British Steel said it would consult with workers and trade unions on the closure of two blast furnaces, steel mills and capacity reductions at the Scunthorpe steel mill.
The company notes that difficult market conditions and significant current financial losses have made it impossible to continue operating blast furnaces and steel mills in general.
The company adds that it will work with ministers to find options to support the transition to steel production in electric arc furnaces. However, this news came a day after British Steel rejected the government's financing offer, which is believed to have amounted to 500 million pounds (644 million US dollars).
The steelmaker says that after many months of negotiations, no agreement has been reached with the government. As a result, the "difficult decision" was made to begin formal consultations with employees and trade unions on March 27.
It also says that since 2020, the owner of British Steel Jingye has invested more than 1.2 billion pounds to maintain operations amid ongoing production instability and significant financial losses of about 700,000 pounds per day. Despite this, blast furnaces and steel operations are no longer financially sustainable due to extremely difficult market conditions, the imposition of tariffs, and higher environmental costs associated with high-emission steel production.
The consultation will propose three options, including closing the blast furnaces, steel operations and rolling mill at Scunthorpe by early June 2025, or closing the blast furnaces and steel operations in September. The third proposal is to close blast furnaces and steel operations in the future after September.
The CEO of British Steel, Zengwei Ahn, says: "We understand that this is an extremely difficult day for our employees, their families and everyone associated with British Steel. But we believe that this is a necessary decision, given the extremely difficult circumstances facing the business."
In its latest financial report, the firm announced an eightfold increase in pre-tax losses, noting its aging and expensive assets. The company has been experiencing operational problems with BF for some time, with losses increasing every year.
Business and Trade Minister Jonathan Reynolds said: "I know this will be a very worrying time for staff, and although this is British Steel's decision, we will continue to work tirelessly to reach an agreement with the company's owners to secure its future and protect taxpayers' money."
He adds that the British steel company
