China warned the U.K. government on Monday to treat the Chinese owners of British Steel fairly, or risk damaging investor confidence in the country. This comes two days after British authorities took control of the company.
China’s Foreign Ministry issued the warning as government-appointed managers rushed to prevent British Steel from closing the last two blast furnaces in Britain, which produce “virgin steel” from raw materials.
On Saturday, Parliament passed a law allowing the government to take control of British Steel and its Scunthorpe steelworks from Jingye Group, which has owned the company since 2020. While Jingye still owns British Steel, the British government now oversees day-to-day operations.
“We hope the British government treats Chinese enterprises investing and operating in the U.K. fairly and justly, protects their legitimate rights and interests, and avoids politicizing and over-securitizing economic and trade cooperation, to prevent damaging the confidence of Chinese companies in investing and collaborating in the U.K.,” said Foreign Ministry spokesperson Lin Jian during a press conference in Beijing.
A spokesperson for Prime Minister Keir Starmer said Monday that although Jingye still owns the Scunthorpe works, nationalization is “likely in the short term.” However, the government hopes to secure a private investor for the steelworks in the long run.
British Steel announced on Monday that a new executive team has been appointed to ensure stable leadership at Scunthorpe. Allan Bell and Lisa Coulson, two long-serving British Steel executives, were named interim CEO and chief commercial officer, respectively. Business Secretary Jonathan Reynolds approved the appointments.
Bell, who has worked at Scunthorpe for 14 years, said his primary focus is to maintain steel production at the plant. “Our immediate priorities are securing the raw materials needed to continue blast furnace operations, ensuring we have the personnel to run those furnaces, and maintaining high health and safety standards for our workforce,” Bell said.
On Saturday, Starmer took the rare step of recalling Parliament from its spring recess to pass emergency legislation to take control of British Steel. Authorities were concerned about the future of the plant after Jingye stopped ordering iron ore and coking coal, which are essential for the operation of the furnaces.
Once blast furnaces are shut down, they are difficult and costly to restart, leading to fears that the U.K. might lose its ability to produce high-quality steel required by builders and railroads, especially as the government seeks to boost economic growth. Other British steelmakers are transitioning to electric arc furnaces that produce steel from scrap metal.
Government spokesperson Dave Pares said Monday that they are now confident the plant will receive the raw materials necessary for ongoing operations. Shipments of iron ore pellets and coking coal have arrived at the port in Immingham and are expected to reach Scunthorpe soon.