By Pierre Bertrand

Tata Steel said it will continue closing its heavy assets at Port Talbot in southern Wales and called on the British government to safeguard funds after media speculation that the country's election could disrupt the restructuring program.

The Indian multinational steel-making company said U.K. media reports suggested that the 1.25 billion pounds ($1.59 billion) to be invested as part of the reorganization plans could be jeopardized by policy differences between the Conservative and Labour parties. The country goes to the polls on July 4.

In January, Tata Steel said it expected up to 2,800 employees would be affected by the restructuring of its U.K. business as it aimed to close Port Talbot's two high-emission blast furnaces and coke ovens around mid-2024, with the remaining heavy-end assets winding down during the latter part of the year.

The company said Tuesday that it was calling on the U.K. government to adhere to and safeguard the agreed-on terms for GBP500 million going toward Tata's electric-arc furnace project. As part of the deal, Tata Steel would invest GBP750 million in the project aimed at transitioning to more sustainable steel production

"Further political uncertainty on the timing and form of the grant will place the [electric arc furnace] project and the long-term future of steelmaking at Port Talbot at significant risk," Tata Steel said.

The company's heavy assets at Port Talbot are approaching the end of their life, are operationally unstable and causing unsustainable financial losses, it said.

Write to Pierre Bertrand at

(END) Dow Jones Newswires

06-11-24 0331ET