Jingye Group, the Chinese company that previously owned British Steel, has formally demanded compensation from the U.K. government. The demand follows the government's decision to nationalize the steel manufacturer last week, which Jingye Group claims has resulted in significant investment losses.
The U.K. government assumed operational control of British Steel last year after Jingye Group indicated it was considering closing the blast furnaces at its Scunthorpe plant. Located in northern England, this facility is the last in the United Kingdom capable of producing “virgin steel” directly from raw materials. The plant currently maintains a workforce of approximately 2,700 employees.
In a statement released via WeChat, Jingye Group asserted that the nationalization process has damaged the credibility of the British government, negatively impacted international investor sentiment, and caused substantial losses for both the company and British taxpayers. The company explicitly called for the U.K. government to cease “trampling on international investment rules.” Furthermore, Jingye stated that the U.K. disregarded its continuous investment and contributions, offering what the company described as “almost zero compensation.”
Jingye Group has initiated formal negotiation procedures under relevant bilateral investment agreements. The company stated it is reserving all rights, including the possibility of pursuing international arbitration. Additionally, the firm noted it intends to represent British taxpayers in holding the U.K. government and British Steel’s management legally liable, though it did not provide specific details on its legal strategy. In response to the claims, the U.K. government stated last week that an independent evaluation will be conducted to determine if any compensation is warranted.
The U.K. Department for Business and Trade announced the nationalization on July 17, asserting that the move was necessary to protect the national interest, ensure a domestic steel supply for defense and major construction projects, and save thousands of jobs. Steel has been produced at the Scunthorpe site for over 130 years.
The Chinese Foreign Ministry addressed the situation on Saturday, stating that the U.K.'s handling of this matter will influence how Chinese investors perceive the British investment climate. The ministry urged the U.K. to respect market principles and contractual obligations, adding that it supports enterprises in protecting their rights through legal channels.
“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.
