Tata Steel has inked a contract with an Italian-based metals technology multinational to deliver a cutting-edge electric arc furnace (EAF) as part of its green steelmaking initiative in the UK.

The Indian steel major's agreement with Tenova last week for its Port Talbot complex in Wales, the UK's largest steelworks, has been regarded as a key step toward cutting carbon emissions by 90% per year once it is operational by the end of 2027.

Tenova will supply an EAF with an annual capacity of 3 million tonnes of steel, equivalent to the output of the site's recently deactivated blast furnaces, by melting scrap steel obtained from the UK.

"This partnership follows in the footsteps of an improved deal between the government and Tata Steel, and is further proof of our commitment to a bright future for UK steelmaking," said UK Business Secretary Jonathan Reynolds.

"Technology such as Tenova furnaces is important to decarbonising the sector, unlocking its potential for skilled jobs, and ensuring economic stability for future generations of steelworkers in South Wales.Our planned steel strategy will provide more confidence for the sector as we outline our goal for long-term growth and viability, underpinned by up to GBP 2.5 billion in steel," he said.

The arrangement follows a previously announced GBP 1.25 billion joint investment by Tata Steel and the British government, with Tata Steel spending GBP 750 million and the government contributing up to GBP 500 million.

"This landmark agreement will allow us to transform our steelmaking site, supporting not only the UK's decarbonisation journey but also providing economic development opportunities for South Wales," stated T V Narendran, CEO and MD of Tata Steel Limited.

"Today is a significant milestone in making low-CO2 steelmaking a reality in Port Talbot, as well as reducing the UK's carbon emissions and assisting our customers with their own carbon reduction targets," said Narendran, who attended the contract signing in Port Talbot on Friday following the project's board approval.

The utilization of scrap aims to reduce Britain's reliance on imported iron ore while also boosting the country's manufacturing supply chains. Tenova's new ladle metallurgy furnaces will refine molten steel to more complicated grades demanded by UK and international producers.

Paolo Argenta, Executive Vice President of Tenova Upstream Business Unit, stated, "We are working with Tata Steel UK at an unprecedented level of transparency and cooperation, and we are confident that this will result in a successful project implementation."

Tenova's global engagement with Tata Steel, which includes projects in other parts of the world, strengthens our existing partnership.

According to Tata Steel UK, thorough engineering is currently underway, and additional equipment orders for the Hot Strip Mill and Casters life extension, new Pickle Line, cranes, construction management, and civil engineering will be placed shortly thereafter.

The Mumbai-based steel company said it has concluded public consultation on the planning application and is working closely with the authorities to submit it next month, with large-scale site work expected to begin in July 2025.

Tata Steel is the UK's largest steelmaker, with core production at Port Talbot, South Wales, and manufacturing and distribution activities throughout Wales, England, Northern Ireland, Norway, Sweden, France, and Germany.