Chinese Company Seeks Compensation After British Steel Nationalization

The Chinese firm that previously owned British Steel is seeking compensation from the United Kingdom government. This follows the U.K.’s decision to nationalize the steel manufacturer last week. The British government assumed control of the company last year, citing the potential closure of blast furnaces at its Scunthorpe plant as a reason. This plant is the only one in the U.K. producing virgin steel from raw materials.

Jingye Group, the former owner, stated on WeChat that the nationalization undermined the U.K. government’s credibility and deterred international investors. Jingye claims that this action has led to significant operational losses for the company and British taxpayers. It called on the U.K. government to respect international investment protocols.

The company has initiated negotiations under bilateral investment agreements. Jingye reserves the right to pursue international arbitration and intends to represent British taxpayers in holding the U.K. government and British Steel’s management accountable, though specifics were not provided.

According to Jingye, the U.K. government overlooked its investments and contributions, while offering almost no compensation. An independent evaluation will assess whether the U.K. will compensate Jingye Group.

The Department for Business and Trade justified the nationalization on July 17, emphasizing job preservation and the importance of maintaining a domestic steel supply for significant construction projects and the defense sector. The Scunthorpe facility, with over 130 years of steel production history, employs roughly 2,700 workers.

In 2020, Jingye Group acquired British Steel, which was then facing a crisis. The Chinese Foreign Ministry remarked on Saturday that how the U.K. resolves this matter will impact Chinese investors’ perceptions of the British investment climate and the government’s reliability.

China has urged the U.K. to adhere to market principles and contractual integrity, seeking solutions on compensation acceptable to both parties. The Chinese government supports companies using legal avenues to protect their rights.