The United Kingdom government has officially nationalized British Steel, bringing the Scunthorpe steelworks into full public ownership. The action followed the passage of legislation earlier this week that allows for the nationalization of steel industry assets when a public interest test is met. The plant, which employs approximately 2,700 workers, was previously owned by the Chinese firm Jingye Group, though the UK government had been overseeing operations since last year.
Business Secretary Peter Kyle stated the move was necessary to preserve primary steel production capabilities and prevent dependency on global supplies. According to a National Audit Office report released in March, the facility has been costing the government approximately £1.3 million per day to operate. The government plans to continue operating the plant's blast furnaces, which are the last remaining source of primary "virgin" steel in the UK.
Jingye Group has previously reported losses of £700,000 a day and is reportedly seeking compensation for the nationalization. Secretary Kyle noted that an independent assessor will determine if compensation is due based on the company's valuation. While labor unions such as Unite welcomed the move as a step toward green steel production, some industry analysts indicated that significant long-term investment will be required to modernize the aging infrastructure.