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(Sharecast News) - Thousands of jobs were put at risk on Thursday, after British Steel announced plans to shut two blast furnaces at its Scunthorpe plant, just days after rejecting a 500m government lifeline.
The company, which is owned by China's Jingye, wants to close two blast furnaces and steelmaking operations at the site, as well as reducing steel rolling mill capacity.
Between 2,000 and 2,700 jobs would be affected, out of a total of 3,500
British Steel said that despite significant investment, the blast furnaces and steelmaking operations were "no longer financial sustainable, due to highly challenging market conditions, the imposition of tariffs and higher environmental costs relating to the production of high-carbon steel".
Nearly two years of talks with the UK government about a capital investment in new electric arc furnaces had failed to secure agreement, it added. A proposed 500m government package was rejected by British Steel only this week.
As a result, British Steel will now start consulting with employees, with some closures potentially happening as early as June.
Zengwei An, chief executive, said: "We understand this is extremely difficult day.
"But we believe this is necessary decision, given the hugely challenging circumstances the business faces."
Unite, the union, called the announcement a "disgrace" and accused British Steel of holding the government "to ransom".
General secretary Sharon Graham said: "In discussions with Unite, the government has clearly moved and has made an offer to invest heavily in British Steel. The offer comes with long-term job guarantees - anything less would be complete misuse of taxpayers' money.
"British Steel must now withdraw its job threats and work with the government and Unite on a sustainable way forward."