New Delhi: Indian steelmakers Tata Steel and Lakshmi Mittal’s ArcelorMittal operating in the UK and Itlay respectively are on the verge of shutdown owing to various environmental issues being raised against their operation.

While plans are on the anvil for Tata Steel to close down its two coal-fired blast furnaces at its Welsh steelworks to shift greener and cheaper steelmaking units, Mittal's steel factory, which is facing allegations of spewing cancer-causing chemicals, faces a government takeover.

The closing down of Tata Steel has caused consternation among 2,800 workers who could lose their jobs by the end of 2024. However, the firm, which employs 4,000 workers totally at the furnaces in Port Talbot, has been trying to reassure the workers and unions that the decision is important for the long-term survival of the entire Port Talbot operation, but with little avail.

According to The Telegraph, Tata Steel chief executive T.V. Narendran says, "Our ambitious plan" is aimed at "guaranteeing long-term, high-quality steel production in the UK and transforming the Port Talbot facility into one of Europe's premier centres for green steelmaking".

The changes include replacing coal-fired blast furnaces with less-polluting, lower-carbon electric arc furnaces, which the company says, will melt scrap steel rather than producing virgin steel from iron ore. According to the estimates, the change will ensure a reduction in the overall UK CO2 emission by 1.5%. However, the changes would take about three years and would come at the cost of 1.25 billion pounds sterling, including 500 million pounds sterling paid by the government.

However, workers, union leaders, and politicians from the Labour Party do not buy into the version presented by the firm and the political establishment that is supporting the move. Calling it "industrial vandalism on a grand scale", they demand the firm to keep at least one blast furnace open while the upgrade is ongoing. Unless their demands are not met, workers say, they would resort to industrial action.

On the other hand, Mittal's steel plant in Italy's Taranto is ready to be taken over by the government amid environmental problems the firm has been facing and debts of $200 million it owes to its gas supplier. An Italian court has recently permitted the gas company to stop supply to the Mittal plant, which is among Europe's largest steel plants.

Invitalia, the Italian government’s state investment agency, which has a stake in the Taranto plant, has initiated legal proceedings to put in place a special administrator to oversee the process and planning to remove ArcelorMittal from the management. According to the newspaper, "special administration" in Italy is a bankruptcy scheme intended to keep companies functioning while their financial problems are sorted out.

The closure of the Mittal steel plant means the ousting of nearly 10,000 workers it employs, a fallout that Italian Prime Minister Giorgia Meloni's government has been desperately trying to avoid. However, it wants ArcelorMittal to inject 320 million euros into the steelworks. In fact, economic development minister Adolfo Urso told the Italian parliament that "drastic intervention" is needed to save the steel plant.

However, ArcelorMittal says it is not in a position to do so given the Taranto plant has been suffering from major environmental problems since Mittal took over the plant in 2018.

The issues faced by both Tata Steel and ArcelorMittal bring to the fore the challenges being faced by steel producers in Europe and the UK, where firms face an uphill task to stay afloat given high environmental awareness and expensive unionised labours.

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