‘Catastrophic’ planning decision will squeeze steel supply

Multinational manufacturer ArcelorMittal has warned a “catastrophic” planning decision will cut the UK’s access to concrete rebar steel by nearly a third.

Chatham Docks in Kent, which is the firm’s only site producing the product, is set to close after Medway Council approved a project to develop a mixed-use scheme there yesterday (30 May).

ArcelorMittal called on the incoming secretary for levelling up, housing and communities to re-examine the project after the 4 July general election.

In September 2020, Labour leader Keir Starmer said he was “proudly supporting” the campaign to save industry at the docks.

Luxembourg-based ArcelorMittal has produced reinforced concrete steel at Chatham Docks for projects including HS2, Thames Tideway and Crossrail, and the firm was hoping to supply the Lower Thames Crossing as well.

The steel reinforcement produced at Chatham is used for fabric reinforcement, bespoke rebar, prefabricated elements and wire products for the precast industry.

Without a post-election intervention by the government, ArcelorMittal warned it may have to pull out of the UK reinforced concrete steel market.

Developer Peel Waters now has preliminary approval from the council to build 31,000 square metres of workspace at the docks.

The regeneration specialist said its Basin3 plan would act as “a catalyst for innovation and collaboration”.

But speaking to Construction News before yesterday evening’s council vote, ArcelorMittal Kent Wire’s chief executive, Phil Taylor, said the move would be “catastrophic” for the firm and a “significant loss to the UK construction industry”.

“We’re a principal supplier of steel reinforcement for the UK construction industry,” he said. “In sum, around 30 per cent of the reinforcement supply requirements in the UK come out of the facility at Chatham Docks.”

About 800 jobs would be lost if the docks closed for redevelopment, Taylor warned.

He also said ArcelorMittal had presented a masterplan to the council to expand the industrial site, but that the council considered Peel Waters’ plans instead.

“[Our masterplan] would create 100,000 square metres of industrial space, upwards of an extra 2,500 jobs and, most importantly, it would protect the existing jobs on the site where the masterplan was being delivered,” Taylor said.

He called on the next secretary for levelling up, housing and communities to “intervene and stop this threat to the UK construction sector”.

Taylor also warned that prices for reinforced steel would soar and lead times would increase if ArcelorMittal left the market, as demand would outstrip supply and the remaining UK-based producers would ration their stocks.

He said there was a “high probability” that ArcelorMittal would not relocate its site again because of the high costs associated with moving. The previous site move at Chatham in 2014/15 cost the firm more than £7m to relocate 500 metres away.

The port site itself is perfect for ArcelorMittal’s operations, Taylor said, as it is easy to transport raw materials from its parent company in Hamburg, Germany. It is also easily accessible by road and is based in the South East, an industry heartland.

Peel Waters has said the approved programme would generate “hundreds of new jobs”. But Taylor argued: “You don’t destroy existing jobs in order to promise some jobs at some point in the future.”

He added: “I fear that Medway Council officers and some councillors are being hoodwinked by promises of jam tomorrow that simply won’t be delivered. And, in doing so, [they] will destroy highly skilled, well-paid existing jobs.”

A council spokesperson confirmed that it had approved Peel Waters’ plans.

“A report will be sent to the secretary of state for levelling up, housing and communities, who will determine whether to call in the decision for a public inquiry,” they added.

Peel Waters managing director James Whittaker said the firm’s plans would deliver a “dynamic employment enterprise destination that integrates with existing communities while attracting new employers and business to the area”.

“Receiving outline planning permission for Basin3 will help attract significant inward investment into Medway,” he added. “We look forward to helping build an exciting new future and legacy for this employment site in Medway.”

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