Tata Steel is pursuing additional government funding as the UK steel industry faces a deepening crisis. Britain's largest steelmaker has approached the Department for Business, Innovation, Science and Technology (DBIST) in recent weeks to negotiate a new multimillion-pound support package, according to Sky News.

This fresh request comes on top of the £500 million ($669.48 million) grant awarded to Tata Steel in 2023 for the construction of an electric arc furnace (EAF) at its Port Talbot site, one of the UK's key manufacturing hubs.

The public grant formed part of a total £1.25 billion investment for the plant, originally targeting EAF commissioning by early 2028, three years after construction kicked off. The transformation plan was designed to safeguard 5,000 UK steelmaking jobs, even though 2,500 positions have already been cut during the transition. Port Talbot's final blast furnace shut down in 2024.

Grid connection delays have pushed back the timetable, and Tata Steel now estimates the new EAF will not become operational until late 2028 or early 2029. The firm calculated that rising project costs and lost revenue stemming from the EAF delay will substantially inflate total spending. The exact amount of extra funding Tata Steel is requesting from Whitehall remains unclear, though industry sources said the figure is likely to reach hundreds of millions of pounds. Business Secretary Jonathan Reynolds has been notified of the company's funding approach.

Tata Steel has repeatedly flagged viability risks for Port Talbot over many years, with threats of plant closure lingering for the past decade. Cheap steel imports have weighed heavily on its operations; a senior executive warned late last year that the UK had become "an unfairly priced dumping ground for cheap imports". Earlier this year, reports emerged that the group was considering mothballing its UK steel mills amid mounting losses.

Union leaders warned this summer that Tata Steel's Llanwern plant in Newport, South Wales, faces heightened risks, partly due to generous steel quotas granted to India under the recently sealed UK-India free trade agreement. Steel imports from Vietnam and South Korea have also intensified price pressure on the firm's galvanized steel output.

The £1.25-billion Port Talbot investment was meant to sustain large-scale steel production in Britain.