The contract will see British Steel supplying a minimum of 337,000 tonnes of long and short rail in the UK over the next 5 years
British Steel has secured a £500 million contract with Network Rail, guaranteeing the supply of more than 337,000 tonnes of track over five years in a deal that is being hailed as a major victory for UK manufacturing and a critical boost for the struggling Scunthorpe steelworks.
The agreement is the first major public procurement contract signed since the UK government intervened in April to prevent the closure of the site’s blast furnaces. The Scunthorpe plant, the last in Britain to produce so-called virgin steel, employs around 2,700 people and has been under threat since Jingye Group, its Chinese owner, signalled plans to shut down steelmaking operations. Two of the plant’s four blast furnaces remain operational.
The government invoked emergency powers earlier this year to halt the shutdown, a move that involved recalling Parliament to pass fast-track legislation safeguarding the site. Now, ministers say the five-year deal with Network Rail not only ensures continuity of steel production but also represents a strategic win for national infrastructure and industrial resilience.
British Steel will provide 80% of Network Rail’s track needs, with the remainder sourced from European suppliers specialising in niche products. The contract formally begins on 1 July. “This landmark contract truly transforms the outlook for British Steel and its dedicated workforce in Scunthorpe,” said Transport Secretary Heidi Alexander during a visit to the historic plant on Monday. “After taking urgent action to step in and save these historic blast furnaces from closure, we’ve now helped secure their long-term future.”
Network Rail, which owns and maintains the country’s railway infrastructure, said the decision reflects its commitment to sourcing materials domestically “where it makes economic sense to do so.”
Clive Berrington, Network Rail’s Group Director for Railway Business Services, noted, “British Steel remains extremely competitive in the provision of rail and we are delighted they will remain our main supplier in the years ahead.”
The government’s April intervention followed the breakdown of talks with Jingye, which had reportedly rejected a £500 million co-investment offer and was pushing ahead with plans to end primary steelmaking at Scunthorpe. Without functioning blast furnaces, the UK would lose the capacity to produce virgin steel — a critical component for major infrastructure such as bridges, railways, and defence assets — because restarting mothballed furnaces is technically difficult and prohibitively costly.
Scunthorpe’s plant has been forging rail since 1865, with its blast furnaces named after English queens — Bess, Mary, Anne, and Victoria. Only Bess and Anne are currently active, and the facility has come to symbolise the fight to retain core industrial capabilities on British soil.
Monday’s contract is not only a reprieve for Scunthorpe but a key step in the government’s broader industrial strategy. It builds on the £2.5 billion UK Steel Fund and dovetails with the new national infrastructure plan set to be unveiled later this week. Officials say the steel deal underpins their “Plan for Change” agenda to revitalise regional economies and raise living standards through domestic manufacturing.
“This is great news for British Steel and a vote of confidence in the UK’s expertise in steelmaking,” said Business Secretary Jonathan Reynolds. “Following our decisive action to step in and save steelmaking at Scunthorpe in April, this contract gives the sector the security to supply the steel we need for the infrastructure of the future.”
British Steel’s Commercial Director for Rail, Craig Harvey, described the deal as a “ringing endorsement” of UK industry. “This long-term agreement demonstrates British Steel’s importance to the UK’s economy and infrastructure,” he said. The timing of the deal also strengthens the UK’s trade positioning. It follows a recent agreement with the United States to reduce tariffs on British steel and aluminium, insulating British producers from punitive duties introduced under President Donald Trump’s executive order, which doubled US steel tariffs from 25% to 50%.
However, the exemption is temporary and conditional on the UK-US trade pact coming into full force — a reminder that the sector’s long-term stability is tied to both domestic policy and global diplomacy. For now, though, Scunthorpe’s future appears to be back on track, with steel from the town once again forming the backbone of Britain’s railways and industrial pride.
