China's Jingye Group has demanded compensation from the United Kingdom government, labeling the state's takeover of its subsidiary, British Steel, as "outright robbery." The Chinese steel giant, which acquired British Steel in 2020, issued a statement on social media on Saturday, threatening legal action and accusing UK ministers of "trampling on international investment rules."
Jingye stated it "reserves all legal rights, firmly defends its lawful rights and interests, and will pursue full compensation through legal means to the very end." The company further criticized the UK, claiming it "disregarded Jingye's continuous investment and significant contribution and was only willing to provide almost zero compensation."
The UK government took operational control of British Steel last year after Jingye Group warned that the facility, Britain's last factory capable of making steel from raw materials, was no longer financially viable. The immediate concern was to prevent the permanent closure of the blast furnaces at the Scunthorpe plant in northern England, which accounts for the vast majority of British Steel's operations and employs approximately 2,700 people.
Ministers cited national security as a key reason for the intervention, emphasizing the need to protect strategic steel supplies essential for construction, rail infrastructure, and defense. The move was also intended to safeguard thousands of jobs in a deprived area of the UK.
In recent weeks, the UK Parliament passed new legislation that enabled the government to bring British Steel into full public ownership on Thursday. Under this new law, an independent valuer will be tasked with assessing whether any compensation is payable to Jingye.
Jingye Group highlighted its reported investment of 1.2 billion pounds into British Steel, yet claimed the Scunthorpe plant was still incurring losses of around 700,000 pounds per day. The company also projected that the nationalization could cost UK taxpayers more than 1.5 billion pounds ($2.02 billion, €1.76 billion) by 2028. Jingye confirmed it has initiated a procedure under bilateral investment agreements to seek damages.
China's Foreign Ministry publicly supported Jingye's demand for compensation, urging the UK to "earnestly respect market principles and the spirit of contract, and find solutions on compensation and other issues acceptable to both sides."
The history of the UK steel industry includes nationalization after World War II, encompassing the Scunthorpe facilities, which have been producing steel since the late 19th century. The sector was privatized in 1988 under then-Prime Minister Margaret Thatcher. Since then, it has changed hands multiple times due to significant losses driven by high operating costs, fierce competition, and overcapacity. The British Steel brand was revived in 2016 by Greybull Capital, which purchased the firm for 1 pound and briefly achieved profitability before the company later filed for insolvency, leading to its acquisition by Jingye Group in 2020 for around 70 million pounds.
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