British Steel sources materials from US to keep furnaces running – Washington Examiner
British Steel sources materials from US to keep furnaces running
British Steel is turning to the United States to save U.K. steel production after the government passed an emergency law to seize control of the company. Officials accused its Chinese-owned parent, Jingye, of planning to shut down the furnaces.
The British government took control of the company to protect the United Kingdom’s ability to produce virgin steel. London has since scrambled to acquire materials to reinvigorate the company, turning to the U.S. for salvation.
The U.K. purchased U.S. coking coal and iron ore, two critical components in steel production, which arrived at Immingham docks on Tuesday, the BBC reported. Business and Trade Secretary Jonathan Reynolds met the shipment at the port to see it transported to British Steel’s Scunthorpe factory.
Industry minister Sarah Jones said British Steel would use materials from the U.S., Australia, and Sweden to rescue the company.
“We have other shipments coming from the U.S., from Australia, and orders from Sweden, so we are in a steady state in terms of the operation of those two blast furnaces,” she said in an interview with the BBC.
The shipments from the U.S. will give British Steel a lifeline in the coming weeks as it seeks a new, reliable supplier. Jones said the country has enough funds to maintain steel shipments.
“We have a £2.5 billion fund for steel within the Department for Business, so we won’t be drawing down on any extra resources, and people can be reassured of that,” she said.
The government is now looking for another private owner of the company. Jones didn’t rule out another Chinese owner, but other officials are wary of national security implications.
“I think we’ve got to recognize that steel is … a sensitive sector around the world, and a lot of the issues in the global economy with steel come from over-production and dumping of steel products, and that does come from China,” Reynolds said in an interview with the Telegraph.
“So I think you would look at a Chinese firm in a different way, but I’m really keen to stress the action we’ve taken here was to step in because it was one specific company that I felt wasn’t acting in the U.K.’s national interest, and we had to take the action we did,” he added.
If the two blast furnaces in Scunthorpe were turned off, the U.K. would unlikely restart virgin steel production due to its prohibitively high cost.
The drama over British Steel has spurred a conversation in the U.K. government about Chinese ownership of critical national infrastructure, similar to some conversations in the U.S.
Dame Emily Thornberry, Labor chairwoman of the House of Commons foreign affairs committee, told the Financial Times that U.K. intelligence agencies should analyze Chinese investment in the country’s nuclear, telecoms, and transport sectors, adding investment should be viewed through the lens of “security first.”
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Rumors that British Steel’s Chinese owners planned to halt virgin steel production by shutting down its last two blast furnaces marked another blow to the U.K.’s industrial pride, reflecting its fall from global superpower status in the early 20th century. In the 19th century, the U.K. was the world’s leading steel producer.
British national pride took another hit last year when London announced a deal to give up control of the Chagos Islands. If the deal is completed, the old moniker that the “sun never sets” on the British Empire would no longer be true.
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