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Written Statement - Tata Steel Update

Ken Skates, Cabinet Secretary for Economy and Infrastructure

I have committed to keep members updated on activities relating to Tata Steel UK and its business in Wales.

Today Tata Steel Ltd has announced that Tata Steel Limited and Thyssenkrupp AG have signed a Memorandum of Understanding to create a leading European steel enterprise by combining the flat steel businesses of the 2 companies in Europe and the steel mill services of the Thyssenkrupp group. The proposed 50:50 joint venture – thyssenkrupp Tata Steel – would be focused on quality and technology leadership, and the supply of premium and differentiated products to customers, with annual shipments of about 21 million tonnes of flat steel products.

We cautiously welcome the announcement, recognising the opportunities for the UK operations from the creation of Europe’s second largest steel company, and the commitment to continue the present network configuration of the 3 hubs including Port Talbot.

Both I and the First Minister have spoken with Tata Steel UK CEO Bimlendra Jha about the announcement of the joint venture. Welsh Government remains fully committed to all that we can to secure a sustainable future for the steel industry. In our discussions the importance of close working with the Welsh Government was again recognised as being a key factor in our shared commitment toward securing this aim.

Clearly we will now need to gain a more detailed understanding of the process ahead and the implications for Welsh operations and we will be seeking further detail from Tata Steel and Thyssenkrupp. At the same time we will reiterate our expectation regarding continued investment in Welsh operations and the safeguarding of jobs.

To date we have offered funding of £13m across Tata Steel’s Welsh operations which includes support towards skills development, investment in Tata’s Port Talbot power plant to increase energy efficiency and reduce carbon emissions, and R&D funding for new product development. We will continue to work closely with Tata Steel regarding the wider potential package of support. With the exception of skills funding offered to date, all of our support will be subject to agreeing the detail of legally binding conditions, which will include commitments regarding jobs.

In recognising the significance of this announcement today, it remains clear that wider factors continue to impact the strategic sustainability of the UK steel sector. We again call upon the UK government to take concrete action on matters including the cost of energy.

I will continue to keep members updated as matters progress.