Corus will invest £185m into rebuilding a blast furnace at Port Talbot, strengthening steelmaking in Wales and reassuring Welsh scrap steel traders.
The rebuild, which will improve the facility’s safety, environmental performance and reliability, will begin in July 2012. By increasing the capacity of the two blast furnaces by 400,000 tonnes each year, the project will balance iron and steel making capabilities at Port Talbot.
However, according to a Corus spokesperson this will not itself mean the plant will increase the amount of scrap steel it buys. He added: “It’s the iron-making side of the process that is receiving the investment rather than the steelmaking side, where the scrap is fed in. But the news ought to reassure Welsh scrap suppliers about the future of steelmaking in South Wales because the rebuild is intended to give the Port Talbot plant a foundation for the next 20-odd years.”
The spokesperson explained to MRW that the reason why Corus has invested in rebuilding a blast furnace in Wales rather than taking slab from the recently mothballed blast furnace in Teesside is that it would not be economic to do so. The Port Talbot plant is integrated, having its own downstream rolling mills. The Teesside plant’s slab output is surplus to UK requirements and has been sold for export since 2004.
Corus managing director and Tata Steel Europe chief executive Kirby Adams said: “This investment is a major step in achieving Tata Steel’s ambition to position Port Talbot as a producer of high-quality strip products on a global scale and an internationally competitive cost base. Our capital expenditure decisions aim to invest in those who invest in themselves.
“As a result of this project the Port Talbot works and our downstream supply chain will be able in the coming decades to continue improving the quality of products and services provided to their UK and overseas strip product customers.”