As many as 3,000 jobs are set to be cut at Tata Steel and the company is set to close the two blast furnaces at Port Talbot in South Wales, BBC reported.
It said the company is looking at replacing the blast fornaces, which use iron ore to produce new steel, with a more modern eletric arc furnace. The new system will use scrap metal to produce usable steel.
The report added that last year the UK government had said it would support he £1.25 billion plan with as much as as £500 million public money.
Most of the job cuts are expected at Port Talbot, the report stated.
Tata Steel shares were trading 2.6% higher at 134.4 apiece at 1pm IST on January 19.
