Tata Steel gains on decision to close blast furnace, cut 2,800 jobs

Shares of Tata Steel Limited traded a percent higher at Rs 125.20 in early trade on January 20 after the company announced it would be shutting down the two blast furnaces in its Port Talbot Steelworks in Wales, potentially laying off 2,800 employees.

“This plan is intended to reverse more than a decade of losses and transition from the legacy blast furnaces to a more sustainable, green
steel business,” the company said in an exchange.

At 9:20 am, the counter was trading at Rs 134, up 0.5 percent from the previous close on the NSE. In the last year, the stock has gained just 9 percent, lower than the Nifty’s 20 percent over the same period.

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The company further added that Port Talbot’s two high-emission blast furnaces and coke ovens would close in a phased manner with the first blast furnace closing around mid-2024 and the remaining heavy end assets would wind down during the second half of 2024.

On job cuts, Tata Steel expects 2,500 roles to be impacted in the next 18 months. British media outlet The Guardian reported that about 200 jobs could be saved under a proposal to keep some of the site’s mills open, to roll steel slab.

“We recognise this proposed restructuring would have a major impact on the individuals and communities concerned, whom we will support with dignity and respect,” Chief Executive Officer T V Narendran said.

Tata Steel will endeavour to maximise voluntary redundancies and proposes to commit more than £130 million to a comprehensive support package for affected employees.

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