Tata Steel signs contract with Tenova for electric arc furnace at Port Talbot plant

India's Tata Steel signed a contract with Italy-based Tenova on Friday for an electric arc furnace at its Port Talbot plant in Wales, weeks after Britain's biggest steelworks ended blast furnace-based production.

The closure of the last blast furnace at Port Talbot, once the largest steel works in Europe, was the culmination of decades of decline in Britain's steel industry, which has struggled to compete with low-cost imports.

The plan was for the Tata Steel-owned site to be subject to a three to four-year-long decarbonisation plan to build an electric arc furnace which will make steel from scrap, a 1.25 billion pound ($1.68 billion) project backed by 500 million pounds of British government funding.

Backed by the funding, and when it is commissioned from the end of 2027, the electric arc furnace will reduce the site's steelmaking carbon emissions by 90%, equivalent to 5 million tonnes of carbon dioxide a year, Tata Steel said on Friday.

Tata Steel said it has completed public consultation on the planning application and is working with authorities to submit the application in November 2024, with plans to start site work around July 2025.