The government is finalizing a £500 million support package to help secure the future of steel production at Port Talbot, using Welsh-made steel to build floating offshore wind turbines. The deal with Tata Steel, the owner of the industrial site, aims to prevent the closure of blast furnaces and instead invest in a new £1.2 billion electric arc furnace.

Under the agreement, the government will provide funding for the furnace, with additional support for laid-off workers and potential expansions of Port Talbot’s operations. One such expansion could involve building facilities to produce steel plates for wind turbines, as massive offshore wind farms are planned in the Celtic Sea.

While the closure of blast furnaces may lead to the loss of nearly 3,000 jobs, the new investment is expected to create hundreds of direct jobs. The Labour Government is considering using taxpayer money from a £2.5 billion green steel fund to support the investment in Port Talbot.

Negotiations with Tata Steel are ongoing, with talks also taking place with Jingye, the Chinese owner of British Steel in Scunthorpe. Business Secretary Jonathan Reynolds and Welsh Secretary Jo Stevens have pledged to secure a better deal for Port Talbot workers, with plans to make a formal announcement in the House of Commons.

The new agreement includes commitments to help former workers retrain or find new employment, as well as potential future investments in the steel industry. Tata’s commitments are likely to be conditional on a favorable business case, with the government emphasizing the importance of securing jobs and economic growth in the steel sector.

The Welsh Conservatives have praised the government for strengthening investment assurances with Tata, while the company itself has not commented on the details of the agreement. Overall, the government is working to safeguard the future of steelmaking communities and ensure a smooth transition to green steel production.