Jingye Group, the Chinese owner of British Steel, has demanded full compensation from the UK government, describing the forced nationalization of its subsidiary as “outright robbery.”
The UK government took operational control of British Steel last year after Jingye warned that Britain’s last facility capable of producing steel from raw materials was no longer financially viable.
In a statement published on social media, Jingye accused UK ministers of “trampling on international investment rules” and said it would pursue legal action to recover damages.
The company 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.”
Jingye also claimed the UK “disregarded Jingye’s continuous investment and significant contribution and was only willing to provide almost zero compensation.”
The Chinese firm warned that the nationalization process could cost UK taxpayers more than 1.5 billion pounds, equivalent to roughly $2.02 billion, by 2028.
Jingye confirmed it had initiated a formal procedure under bilateral investment agreements to seek damages, though it did not elaborate further on the specific legal mechanisms involved.
China’s Foreign Ministry backed the move, 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 UK government originally intervened after Jingye planned to close the blast furnaces at its Scunthorpe plant in northern England, passing emergency legislation to take operational control and prevent permanent closure.
Ministers cited national security grounds for the seizure, emphasizing the need to protect strategic steel supplies for construction, rail infrastructure, and defense purposes.
The Scunthorpe plant currently employs approximately 2,700 workers in an economically deprived region, making job preservation a central argument for government intervention.
The UK Parliament has since passed legislation enabling the government to bring British Steel into full public ownership, with an independent valuer required under the new law to assess whether any compensation is owed to Jingye.
Jingye acquired British Steel in 2020 for around 70 million pounds from a London-based private equity firm, and reported investing 1.2 billion pounds into the business before declaring the Scunthorpe plant was still losing around 700,000 pounds per day.
The Scunthorpe facilities have produced steel since the late 19th century and were first nationalized after World War II, returning to private hands in 1988 under Prime Minister Margaret Thatcher before passing through multiple owners due to high operating costs, fierce competition, and overcapacity.
