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Welsh Government pledges £8m to cut energy costs at Tata steel plant

The Welsh Government has announced an £8 million contribution towards an £18 million investment to cut energy costs at Tata's Port Talbot steel plant, in a fresh boost to the industry.

The aim is to reduce energy costs and cut carbon emissions at the huge plant in South Wales, which employs more than 4,000 workers.

The news followed a breakthrough on jobs and investment on Wednesday aimed at securing Tata's UK business following months of uncertainty.

Welsh First Minister Carwyn Jones said: "The Welsh Government has worked tirelessly over many months to help find a viable future for the Tata operations in Wales. We have worked closely with Tata's management teams to develop an investment plan to enable real efficiencies to be delivered across the Welsh plants and help safeguard jobs into the future.

"Innovation and working to high environmental standards are critical to ensuring the steel industry in Wales is globally competitive and has a long-term future here. So I am delighted to be able to announce this package of support to ensure the Tata sites in Wales remain at the cutting edge of the industry.

"The £18 million investment in the power plant at Port Talbot will reduce electricity costs and cut carbon emissions by recycling waste process gasses that currently escape to the atmosphere.

"Tata have also agreed to make South Wales one of their two main research and development sites in the UK and will explore the development of new products at Port Talbot.

"Our support provides a critical component part of the company's plan to deliver a sustainable business and follows yesterday's agreement between Tata and the unions."

The First Minister added: "While today's announcement is a key part of providing a brighter future for steel-making in Wales, I am again calling for the UK Government to urgently tackle the UK's high energy costs relative to mainland Europe.

"In today's trading environment this issue is more important than ever before."

Bimlendra Jha, chief executive of Tata Steel UK, said: "Today's announcement from the Welsh Government will be an important contribution towards developing a sustainable future for our steel business based in Wales and throughout the UK.

"There is still much work to be done to ensure Tata Steel UK is sustainable, requiring all stakeholders to do all they can to enable the company to achieve its plan in the coming months and years.

"Today's announcement builds on yesterday's news from Tata Steel UK and the trade unions of further steps we will be taking."

On Wednesday, unions announced a number of "significant" measures after talks with Tata, including keeping two blast furnaces at Port Talbot for five years, a commitment to seek to avoid compulsory redundancies for a similar period, a 10-year investment plan of £1 billion, and consultation on replacing the pension with a defined benefit scheme.

Unions said the commitments on jobs, production and investment were welcome, although the pension proposal was "worrying".

The future of Tata plants has been in doubt since its UK business was put up for sale in March.

The Indian conglomerate put the sale on hold in the summer as it considered a tie-up with German steelmaker ThyssenKrupp.

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