An electric arc furnace in northern England, acquired from Tata Steel by Sanjeev Gupta’s Liberty House Group, was reignited on Friday, in what the company describes as a “major milestone” in the revival of Britain’s steel industry.
The N-Furnace, the larger of two electric arc furnaces, at Liberty Speciality Steels near Rotherham in South Yorkshire was formally reignited by the Prince of Wales, Prince Charles, highlighting the symbolic significance accorded to the restart, both to the industry and the region. The eight lakh tonne-a-year electric arc furnace, which turns scrap metal into specialised steel for auto and aviation sectors, was mothballed in 2015 as the British steel sector found itself in the midst of crisis amid overcapacity and sluggish demand, exacerbated by the dumping of steel into the European Union (EU) from China and other countries, and a high cost base.
Last year, Tata Steel agreed to sell its U.K. speciality steel business to Liberty House for £100 million, as part of efforts by the steel titan to turn around its European steel business, having sold its long products division to Greybull Capital in 2016.
Liberty House had then said that the acquisition was a major step forward in its U.K. strategy, focussed on recycling U.K. scrap metal using renewable energy.
The company had made a string of acquisitions in the U.K. in the past couple of years, including Tata Steel’s Scottish assets. In January, the company struck an agreement to acquire Europe’s largest aluminium smelter in Dunkerque, France, kick-starting an expansion into the European mainland.
Tripling capacity
Liberty House invested £20 million in the speciality steels business, creating 300 new jobs at Rotherham and a sister plant in Stocksbridge, taking the speciality steel workforce to 2,000.
The company said its upgrading of the facility would triple the capacity to melt scrap into liquid steel at Rotherham, making the company the largest steel recycler in the U.K.
“Switching this furnace back on today, after it had lain idle for more than two years, is a pivotal moment in the revival of U.K. steel making,” said Mr. Gupta.
‘Very good news’
“The occasion makes a very powerful statement that steel does have a future in Britain and that is very good news for the whole of our manufacturing and engineering sector.”
At a conference last week, industry leaders, politicians and unions came together to discuss the future of the industry in the northern city of Redcar, with the consensus that while the industry had moved out of the crisis that had engulfed it and threatened its future, there was little room for complacency. Participants urged the need for government action, including in the form of a so-called “sector deal” which would involve pledges of investment by industry, alongside action from government. Among the demands made of government are a reduction of energy costs for the industry (these are estimated to be double those of major European competitors) and a strong trade defence regime in place to ensure anti-dumping measures brought in by the EU can be maintained.
