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British Steel warns that the closure of blast furnaces could lead to 2,700 job losses

British Steel warns that the closure of blast furnaces could lead to 2,700 job losses

British Steel, a Chinese-owned company, said that it may close two of its blast furnaces by June. This could result in the loss of as many as 2,700 jobs.

British Steel, owned and operated by China's Jingye Group in Scunthorpe (north east England), has been warning for years about the loss-making nature of steel production. On Thursday, it announced that it will consult on the closures of its blast furnaces, among other operations.

British Steel released a statement Thursday stating that "the blast furnaces and the steelmaking operations no longer are financially viable due to extremely challenging market conditions, tariffs and higher environmental costs related to the production high-carbon steel."

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British Steel's Scunthorpe operation, which has been losing 700,000 pound per day, is another victim of the 25% tariff on steel imports that will be implemented on March 12.

According to UK Steel, Britain's exports of steel to the United States amount to over 400 million pounds per year or about 5%.

British Steel, which manufactures steel since 1890 said that it would begin consultations with unions. The proposed closures may affect between 2,000 to 2,700 jobs, subject to consultations, with June as the earliest date possible for closure.

The government and the company have been talking for months about a funding package that would help them replace their blast furnaces with an electric arc furnace, a more environmentally friendly type of steel production. However, the two sides are still unable to reach an agreement.

"We made a proposal to British Steel Monday, and they rejected it. "We are still in discussions with them," Sarah Jones, a Minister in the Department for Business and Trade, said on Wednesday.

British Steel announced that it will continue to work with the government in exploring options for the company.

(source: Reuters)