Chinese steelmaker, Jingye Steel has warned that the UK government's full nationalisation of British Steel without fair compensation could deter international investment, as the company pursues legal avenues to recover what it says is at least £1 billion.

The warning came in a company statement issued August 25, five weeks after the UK government enacted emergency legislation to bring Jingye's British Steel assets entirely into state ownership in July, citing "public interest". The government has yet to respond to Jingye's latest statement.

"This is the minimum that is owed to a responsible enterprise, and more importantly, a necessary defence of the basic standards underpinning the international legal order," Jingye Steel said in the statement.

The nationalisation caps a five-year turnaround effort by the Chinese group. Jingye purchased British Steel in 2020 for approximately £70 million when the company stood on the brink of insolvency. Within one year, it ended nine consecutive years of losses. Over five years, Jingye invested more than £1.2 billion in upgrading production lines, restoring blast furnaces and bringing previously outsourced operations back in-house.

At its peak under Jingye's ownership, British Steel employed 4,887 workers and supported approximately 30,000 upstream and downstream jobs. The company paid a cumulative £1.02 billion in wages and pensions, alongside £180 million in taxes, despite challenges including the Covid-19 pandemic, Brexit, the Russia-Ukraine war and the energy crisis.

The UK government has previously stated that compensation would be determined by an independent valuation process, and that British Steel's commercial value is nil following an audit review. Jingye has indicated it will seek at least £1 billion to repay intercompany loans and recover investment. At the end of 2024, British Steel owed Jingye at least £960 million in intercompany loans.

UK government offers have reportedly fallen below £100 million. The government has also spent approximately £377 million on British Steel since January 2026, with costs expected to exceed £600 million by the end of June.

A compensation scheme is expected to be legislated in autumn 2026.

Jingye said it has initiated consultations under the China-UK bilateral investment treaty and reserved the right to seek international arbitration, though no formal lawsuit has been filed yet.

"The UK government's action of placing lawful foreign investment under state ownership through emergency legislation without prior consultation or compensation is inconsistent with the broad international consensus on compensation for expropriation," the company stated.

Jingye warned that such practices "may well have a long-term impact on global investor confidence in the UK's investment climate".