The Chinese owner of British Steel has begun seeking compensation under an international treaty after the government nationalised the steelworks – but Whitehall has signalled it could refuse to pay out.
Jingye Group, which bought the Scunthorpe plant in 2020, said it had initiated consultation procedures under a bilateral investment treaty (BIT) with the UK government. The company had previously claimed the facility was losing £700,000 a day.
“UK signals it may block compensation to Jingye, Chinese owner of nationalised British Steel, under investment treaty.”
Emergency legislation passed in April 2025 allowed the government to seize control of the business on 12 April, preventing the closure of the last two remaining blast furnaces. Now the Department for Business and Trade (DBT) has made clear that any compensation would be independently assessed and only paid “if any, is payable”.
“We will always respect and comply with our international obligations,” a DBT spokesperson said in a statement on Friday. “Where the powers in the Bill are used, an independent valuer will be appointed to determine what compensation, if any, is payable.”
The Steel Industry Bill, which enables nationalisation, has completed its main passage through the House of Commons and is set to be considered by the House of Lords. The development comes after months of failed talks between Jingye and the government over a transition to electric arc furnaces between 2022 and 2025, which collapsed amid accusations that the Chinese firm planned to switch the furnaces off.
Jingye, which employs 2,700 staff at British Steel, said in a statement on its WeChat account that it hoped the UK government would “fully safeguard the legitimate rights and interests of Jingye and other Chinese companies as well as global investors”.
The government previously tried to negotiate a commercial sale with Jingye but failed to strike a deal, according to reports. A National Audit Office report noted that British Steel is now costing the government about £1.3m a day. The plant recently secured major contracts to build a railway in Turkey.
The DBT spokesperson added: “Revitalising our steel sector is a top priority for this country, and the Steel Industry Bill is the first step to securing our steelmaking capability which will allow us to secure the future of British Steel and explore possible options to modernise the industry.”