The Chinese-owned Jingye Group has said it will seek "full compensation through legal means to the very end" after the British government nationalised British Steel, escalating a dispute that threatens to strain relations between London and Beijing just as a new prime minister prepares to take office.
“Full compensation through legal means to the very end.” — Jingye Group
The UK took control of the Scunthorpe steelworks a year ago after Jingye said it planned to close the site because it was not financially viable, and fully nationalised the plant on Thursday. Jingye bought the Lincolnshire steel plant in 2020, but in March last year launched a consultation on closure, saying the plant was losing seven hundred thousand pounds a day. The government took operational control in April 2025, though Jingye's ownership limited its ability to shape the firm's future until this week.
On Thursday the UK government said it was taking the firm into public hands to safeguard a "vital national capability," giving it the power to decide the plant's future. A government spokesman said draft compensation regulations due in the autumn will set out a process through which an independent assessor "would determine what, if any, is payable."
China's commerce ministry hit out at the nationalisation on Friday, saying it "firmly opposes and is strongly dissatisfied" and that the move "seriously infringed" upon Jingye's rights and interests while "severely undermining the confidence of Chinese companies investing in the UK." Beijing said it would support Chinese firms to protect their rights but did not detail what that might involve.
A UK government spokesman said on Friday that commercial negotiations with the Chinese steelmaker had failed to reach an agreement "that represented value to the taxpayer," adding that London "highly values our relationship with China and remains open to Chinese investment." The statement sought to balance a firm defence of the takeover with reassurance to other foreign investors.
The steelworks employs about two thousand seven hundred people and supports other industries in North Lincolnshire, but has faced years of uncertainty. In March the National Audit Office found it was costing the government about one point three million pounds a day to keep the plant running. Business Secretary Peter Kyle has said letting it close was not an option and the government will cover running costs "for the immediate future."
The independent assessor's ruling, expected after the autumn regulations, will set the price of the takeover — and the tone of UK-China commercial relations for years.
The compensation fight matters less for the money than for the precedent. If the independent assessor awards Jingye little or nothing, every state-adjacent Chinese investor in Europe will read it as confirmation that infrastructure stakes can be taken at political convenience — and price future investment accordingly. The £1.3m-a-day running cost, meanwhile, guarantees nationalisation is a bridge, not a destination: the real decision, electric-arc conversion or managed decline, is still ahead.
