The dispute between the UK government and Chinese steelmaker Jingye Group over British Steel has deepened, as London moves closer to possible nationalization while the company seeks compensation for the losses and investment it says it has incurred since acquiring the Scunthorpe-based producer in 2020, according to media reports.
Jingye, which bought British Steel for £70 million and says it has invested £1.2 billion in the company, has reportedly asked the UK government for around £1 billion in compensation, while London’s proposed settlement is understood to be below £100 million, with British officials disputing parts of the company’s investment claim as public filings reportedly show that much of the funding was provided through loans by Jingye-related entities.
The dispute escalated after the UK Parliament passed emergency legislation in April allowing the government to take control of British Steel’s blast furnaces, prevent their closure and secure raw materials to keep the site operating, after Jingye said the Scunthorpe works were losing £700,000 per day and rejected a £500 million state rescue package.
Dispute fuels debate over strategic steel assets
The UK government has since introduced the Steel Industry (Nationalization) Bill, which would allow ministers to bring steel companies such as British Steel into public ownership if a public-interest test is met, while industry minister Chris McDonald said the move was aimed at safeguarding domestic steelmaking capability and exploring options to modernize the sector.
China has urged the UK to respect Jingye’s interests and market principles, saying any action should take into account the Chinese company’s investment in British Steel and its contribution to the UK economy, while warning that politicizing a commercial dispute could damage Chinese enterprises’ confidence in investing in the country.
The compensation dispute has also become part of a wider political debate in the UK over Chinese ownership of strategic industrial assets, with British officials and unions raising concerns over the future of steelmaking capacity and employment in Scunthorpe, while Beijing maintains that Jingye’s funding kept British Steel alive after its insolvency and helped protect workers’ jobs.