Net Zero future: Chinese offer to take over UK steel industry
As Britain faces a deepening steel crisis, with 5000 jobs at risk, it is becoming evident that the steel industry and other energy-intensive industries have no future as the Net Zero agenda continues to drive electricity prices upwards.
While the immediate cause of the present crisis is the collapse of financial partner of the Gupta empire, GFG Alliance, which bought Liberty, the underlying and fundamental cause is the uncompetitiveness of all heavy industry in the UK, and for this government is itself largely to blame.
The British Government has ignored the GWPF’s warnings and accelerated its Net Zero agenda, making the generation of electricity ever more expensive. It is now faced with intense pressure to bail out the troubled Liberty Steel, the country’s third largest steel maker, which runs twelve steel plants in the UK, and is responsible for about ten per cent of British steel production.
The steel industry body UK Steel is indicating that electricity prices in the UK are between 60 and 80 per cent higher than those in France and Germany, with climate policies accounting for the bulk of this difference. Worse still, industrial electricity prices in Europe themselves are nearly 50% higher than in the G20 — never mind China and India where industrial electricity prices are estimated to be just a third of UK prices.
The Chinese owner of British Steel is interested in buying Sanjeev Gupta’s UK steel plants, setting up a potential geopolitical dilemma for Boris Johnson’s government.
Gupta has been struggling to secure new financing his for metals empire since its main lender, Greensill Capital, collapsed in March.
Jingye Group, which acquired British Steel in late 2019, has told government officials it is willing to step in to take on parts of Gupta’s Liberty Steel, the UK’s third-largest producer, if the industrialist fails to find fresh funding, according to several people familiar with the matter.
Liberty Steel employs about 3,000 people across the country, including 1,600 at three sites in Yorkshire which produce high-grade speciality steel for aerospace and defence customers.
Jingye “wants to set up an empire in the UK and there have already been discussions with government”, said one person familiar with the Chinese company’s thinking, while stressing that talks remain at an exploratory stage.
One official confirmed that the government was talking to Jingye.