The UK government has formally taken British Steel into public ownership, following earlier intervention in April 2025 to prevent the closure of its Scunthorpe steelworks. This move was prompted by Chinese owners Jingye's plan to shut down the plant's blast furnaces, and aims to safeguard approximately 2,700 direct jobs, thousands more in the supply chain, and the UK's capacity to produce "virgin" steel directly from iron ore. The nationalization comes after the Steel Industry (Nationalisation) Act received Royal Assent, confirming that government ownership was deemed necessary to protect the national interest, critical infrastructure, and national security.
The government's decision to nationalize the company was made despite the Scunthorpe plant costing taxpayers an estimated $1.3 million per day, according to the National Audit Office, while Jingye had previously claimed losses of $700,000 daily. The Business Secretary, Peter Kyle, stated the government would cover running costs "for the immediate future" and emphasized the importance of maintaining domestic steel production to avoid reliance on global suppliers. The two operational blast furnaces are nearing the end of their lives, and restarting them if cooled would have been financially prohibitive. The government intervened in April 2025 to keep them running and prevent a "disorderly closure."
Jingye, which acquired British Steel in March 2020 for about $50 million, is seeking compensation, with reports suggesting they were looking for up to $1 billion after rejecting a $100 million offer in February. They had previously committed $1.2 billion to upgrade the plant for net-zero technology. The nationalization allows the government to stabilize operations, manage health and safety, maintain production, and explore long-term solutions, including private sector investment and a decarbonization plan expected to cost over $1 billion for installing electric arc furnaces. This action aligns with a broader UK Steel Strategy, backed by up to $2.5 billion in investment, aiming for 50% of UK-used steel to be domestically produced.
