A new 250MW power plant in Scunthorpe is part of the deal which saw Jingye buy parts of British Steel and its assets on Monday.
As previously reported, the Official Receiver was originally appointed as liquidator for British Steel in May 2019, but it has now been saved.
The Jingye Group completed the acquisition of the company’s UK and Netherlands assets after reportedly offering £50 million to buy the company.
The completion secures the future of around 3,200 jobs and follows the agreement of new terms with customers and suppliers.
However, it was not all good news as around 400 employees did not receive offers of employment. They are being supported by the Job Centre Plus and the National Career Service to find new employment.
The sale to Jingye includes the steelworks at Scunthorpe, UK mills in Teeside Beam Mill and Skinningrove, shares of FN Steel BV, and the TSP Engineering business based in Cumbria.
Here’s the breakdown of the deal:
- Jingye pledged to invest £1.2 billion to place the business on a more competitive and sustainable footing
- Jingye plans to return the company to industry comparable margins within five years
- The development of an Electric Arc Furnace in Teeside
- The construction of a new 250MW power plant to serve the Scunthorpe site. The new plant is expected to be around a third more efficient than what it replaces
- Investment in the rolling mills to produce high-quality steel products
- Build a new rebar line
- Enhance the current rail mill
Business Secretary, Alok Sharma, said: “I also want to reassure British Steel employees who may be facing redundancy that we are mobilising all available resources to give immediate on the ground support and advice to those affected.”
Discussions are also continuing to resolve the regulatory approvals required to sell British Steel Limited’s French subsidiary to Jingye, which is based in Hayange. It is hoped this will be concluded separately.
Glad to be at Scunthorpe, the well-known "Industrial Garden Town", to mark the acquisition of British Steel by Jingye Group. This is a "golden fruit" of the China-UK "Golden Era". I would like to extend my warmest congratulations to Jingye Group and British Steel! pic.twitter.com/0tAZNa0irj
— Liu Xiaoming (@AmbLiuXiaoMing) March 9, 2020
Li Huiming, Jingye Group CEO, said: “It has not been an easy journey since we first announced our intentions in November but the longer I have spent in Scunthorpe, the more I have come to believe in the successful future of these steelworks and the employees that have made them famous throughout the world.
“Together, we can forge a new partnership that will mark the beginning of a new illustrious chapter in the history of British steelmaking.”
British Steel CEO, Ron Deelen, said: “This is a momentous day for our business, and I’d like to thank everyone for their dedication during a challenging year.
“I’m confident we’ll seize the incredible opportunity Jingye have given us to build on 150 years of heritage, and further cement British Steel’s reputation as a manufacturer of world class steel.”