Last week, Business Secretary Jonathan Reynolds met with Li Huiming, CEO of Jingye Group, which has owned British Steel for the past four years. Jingye is now considering shutting down the company’s UK operations, including the last two blast furnaces in the country, a move that would put thousands of jobs at risk.

The UK government has earmarked £2.5 billion for the transition of steel producers to greener methods of manufacturing, particularly focusing on the development of electric arc furnaces (EAFs) that produce steel using scrap metal and clean energy. Sources suggest that up to £2 billion of this fund could be directed towards British Steel, though the exact figure will depend on the terms of any deal.

In 2023, British Steel announced plans to close its two blast furnaces at Scunthorpe, while investing £1.25 billion in constructing two EAFs in Scunthorpe and Teesside. At the time, ministers offered a £300 million support package, but British Steel insisted on the same £500 million support that was given to Tata Steel. The company initially committed to keeping its loss-making operations open while the EAFs were being built, but by September, Jingye revised its plans and proposed advancing the closure of the blast furnaces—potentially before Christmas.

In response, UK ministers have been negotiating with Jingye in a bid to secure a more favorable deal, potentially including subsidies to keep the blast furnaces running until the electric arc furnaces are ready for use. One government figure described the £2 billion figure as a “theoretical upper limit,” though it remains a key option under consideration.

Despite the significant financial offer, talks have stalled, leaving some stakeholders puzzled as to why the deal has not yet been finalized. One individual involved in the discussions suggested that “geopolitical issues” might be complicating the process, pointing out that Reynolds had made an offer that was “fair and reasonable.”

Another topic under discussion is ensuring that British Steel can continue to meet the needs of critical customers, including the UK’s rail network. Whitehall officials have also floated the idea of establishing a national plant for producing “direct reduced iron” (DRI) using green hydrogen in the future, a project that would require collaboration among multiple steel companies.

Electric arc furnaces, which rely on scrap steel and renewable energy, are seen as a cleaner alternative to blast furnaces that still use coal. However, they employ fewer workers, and the shift to greener production methods could lead to job losses in the industry. British Steel reported significant financial losses, with pre-tax losses rising eightfold in 2022 to £408 million, continuing into 2023 and 2024.

The Labour Party has promised a £7.3 billion “national wealth fund” in its manifesto, designed to support energy-intensive industries like steel in their transition to net-zero emissions. Of this, £2.5 billion is specifically earmarked for the steel sector, in addition to the £500 million already allocated to Tata Steel for its plant in Port Talbot, South Wales.

There is growing concern that the relatively smaller support package for Tata Steel may leave workers in Wales feeling underfunded compared to those in Scunthorpe. Any deal with British Steel is also likely to involve some level of job losses, further complicating the situation.

Reynolds has expressed frustration with the previous Conservative government, which failed to support British Steel’s efforts to establish a carbon capture and storage project at Scunthorpe—an initiative he believes could have ensured the plant’s long-term viability.

A government spokesperson reaffirmed the UK’s commitment to maintaining a steel industry, stating that ministers are working closely with trade unions and businesses, including British Steel, to secure a “green steel transition” that both supports the workforce and ensures the industry’s future in Britain.

For its part, British Steel confirmed that it is still in “active discussions” with the government, adding that it has recently secured the raw materials necessary to continue operations into the new year.

The crude lead produced will have a lead content of 85-95%, while the copper cake will contain 60-70% copper and the zinc product up to 50-60% zinc. The facility will operate its main production processes 25 days a month, with auxiliary services running five days per week. 300 employees will staff the plant.

Located within the Zhuldyz industrial zone in Enbekshinsky district, the site is 1.3 km from Shymkent’s oil refinery. The main production building will measure 146 meters in length, 73 meters in width, and up to 14 meters in height. It will house a shaft furnace, raw material storage, a boiler room, settling tank, and finished product warehouse. Primary raw materials include cakes, dust, and sludge rich in lead, copper, and zinc. Materials will be delivered by open railcarsand stored in warehouses with a 1,000-ton capacity.

Construction is expected to start in Q1 2025, with operations launching by Q3 2025. Estimated annual emissions during operations include 21.4 tons of carbon monoxide, 1.27 tons of nitrogen oxide, 2.9 tons of polymetallic dust, and 0.12 tons of iron, among other emissions.

Vostok Trade is registered at the Astana International Financial Center and is involved in metal recycling and other legal activities. The company’s co-owners include Daulet Imankulov, Kuat Amanzholov, Imam-Zada Maulenov, Daniyar Bektibaev, Serik Turdaliev, Tahirzhan Baratov, and Kalykul Makhambetov.

RERI claims that both Rio Tinto and Serbia’s Ministry of Environmental Protection are contradicting their own commitments to maintain high European environmental standards. By splitting the project into parts, a practice known as “salami slicing,” Rio Tinto may be attempting to secure faster permits while avoiding comprehensive environmental scrutiny.

The current request leaves out significant details, such as the environmental impact of ore processing, waste generation, and water usage from the Drina River. RERI also highlighted the lack of information on how harmful by-products like lithium carbonate sludge would be managed. Mirko Popović, Programme Director at RERI, emphasized that by breaking up the project, Rio Tinto could reduce costs and bypass stricter environmental protection measures.

The Environmental Protection Institute of Serbia had previously mandated that all phases of the Jadar project must be assessed together, yet this requirement appears to have been overlooked. This fragmented approach could allow Rio Tinto to proceed with mining activities without fully addressing the environmental impacts of the entire operation.

The issue has sparked widespread concern about the protection of both human rights and the environment in Serbia, particularly given the reported irregularities in the assessment process. Opposition to the project has intensified, with 86 members of the Serbian National Assembly submitting a bill to ban lithium and boron mining, currently under debate.

Northvolt’s decision to scale up in a wide range of battery technologies, from EV power cells to lithium-metal batteries for aircraft, added layers of complexity that it struggled to manage. Quality issues resulted in faulty cells, while delays in delivering to Volkswagen’s Scania unit further dented confidence. Health and safety concerns, including toxic chemical leaks, also compounded the company’s woes.

Globally, overcapacity in the battery sector has driven down prices, favoring Chinese suppliers with lower costs. Chief Executive Peter Carlsson pointed to industry-wide challenges, as $1.1 trillion in investments in battery production have outstripped demand, creating a period of low prices and increased competition. Northvolt is crucial to the EU’s Net Zero Industry Act, which aims to boost European battery production, but its failure would be a major setback for the region’s green tech ambitions.

The interim CEO of Northvolt Ett will be Angéline J. Bilodeau, the company’s vice president of operations in North America, who will oversee the gigafactory until the end of the year as the search for a permanent replacement continues.

Northvolt, headquartered in Stockholm, has made significant strides in Europe’s electric vehicle battery sector, partnering with major automakers like Volkswagen and Volvo. However, its recent strategic review has led to the revision of operations in Sweden, focusing on accelerating large-scale cell manufacturing at Northvolt Ett. As part of this effort, the company has cut 1,600 jobs across its Swedish operations.

This is a challenging time for Northvolt, as it continues to navigate financial difficulties while maintaining its position as a crucial player in Europe’s EV battery industry.