Key facts
- The UK government has nationalised British Steel, previously owned by China's Jingye Group.
- China's Ministry of Commerce stated it "firmly opposes" the nationalisation and warned it damages investor confidence.
- The UK government cited job protection and safeguarding national steelmaking capacity as reasons for the takeover.
- An independent evaluation will determine if Jingye receives compensation.
- China stated it would take resolute measures to safeguard the interests of Chinese enterprises.
The UK government has nationalised British Steel, taking the company into public ownership after talks with its Chinese owner, Jingye Group, broke down. China's Ministry of Commerce has strongly opposed the move, warning it damages investor confidence and stating it will take "resolute measures" to protect Chinese enterprises.
The government cited the need to protect jobs and safeguard the UK's capability to produce virgin steel, which is crucial for major infrastructure projects and considered vital for economic security. The Scunthorpe plant, which employs 2,700 people, is the last in the UK capable of producing virgin steel.
Jingye Group had previously stated the Scunthorpe plant was losing approximately £700,000 per day and had begun consultations on its closure, citing challenging market conditions, tariffs, and the costs associated with transitioning to lower-carbon production methods. The UK steel industry has faced decades of decline, exacerbated by global overproduction and higher electricity costs compared to international competitors.
Nationalisation provides the government with time to decide the future of the plant while keeping the blast furnaces operational. An independent assessor will determine whether Jingye Group is entitled to compensation for the nationalisation. The Scunthorpe plant's blast furnaces, Bess and Anne, are old and require significant investment to maintain, with dwindling supplies of essential materials.
Other UK steel producers include Tata Steel at Port Talbot, which has shifted to greener steelmaking with government support, and Liberty Steel, Celsa, Marcegaglia, and Outokumpu. In 2023, the UK produced 5.6 million tonnes of crude steel, a small fraction of China's over 1,000 million tonnes.