The British government is set to finalise a 500-million-pound ($679 million) rail steel deal between Network Rail and British Steel, aiming to protect thousands of jobs at a steelmaking plant in Eastern England that was brought under state control earlier this year.
The contract will see British Steel supply more than 337,000 metric tons of rail track over five years, the government said on Tuesday, two months after seizing operational control of the steelmaker from its Chinese owners, Jingye, to prevent the closure of its blast furnaces in Scunthorpe.
“This is great news for British Steel and a vote of confidence in the UK’s expertise in steelmaking, which will support thousands of skilled jobs for years to come,” business minister Jonathan Reynolds said.
The contract, which starts in July, will provide publicly owned Network Rail with 80% of its rail needs and will build on the government’s 2.5-billion-pound steel fund set up to boost steel production over the next five years, the statement said.
To ensure security of supply, Network Rail is set to award smaller contracts to some European manufacturers for around 80,000 to 90,000 metric tons of rail, which will supply specialist rail products alongside British Steel, the statement said.
The sector, which has been grappling with high costs and tough competition, last month called for clarity on when U.S. tariffs will be lifted under a landmark U.S.-UK deal agreed in May to remove President Donald Trump’s steel levies.
($1 = 0.7363 pounds)
(Reporting by Muvija M)
