- 12 Sep 2024
- ICICIdirect Research
TATA STEEL SIGNS £500 MILLION GRANT FUNDING AGREEMENT WITH UK GOVERNMENT
News: Tata Steel has informed the exchanges that it has signed a £500 million Grant Funding Agreement with the UK Government. This agreement supports £1.25 billion project to install an Electric Arc Furnace at the Port Talbot steelworks in Wales, UK.
Views: This is a significant step forward for Tata Steel as it will facilitate the transition from blast furnace operations to electric arc furnace with a production capacity of ~3 MTPA. Along with the existing £500 million funding, the company will spend £750 million on setting up this facility and is slated to commissioned by the end of 2027. It will rely entirely on the available local scrap in the UK, helping reducing the UK’s entire industrial carbon emission by 8% and Port Talbot’s by 90%. The scheme was already announced before however was not signed due to regime change in UK. This is a positive development for the company.
Impact: Positive