London: Tata Steel said it has signed a contract with an Italy-headquartered metals technology multinational to deliver a state-of-the-art electric arc furnace (EAF) as part of its green steelmaking drive in the UK. The Indian steel major's pact last week with Tenova for its Port Talbot site in Wales, the UK's largest steelworks, has been described as a significant milestone on the road to reducing carbon emissions by 90 per cent a year once it is commissioned from the end of 2027.

Under the agreement, Tenova is to supply an EAF with an annual capacity of 3 million tonnes of steel - similar to the output of the site's blast furnaces decommissioned recently - by melting scrap steel sourced from the UK.

"This partnership follows in the footsteps of an improved deal between the government and Tata Steel, and is further proof of our commitment to a bright future for UK steelmaking," said UK Business and Trade Secretary Jonathan Reynolds.

"Technology like the furnaces made by Tenova is critical to decarbonising the industry, unlocking its potential to provide skilled jobs, and creating economic stability for future generations of steelworkers in South Wales. Our upcoming steel strategy will provide further certainty for the sector as we set out our plan for its long-term growth and viability, backed by up to GBP 2.5 billion for steel," he said.

The agreement follows a GBP 1.25 billion joint investment confirmed by Tata Steel and the British government recently, with Tata Steel investing GBP 750 million and the government up to GBP 500 million.