A Chinese conglomerate that formerly owned British Steel is demanding compensation from the UK government for investment losses after the steelmaker’s nationalisation last week.
The UK government took operational control last year after Jingye Group considered closing its Scunthorpe plant’s blast furnaces.
In a WeChat statement, Jingye claimed the nationalisation “tarnished the credibility of the British government, spooked international investors and caused great losses to the company’s operation and British taxpayers’ funds.” It also demanded the UK government cease “trampling on international investment rules.”
The firm has initiated negotiation procedures under bilateral investment agreements, reserving all rights. Jingye stated it would also represent taxpayers seeking to hold the UK government and Steel’s management legally liable, though specifics remain undisclosed.
“The U.K. disregarded Jingye’s continuous investment and significant contribution and was only willing to provide almost zero compensation,” it said.
An independent evaluation will be carried out to determine whether any compensation will be paid to Jingye Group, the U.K. government said last week.
The Department for Business and Trade announced the move on July 17, saying it would save thousands of jobs and protect the U.K.’s national interest by ensuring a supply of domestically produced steel for major construction projects and the defense industry.
British Steel and its forebears have been making steel at Scunthorpe for more than 130 years, building on the U.K.’s development of improved steelmaking technology during the Industrial Revolution. The plant currently employs about 2,700 people.
Jingye bought British Steel in 2020 and said it saved the steel company from crisis.
The Chinese Foreign Ministry on Saturday said the way the U.K. handles the issue would directly influence how Chinese investors view the British investment environment and the credibility of the British government.
“China urges the UK to earnestly respect market principles and the spirit of contract, and find solutions on compensation and other issues acceptable to both sides,” it said in a statement.
It added China supports enterprises in safeguarding their legitimate rights through legal means.
