(Yicai) June 12 -- Jingye Group, China's private steelmaker, is seeking compensation from the United Kingdom for its investment losses related to the nationalization of its subsidiary British Steel.

Jingye has recently initiated consultations with the UK government under the China-UK bilateral investment treaty, seeking compensation for the losses incurred after the UK government took control of British steel from its Chinese owner, Jingye announced on its official WeChat account yesterday.

In April last year, the UK seized control of British Steel's operations from Jingye through the Steel Industry Special Measures Act 2025, which sets the goal of achieving net zero emissions for companies using iron ore to produce steel by 2035. Last month, UK Prime Minister Keir Starmer unveiled plans to fully nationalize the company.

British Steel is the second-largest steel company in the UK, with a history of over 150 years and a production capacity of 4.5 million tons.

Jingye formally acquired British Steel in March 2020 for between GBP53 million and GBP70 million (USD71.1 million and USD93.9 million), marking the second steel acquisition by a Chinese company in the West. At that time, Jingye retained over 3,200 jobs and committed to investing GBP1.2 billion (USD1.6 billion) over the following decade to upgrade and modernize British Steel's equipment.

The company has continuously invested substantial funds in British Steel over the past five years to upgrade and modernize old equipment, ensure salary payments, and fulfill tax obligations, creating tens of thousands of jobs, Jingye noted in yesterday's statement, without revealing the specific investment amount.

In response to the Steel Industry Special Measures Act 2025, Jingye has independently invested funds to promote the green transition of British Steel, even before the promised government support funds were in place. But that was not enough, as the UK government still took control of British Steel.

"In recent years, there has been an increasing number of overseas acquisitions by Chinese steel companies," Ge Xin, deputy director of the Lange Steel Information Research Center, told Yicai. "While efforts have been made to ensure legality and compliance during these acquisitions, they still often encounter obstacles under the pretext of national security."

This serves as a reminder for domestic steel enterprises to develop more contingency plans and to protect their rights through legal means under international regulations, Ge noted.

China's Ministry of Commerce said on May 14 that any actions taken by the UK government should fully consider the significant investments made by Jingye in British Steel and its contribution to the UK economy and society, respect the wishes of the company and market principles, avoid the misuse of administrative coercion, and actively seek fair and reasonable solutions that are acceptable to both parties.

The Chinese side will closely monitor the developments of the situation and take strong measures to protect the legitimate rights and interests of Chinese enterprises, the ministry added.

Editor: Futura Costaglione