Tata Steel confirms report on potential $3.26 billion Dutch government's support for IJmuiden factory; stocks rise 2.07%

Tata Steel Limited issued a clarification on June 6 regarding recent news articles suggesting that the Netherlands may provide up to $3.26 billion (€3 billion) to support the green transformation of its IJmuiden factory. 

The clarification followed reports by Bloomberg on June 5, 2024.

Tata Steel stocks were trading in the green, up 2.07 per cent at ₹172.70, on June 6, at 10:45 p.m., on the BSE.

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Bloomberg reported that Tata Steel's IJmuiden plant has been associated with significant health and environmental issues in the surrounding area. According to the Dutch National Institute for Public Health and the Environment, emissions from the plant have been linked to lower life expectancy, increased lung cancer risk, and higher asthma rates among children.

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Tata Steel confirmed that discussions with the Dutch Government regarding a decarbonization roadmap are ongoing. The Dutch Parliament recently mandated the government to negotiate potential support terms for Tata Steel Nederland's decarbonization proposal.

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The Dutch Government has formulated a detailed framework involving diligence, analysis, discussions, and negotiations with Tata Steel. This process is expected to span several months before concluding. The agreed terms will require approval from the Netherlands Parliament and Tata Steel's Board.

"Apart from the money we will put into our Green Steel plan ourselves, we will need government support, just like our competitors in Germany, Belgium, and France, to establish a European-level playing field as much as possible," said Tata Steel spokesman Peter van Boesschoten.

Despite media speculation, Tata Steel emphasized that drawing any conclusions at this stage is premature. The company remains committed to making accurate and timely disclosures in compliance with the Securities and Exchange Board of India (SEBI) Listing Regulations and its policy on determining materiality for disclosure.