The UK Government has announced a £500 million grant to Tata Steel to support the construction of an electric furnace at the Port Talbot steelworks.
Despite this funding, around 2,500 workers are expected to be made redundant, with an additional 300 job losses anticipated in the future.
Under the new deal, staff facing compulsory redundancy will be offered a training programme that provides recognised qualifications in skills.
Those on the programme will get full pay for the first month and £27,000 a year for the next 11 months, all funded by Tata Steel.
The company also plans to create at least 500 new jobs to help build an Electric Arc Furnace.
Employees leaving the company will receive at least £15,000 in redundancy pay, plus a £5,000 ‘retention’ payment.
Business and Trade Secretary Jonathan Reynolds said: “Port Talbot has always been and will always be a steelmaking town. This deal does what previous deals failed to do – give hope for the future of steelmaking in South Wales.
“Steel is fundamental to the UK’s economy, sovereignty, and communities, but previous government inaction has blighted the steelmaking industry.
“That’s why this government is taking strong action through a new deal and strategy which will reverse the industry’s stagnation and set out a long term vision for a bright and sustainable future.”
Dr Simon Cran-McGreehin of the Energy and Climate Intelligence Unit welcomed the government support but noted that a better-planned transition to new technologies, such as hydrogen, could have saved more jobs.
Trade unions, including Community and GMB, released a joint statement expressing their dissatisfaction with the deal, although they acknowledged improvements secured through negotiations with the government.
The unions secured a comprehensive skills and retention programme and investment commitments from Tata Steel, but noted this was not their preferred outcome.
They said: “Clearly this is not where we wanted to be, and we know that a better plan was available.
“Back in November last year, Community and GMB published the Multi-Union Plan, an alternative approach that would have safeguarded Port Talbot steelmaking and secured a just transition for the workforce.
“Regretfully we couldn’t secure the support of all stakeholders for our credible alternative decarbonisation strategy, and ultimately the company rejected the basis of our proposals, representing a tragic missed opportunity.”
