Doubts are emerging over Tata’s long-term commitment to Port Talbot blast furnaces
New concerns are emerging over Tata's commitment to maintaining two blast furnaces at the Port Talbot steelworks.
The Indian conglomerate is expected to commit to the long-term future of the site within weeks, but with one furnace in need of relining, observers are concerned Tata will only implement a short-term fix.
The furnace is due to go out of operation in 2018, and relining would cost north of £100m.
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A source close to the business told City PM fears are growing Tata will only commit to partial repairs ahead of a switch to an electric arc system which focuses on converting scrap into steel, and needs fewer staff to operate.
“That will mean more job losses,” they said. “So if there is going to be a pitched battle here, it will be around that.”
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A Tata Steel spokesman said the firm would not comment on "speculation".
Steelworkers union Community is optimistic that Tata will announce its plans within days, although Tata has repeatedly delayed a verdict on the site, often at short notice.
However, a decision is due before 21 December, when the Indian firm will hold an Extraordinary General Meeting in Mumbai.
A resolution is also expected on the future of the British Steel Pension Scheme, which has been subject to long-term speculation as union representatives have battled to save workers savings from the Pension Protection Fund, which would leave many retirees from the Port Talbot site worse off.
It comes days after the Indian firm entered exclusive negotiations with Liberty House over the sale of several sites in South Yorkshire.