Tata Steel is confident it will secure sufficient ore-based metallics supply to feed its prospective electric arc furnace at Port Talbot, despite concerns over DR pellet shortages. It will also look into the viability of gas- and hydrogen-based direct reduction at the site, Tata Steel chief executive TV Narendran said during a Welsh Affairs Select Committee meeting on Wednesday.

Narendran pointed out the decision to close the Port Talbot blast furnaces was made because Tata has had no return on investment in 15 years of operation, the production assets are reaching the end of their lifecycle, and decarbonisation financing is available. To keep the BF running without the coke ovens would mean another $600 million in loss funding is required and at least $200m in capital expenditure, the ceo added.

“The electric arc furnace need not be the end – it is the beginning. Tomorrow … if there is gas available in plenty in Port Talbot … and if there is some funding available to invest in a DRI unit, we can always set up a DRI unit,” Narendran noted during the meeting monitored by Kallanish. However, the firm is yet to discuss this with UK government.

At Tata’s Ijmuiden plant in the Netherlands, thanks to gas availability in that country, the firm plans to build a gas-based DRI-EAF operation, later migrating to hydrogen when it becomes available. It is yet to conclude discussions with the Dutch government over the sum of funding, Narendran said.

Tata Steel UK ceo Rajesh Nair added that, unlike Port Talbot, Ijmuiden already has a pellet plant which facilitates the DRI route.

The firm has also studied the possibility of using a reducing electric furnace (ESF) at Ijmuiden. However, since the technology is still unproven and the investment required is considerable, it decided to wait till another firm builds it first, Narendran explained.

Pressed by Stephen Kinnock, MP for Aberavon, about concerns over access to sufficient metallics supply to blend with scrap feed in the EAF, the executive said: “We will have access, we are a big global player.” There is a lot of work going on globally to increase DR-grade pellet supply, which should address any supply problems in the next 3-4 years, he added.

Kinnock argued it is “hugely risky” to abandon the BF on the basis of there potentially being sufficient pellet supply “from somewhere in the world” to run the EAF. Narendran countered by saying that running the BF/BOF in the same meltshop as the EAF would be even more risky.

The Aberavon MP also highlighted the risk of the EAF not being commissioned in time and steel feedstock imports for Port Talbot from India then being impacted by the UK’s Carbon Border Adjustment Mechanism (CBAM). “All the more reason we want to build the electric arc furnace sooner than later,” Narendran replied.

Asked about the national grid connection for the new EAF, Narendran said power supply was initially seen as a bottleneck but it is now scheduled to be ready for 2027. Nair added: “That’s a formal commitment from the National Grid to make that happen, so it’s well within our plans.”

Narendran said that although Tata has made no commitment yet to build a scrap shredder at Port Talbot, it does plan to invest in the UK scrap supply chain.

Kinnock also pointed to concerns about Ijmuiden blast furnace no.6 operational issues impacting the Trostre site’s ability to source feedstock from there once the Port Talbot BFs are shut. “That blast furnace [BF6], yes, did get delayed … It’s starting this week, so that’s behind us … It was basically a relining of blast furnace 6, that’s now complete, so we should have the feed [for Trostre] and we are making sure that, if required, we can feed the Netherlands from India, so that the Netherlands can support the UK,” Narendran concluded.

Asked about whether Tata will in fact build the Port Talbot EAF, the ceo said: “Yes, we are committed to building an electric arc furnace.”