Jingye Steel demands full compensation after UK nationalises British Steel, calling move 'outright robbery'

Nationalisation completed

The UK government took full ownership of British Steel on Thursday, completing a process that began last year when the plant's Chinese owner, Jingye Group, signalled it would close the Scunthorpe site. The Department for Business and Trade said the move would save thousands of jobs and protect a "vital national capability" for construction, rail and defence. The plant is the last in the UK capable of producing primary steel from raw materials. The nationalisation received Royal Assent on Wednesday, the final legislative step.

Jingye demands compensation

On Sunday, Jingye Steel issued a sharply worded statement accusing the UK of "trampling on international investment rules" and offering "almost zero compensation". The company said it would pursue "full compensation through legal means to the very end" and had initiated consultations under a bilateral investment agreement, reserving the right to international arbitration.

The UK disregarded Jingye's continuous investment and significant contribution and was only willing to provide almost zero compensation.

Jingye, which bought British Steel out of insolvency in 2020 for around £70 million, described the nationalisation as "outright robbery". It said it had invested in technology, paid taxes and created "tens of thousands of jobs" since the acquisition.

UK government's position

Business Secretary Peter Kyle framed the nationalisation as a safeguard for British industry.

British Steel now belongs to the British people and our focus is on the future: stabilising the business, backing the communities that rely on it and building a sustainable, competitive and decarbonised steel sector for the years ahead.

A government spokesperson said draft compensation regulations due in the autumn would establish a process where an independent assessor determines what, if any, compensation is payable. The government had already spent £377 million operating the plant by the end of January, a figure Jingye estimates will exceed £600 million by end of June and could reach £1.5 billion by 2028.

China warns of investment climate damage

Beijing quickly backed Jingye. The Ministry of Commerce expressed "strong dissatisfaction", accusing London of using national security as a pretext to seize the asset. The Foreign Ministry said the UK should "earnestly respect market principles and the spirit of contract" and find mutually acceptable solutions on compensation. It also warned that the episode would affect Chinese investors' perception of the UK's investment climate and the trustworthiness of its government. China said it would monitor developments and take appropriate measures to protect its firms' interests.

Political timing

The dispute lands just as Labour leader Andy Burnham is set to replace Keir Starmer as prime minister on Monday. The outgoing Starmer government had championed the nationalisation, with Starmer saying it "secured the future of British steel production, protected skilled jobs and safeguarded a vital national capability". Burnham will now inherit a standoff with one of the UK's largest trading partners.

Financial stakes

The Scunthorpe plant was losing £700,000 a day when Jingye launched a closure consultation in March 2025. The UK stepped in to prevent the permanent shutdown of the blast furnaces. Jingye's statement highlighted the mounting public cost, projecting that total taxpayer expenditure could surpass £1.5 billion by 2028.