British Steel talks still deadlocked, source says

The talks to keep production going at the UK’s last virgin steel plant in Scunthrope are yet to reach a resolution, the BBC has been told.

British Steel has been warning the raw materials used to produce steel in two blast furnaces at the plant may soon run out.

On Wednesday, sources said the government had offered to buy the coking coal that is essential to keep the blast furnaces going.

A meeting between government officials and Jingye, the Chinese owner of the plant, was held virtually on Thursday.

But one source close to the negotiations told the BBC the issues under discussion remained unresolved.

The source said negotiations were ongoing and may roll into Friday.

Trade unions who represent workers at the plant said they had not been updated on the negotiations.

Government sources had told the BBC production could cease at the plant within weeks if the raw materials were not paid for soon.

The Department of Business and Trade did not comment.

Coking coal is a source of fuel in the blast furnace process used to make virgin steel, which is made from iron ore rather than recycled steel.

Jingye has said the furnaces are “no longer financially sustainable”.

The government has not ruled out nationalising British Steel, which employs 2,700 people, saying all options remain on the table.

On Thursday, Prime Minister Sir Keir Starmer said “all options are on the table”.

He said demand for steel was “likely to go up, not down, which is why it’s very important to do everything we can”.

Andy Prendergast, national officer of the GMB union, said he was ”exceptionally concerned” that the government’s offer to pay for the coking coal had not been ”snapped up” by Jingye.

He told the BBC ”we believe the government have made an offer that buys everyone time”.

He added: “We are currently running against the clock in terms of the blast furnaces. If they go off, they are gone.

“This offer means they stay in action and that means we can have a wider discussion about the future of the steel works.”

The UK would be the only major G7 economy without the ability to make virgin steel if the Scunthorpe factory shut down.

Recycled steel, which is made from scrap, is more energy efficient and has a far lower carbon footprint.

But some industry analysts argue there is not enough recycled steel to meet global demand.

Reform UK is calling for British Steel to be nationalised until a buyer can be found.

The Green Party also favours nationalisation and a switch to “green” steel production.

The Conservatives and Liberal Democrats have said other options should be considered first.