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Jingye to invest £ 1bn and save 'thousands of British steel jobs'

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Chinese firm Jingye has announced it will invest £ 1.2bn in British steel after signing a bailout deal with the steelmaker in the UK.

It is also said to be trying to "save thousands of jobs a key industry for the UK", but did not say how much they would save.

British Steel employs about 4,000 people in Scantorpe and Theside.

The government had been running it through an official recipient since May, when the company went into liquidation.

Ingingi said he envisions offering job offers "to as many business people as possible".

The group's president, Lee Ganpo, said he would spend £ 1.2 billion over the next decade on upgrading plants and machinery, "improving the company environment …

It also said it would aim to identify new markets and products.

National security

Business Affairs Minister Andrea Vodedom said she met with the president of engineering on Monday.

"They have given me assurances that all current employees will be protected and that in the medium to long term they will probably want to expand their workforce," she said.

The deal will give the Chinese company control of a third of the steel industry in the UK. But Ms Leadom said: "There are no issues with national security with this acquisition.

"In my dealings with Jingye, I think they will prove to be very committed to extended and extended production [here] in Scantorpe and Tesseside. "

Inginge will acquire Scantorp steel mills, steel mills in the UK and shares of FN Steel BV, British Steel France Rail SAS and TSP Engineering. The sale also includes shares owned by BSL at the Red Bull terminal.

A statement from the Official Recipient states: “The termination of the contract is subject to a number of matters, including obtaining the necessary regulatory approvals. The parties work together to make a sale as quickly as possible.

"Business will continue to trade as normal during the period between exchange and termination. Support from employees, suppliers and customers because liquidation is a key factor in achieving this outcome. "

One British Steel worker at Scantorp told the BBC: "It was a big worry, no one knew what was going on … whether they had a job, could pay mortgages, feed their families. That's great news. "

Why is this important news?

Gareth Stacey, chief lobbyist for the UK Steel Industry, told BBC Radio 4's Today program that the business he bought was "an important asset to our country".

He said there was a need for "a very significant investment" in Scantorp's work and therefore a deal with Ingings was "really welcome".

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Media headlineBritish Steel is Scantorp's largest employer

British Steel had previously been in talks to rescue it with Ataire, a subsidiary of Turkey's state-owned military pension scheme Oyak. Ataire said the talks themselves failed "mainly due to a lack of support from key stakeholders".

What's in it for Jingye?

What does a steel producer from Hebei Province, southwest of Beijing, see in a heavy-duty factory in Scunthorpe? It's hard to know, especially when we know so little about Jingye.

There is little public information available – of course, no accounts – but the organization's Facebook page is expanding its rapid growth to become a big steel player in just 20 years.

On the face of it, the Chinese buyer will be interested in the products that British steel makes for them. British Steel is a specialist in railroads, "long products", small overlays for construction and high quality steel wire used in car tires and dozens of other industrial applications.

Jingye doesn't seem to be making the first two, so British steel should bring her some valuable technology and new product lines. This should counter the need for investment in Scantorpe.

What British steel workers will vigorously hope for is that Jingye's commitment is long-term and that this is no other false dawn.

Will British steel turn the corner now?

Mr Stacy said he believes the steel industry in the UK can now compete globally and publish a manifesto of ideas for change.

"But the problem we have is to have an uncompetitive business landscape in the UK. The government can change that, "he added.

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"I'm talking about energy costs, business rates, procurement – the government buys more steel from the UK – free and fair trade and even more support for R&D [research and development], what we will lose when we leave the EU. "

He said: "What the government needs to do is give us that business landscape. We can thrive in the global marketplace and generate highly paid, highly skilled jobs for the UK economy."

What's happening now?

In the long run, it is believed that while the Jingye Group has pledged to increase production, it has also warned that costs may have to be cut.

Ross Murdoch, GMB national union officer, said: "We were impressed by Jing's team's passion and enthusiasm.

"However, the duty of this sale was completed very quickly and the devil will be in the details."

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The union, a UK trade union that absorbs the old body of the Confederation of Rail and Steel Crafts, said it welcomed "this positive step towards securing British steel under new ownership".

"The fact that there is a continuing interest from Ataire and now Jingye rightly proves that potential buyers believe that British Steel can have a sustainable future."

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The UK industry has been struggling for years over claims that China is flooding the market with cheap steel.

In 2016, the EU introduced tariffs of up to 73.7% on Chinese steel after the influx of cheap imports from Asia forced European producers to cut jobs and lower prices.

What is a Jingye group?

Jingye has 23,500 employees and, like its main steel and iron businesses, also deals with tourism, hotels and real estate.

There are total registered assets of 39 billion yuan (4.4 billion pounds). According to its website, Jingye Group ranked 217th among the top 500 enterprises in China in 2019.

The company sells its products nationwide and exports them to more than 80 countries and regions.

Jingye's products are used in major projects such as Beijing Daxing International Airport and Jiangsu Underground System.

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