongst the first to decarbonise their steelworks, so it is essential they set a good example for steel companies elsewhere to follow. European steelworks, therefore, must meaningfully engage with their workers and workers’ Unions from the outset of plans to decarbonise steelworks, focusing on those most impacted by potential changes. We are sceptical of top-down consultations on changes which often have foregone conclusions—engagement must be in the form of equal partners around the table. For workers, this can have the advantage of securing packages of support that are appropriate for their needs, whether that is to stay within the company or gain employment in another industry. Worker creativity may also reduce their own job losses and impacts—if they are able to meaningfully shape the transition process. Companies benefit from the creative capacity of workers who have on-the-ground expertise, greater trust in the changes ahead, reputational impacts, better worker morale and loyalty, and the wider fallout that structural unemployment can drive.

There are now no legally operating opencast coal mines in the UK.

Glan Lash opencast coal mine, Carmarthenshire (South Wales), had an extension application rejected in September 2023.

In September 2022, Ffos-y-fran opencast coal mine in Merthyr Tydfil, was due to close after 15 years of operation. However, the mine has continued to operate with little action from the local council or Welsh Government. It is now expected to close at the end of November 2023, with no meaningful restoration of the land expected, as the company did not set aside the money to fulfil its contractual obligations in this regard. The guarantee bond of £15 million to be used in case this happens is far short of the estimated £120 million needed for restoration as per the original plan. The coal mining was originally approved by Welsh Government in 2005 as a way to restore a brownfield site at no cost to the public purse, an outcome that now appears remote.

Hartington opencast coal mine, Derbyshire closed at the end of Spring 2023.[2]

[1] compiled from Coal Authority, "Production and Manpower Statistics" for 2022

[2] Gov.uk "Coal mining production and manpower returns received by the Coal Authority April to June 2023." (July 2023)

[3] Ember, Coal Free Kingdom (13th November 2019) and Drax Group, Enabling a zero carbon, lower cost energy future page 39 (2019)

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