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The company that owns Newport steel works is about to announce a major investment in renewable energy sources according to reports.

The investment will be the first step towards a quadrupling of Liberty House’s steel making capacity, the Sunday Telegraph reported.

Liberty Steel’s parent company, the GFG Alliance, is this week expected to announce the first in a three-year programme of investments that will add up to £700m.

The group’s energy business Simec, which owns the Uskmouth power station near the Newport steel works, will this week announce a £35m investment in expanding its hydropower capacity at its aluminium plant at Lochaber, in the Scottish Highlands.

A further investment, in the acquisition of another renewable energy supplier, is also expected to be announced later in the week.

GFG is reported to be interested not only in buying renewable energy assets but also workers and managers with experience in bringing green energy sources into operation.

The company needs their skills to achieve its ambitious plans to expand steel production from 1.1 million tonnes at present to five million tonnes, equivalent to half Britain’s current steel prodution.

To achieve this Simec will need to be able to provide an additional 500 megawatts of energy to Liberty Steel. A new £170m wind farm in Scotland will be part of this programme.

Liberty's growth

The plans to quadruple steel production were announced by Liberty boss Sanjeev Gupta last week.

It comes after a major expansion programme already this past year which has seen the company spend around £1bn acquiring industrial and energy assets around the world, including Tata steel mills in England, Australian mining and steel business Arrium, Caparo Merchant Bar in the north of England, and automotive aluminium suppliers Amtek.

Liberty’s business plan is built around its green steel model, which involves recycling scrap steel rather than making it from ore, which requires using coal-powered blast furnaces.

Instead Liberty’s steel plants, like the Newport one, use electric arc furnaces. However, the massive increase in production planned will require a commensurate increase in its renewable energy production if Liberty wants to avoid relying on other energy sources.

The company already has around 500 megawatts of generating capacity under its control, including the biomass plant at Uskmouth, hydropower facilities in Scotland and biodiesel generators around the country.

GFG chief investment officer Jay Hambro told the Sunday Telegraph: “We have serious green power ambitions to achieve the green steel targets.”