Closing down the Port Talbot blast furnaces is, without question, a tragedy.
Tata Steel’s decision to close the Abbey Works in South Wales will lead to 2,800 jobs going over the next 18 months but also thousands more will be lost in the supply chain.
It will be devastating too for so many families as the steelworks has been at the heart of the local community for more than 70 years.
It is easy too to understand the howls of rage from union leaders and local MPs about Tata’s decision to replace the blast furnaces with the so-called electric arc furnace.
And even easier to understand the outrage that Britain would be the only G20 country not to have such a vital strategic national asset as steel-making if Port Talbot closes.
Tragic blow: Tata Steel’s decision to close the Abbey steel works will lead to 2,800 jobs going over the next 18 months but also thousands more will be lost in the supply chain
Yet steel expert Professor Julian Allwood of Cambridge University says we are looking at the closure in the wrong way, that this is an opportunity rather than a catastrophe – the chance to finally modernise the industry and turn the UK into a world-leader in pioneering materials technology.
Even if you take the net zero targets out of the equation, Allwood claims that transforming Port Talbot from an old-fashioned blast furnace to a modern arc is the smartest – and only – option over the longer term. And the only way to keep steel-making alive.
Tell that to the workers who are about to lose their jobs and the union officials whose plan to keep the blast furnaces open for longer until the electric arc comes online in 2027 has been refused by Tata.
But Allwood argues that while Tata’s decision might cause devastation now, it will avoid an even greater tragedy in the longer term – the loss of our steel-making capacity altogether.
This is why. Every year about 10m tonnes of scrap metal, everything from old cars and tin cans to train tracks, is collected in the UK. That’s enough scrap to cover 350 acres of Hyde Park and pile it six feet high.
That scrap is sent overseas by ship to countries like Turkey for melting into low-grade steel products because it is cheaper than doing so here.
That amount of scrap is going to double in size to at least 20m tonnes over the next 15 years because our steel stock is coming to the end of its 40-year life cycle.
And scrap is on the rise because we are consuming more steel each year – at the latest count we consume about 15m tonnes of new steel in final goods – about half of it for construction, commercial buildings and bridges.
Yet we are making less of it ourselves. Most of the low-value steel we do make at Port Talbot or Scunthorpe is sent overseas to Europe where it is turned into high-value final goods.
In fact, only one sixth of our final consumption of steel goods is made in the UK. Output has already halved since 1990, and most of what we do make relies on importing iron ore and coke from Brazil and other countries, and is pretty low grade.
Which is why Allwood’s big claim is so persuasive. He says that all future demand for steel in Britain could be met if we were to ‘upcycle’ – that’s using the electric arc technology – all our home grown scrap metal. In other words, we could be self-sufficient in steel making.
The US is already way ahead, recycling up to 70 per cent of all its scrap metal. What’s more, there is already an over-supply of steel-making around the world so the last thing anyone needs is more blast furnaces.
At current growth rates, the amount of global scrap produced will quadruple over the next few decades if countries like India keep building.
Over the longer term, then, you can see that all the world’s biggest steel makers will be racing to recycle, and upcycle.
The technology is not quite there yet to get scrap recycled into the highest quality steel but the UK is ahead of the game in innovation. And the one with the most advanced materials technologies will be the winner.
If Allwood is right, that winner could be the UK.
It is a contrarian view but one worth chewing on. There is an industrial revolution taking place in steel-making which is as dramatic as the switch from analogue to digital, and one in which the UK could lead the way.
As the tragedy of Port Talbot has also shown, the messaging explaining why and how this is the start of a new industrial process has been utterly dismal. Tata’s bosses and our politicians need to do much better than this.
They could start by working with the unions on new skills and training centres and helping those losing their jobs.
