Jingye Group seeks compensation after British Steel investment dispute
Chinese company activates international treaty process for resolution
Last updated 15 hours ago
Jingye Group is to seek compensation for its investment in British Steel and his triggered a process to do so through an international treaty. The Chinese firm stepped in to buy, and at the time rescue, British Steel in 2020.
But last year, while in charge of the company, there was a running down of raw materials supplies for Scunthorpe’s blast furnaces as Jingye sought a much larger Government package of funding support than the £500m offer that was on the table. The steelworks also started a redundancy consultation process with workers.
The Government stepped in at the eleventh hour, recalling Parliament for a Saturday sitting, so it could pass legislation to allow it to intervene. Raw materials supplies were replenished in time and the redundancy consultation was scrapped.
British Steel has been directed by the Government since April 2025, but remains owned by Jingye Group. Negotiations have taken place since to resolve this situation and end Jingye’s ownership of the company, but these have not been successful.
It has been widely reported a key issue was Jingye seeking a substantially higher price, around £1bn, than the Government was prepared to offer for British Steel, on the grounds of seeking compensation for the investment it put in. The firm said last Spring it was losing £700,000 a day from running the steelworks.
Now, Jingye has stated it will seek the compensation by other means. “Jingye has recently initiated consultation procedures under the bilateral investment treaty with the UK government,” the company said on social media platform WeChat, according to Reuters. The statement added that Jingye hoped the UK government could fully safeguard the legitimate rights and interests of Jingye and other Chinese businesses, as well as global investors.
A bill to enable nationalisation of British Steel has completed its main passage through the House of Commons this week. This will now head off to the House of Lords, only returning to the Commons if amendments are passed to it.
When plans for nationalisation were announced last month, the Chinese Government issued a statement calling on the British Government to “respect the wishes of firms and market principles, and avoid the abuse of administrative coercive measures.” Earlier this year, a National Audit Office (NAO) report into the Government’s intervention in British Steel was frank about how close Scunthorpe’s blast furnaces came to running out of supplies.
It stated that in late April, the steelworks got down to one day’s worth of iron pellets before it would have reached minimum levels. The NAO also stated in the same report that Government spending to keep British Steel operational was expected to reach £615m by June.