Tata Steel new plant: $1.5-billion electric arc furnace facility to come up at Port Talbot; UK government gives 500 million pounds

Tata Steel will be beginning the construction of its state-of-the-art electric arc furnace (EAF) facility at Port Talbot, Wales, in July 2025, with production expected to commence by 2027. The company confirmed in its FY24-25 annual report that all key approvals for the $1.5 billion project are now in place.Backed by 500 million pounds in funding from the UK government, the project marks a major step in Tata Steel’s journey towards low-carbon steel production. Once operational, the EAF is projected to produce 3.2 million tonnes of low-emission steel annually and cut over 50 million tonnes of CO₂ emissions over the next decade.“We are now transitioning to decarbonised and state-of-the-art EAF-based steelmaking by FY2027-28, supported by 500 million pounds in the UK Government funding,” Tata Steel CEO & MD T V Narendran and executive director & CFO Koushik Chatterjee said in the company’s report.The decommissioning of two ageing blast furnaces at Port Talbot has already been completed, and the company has shifted to a downstream-focused model, using steel substrate sourced from its operations in India, the Netherlands, and other suppliers to serve its UK customers.“We have exited from steelmaking through the end-of-life heavy end assets in Port Talbot, and moved to a downstream model using imported substrate from India, the Netherlands and other external sources,,” a senior official explained.Tata Steel is also eyeing major cost rationalisation, aiming to reduce fixed costs from 762 million pounds in FY25 to 540 million pounds in the following year. This will be achieved through optimisation of input costs, streamlining of downstream operations, and IT modernisation.Chairman N Chandrasekaran said the company is firmly on track with its green transition. “ The decommissioning of two blast furnaces at Port Talbot, has cleared the way for the next-generation Electric Arc Furnace (EAF) project, supported by the UK government,” he said.The EAF facility will also make use of locally available scrap metal, further reinforcing the company’s move to a more sustainable and circular production model.