A red dragon is the symbol of Wales and, with a bit of imagination and seen from the road in the twilight, it would look like it lived in Port Talbot, and from its mouth could come fire at night of Tata Steel’s blast furnaces. But it will soon cease to be so, as the Indian giant has announced the closure of these facilities, with the loss of 2,800 jobs.
For Port Talbot it is a great tragedy, similar to those suffered by Bridgend, Merthyr Tydfil, Llanelli and other localities in the South Wales valleys when Margaret Thatcher decided to crack down on coal mining. What followed were four decades of deindustrialization and decline that are still not over, and that have turned the region into one of the poorest in Europe (until Brexit, it was one of the most funded by the EU ).
Of Port Talbot’s 32,000 people (and 140,000 in the metropolitan area), a third work in the blast furnaces of Tata Steel, which it bought from Corus (formerly British Steel) in 2007. There are whole generations who have earned the life making steel, and even today it is rare to find someone who does not have a cousin, nephew or friend in the factory. The impact on the community will be terrible, not only for those who will be unemployed, but for cafes, restaurants, shops… If today 16% of children already live in almost third-world poverty, it will soon be worse .
The pretext that Tata Steel has clung to is the need to adapt to the new environmental precepts and the obligations imposed by both London and the Cardiff regional government, controlled by Labour, in order to decarbonise the country for the year 2050 (the plant emits 2% of all CO2). But unions and workers complain that the multinational had promised a transition, and has acted ruthlessly.
The economic background is inescapable, as Tata Steel has lost 150 million euros for operations in Port Talbot in the last quarter, almost two million euros a day. In fact, it has always been in the red, and numerous experts questioned the sense of acquiring what were then the Corus blast furnaces. Its executives explain that unfeasible improvements were necessary in the current framework (although the parent company has distributed 1,650 million euros in dividends since 2019).
Tata’s option is to close the blast furnaces and replace them – with a subsidy of 600 million euros – by an electric arc furnace, which does not need to burn coal and is therefore more hygienic, but which does not it will produce the premium quality virgin steel required by the automotive industry, and customers such as BMW and Nissan. For them – say the unions – it will have to be imported from China, India or Japan, transported in ships powered by diesel engines, and in the end, it will pollute more.
The British steel industry has actually been dying a slow death under the weight of competition for a long time now. It produces less than France and Germany and, apart from the blast furnaces in Port Talbot, it only has two more in Scunthorpe (north of England). Stephen Kinnock, the Labor MP who represents the locality in the Commons, says that “it is a disaster not only in the economic field, but in terms of national security, as it increases the energy dependence of the country just when the war in Ukraine seems to recommend the opposite”.
Port Talbot will become a ghost town. The steel will be greener, but the red dragon of Wales will be badly hurt.