Jingye seeks compensation as UK weighs payout for British Steel takeover

Jingye’s bid for compensation has turned the British Steel takeover into a much larger test case: how far the UK will go in nationalising a strategic industry, and how much protection foreign investors can still expect when ministers invoke national security. The fight over Scunthorpe, home to the UK’s last two blast furnaces, now sits at the collision point of industrial policy, treaty law and a fraught relationship with China.

The Chinese owner has formally begun consultation procedures under the China-UK bilateral investment treaty, seeking payment after the government moved to take control of the steelworks. UK ministers have signalled they may limit or refuse any payout, arguing that Jingye’s shares in British Steel are worthless and that the state does not intend to pay to acquire them. Officials are also weighing a far lower settlement than the sum Jingye is said to want, with the final figure potentially left to an independent valuer or the courts.

The takeover followed an emergency intervention in April 2025, when ministers used special powers to stop the blast furnaces shutting down. Parliament fast-tracked the Steel Industry (Special Measures) Act 2025 on 12 April 2025, giving the government the authority to protect steelmaking, jobs, national security and supply chains at the Lincolnshire site. By 14 May 2026, the government had already provided £484 million in working capital to keep British Steel running.

Jingye bought British Steel in March 2020 for £70 million and says it has since invested about £1.2 billion in the business. The company had been preparing to close the furnaces and had sought state support to move the plant toward greener steelmaking before the government stepped in. In June 2025, Jingye hired Linklaters to explore ways to recover hundreds of millions of pounds it said it had put into the company.

The dispute is made more combustible by British Steel’s balance sheet, which has been reported to carry close to £1 billion in debts, much of it owed to Jingye through inter-company loans. Current reporting says the company may be seeking more than £1 billion in compensation, while officials in London are considering a settlement that could fall below £100 million. However it is resolved, the outcome will shape future claims from foreign owners in sectors the government deems strategically vital, and could add another strain to UK-China relations.