(Yicai) June 12 -- Jingye Group is seeking compensation for investment losses after the UK government announced last month that it will legislate to fully nationalize British Steel, a subsidiary of the China's private steelmaker.

Jingye has initiated consultations with the UK government under the China-UK bilateral investment treaty, seeking recompense for its investment losses in British Steel, the Beijing-based company announced through 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. Prime Minister Keir Starmer’s government unveiled plans to fully nationalize the steelmaker on May 13.

British Steel is the second-largest steel mill in the United Kingdom, with a more than 150-year hostelry and the capacity to produce 4.5 million tons of the alloy.

Jingye 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 equipment, ensure salary payments, and fulfill tax obligations, creating tens of thousands of jobs, Jingye noted yesterday, without revealing the exact 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.

“In recent years, there’s 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 should be a reminder to domestic steel enterprises to prepare further contingency plans and to defend their rights through legal means under international law, Ge noted.

China's commerce ministry said on May 14 that any actions the UK government takes should fully take into account Jingye’s huge investment in British Steel and its contribution to the UK economy and society, respect the company’s wishes and market principles, avoid abusing administrative coercion, and actively seek fair and reasonable solutions that are acceptable to both parties.

China will closely follow developments and take strong measures to safeguard the legitimate rights and interests of Chinese companies, the ministry added.

Editor: Futura Costaglione