UPDATE 3-China's Jingye Group in talks to rescue British Steel

China's Jingye Group is in talks to buy British Steel, it said on Monday, in a deal estimated to be worth up to 70 million pounds that could protect thousands of British jobs and end prolonged uncertainty over the future of the troubled steelmaker.

Any agreement would be of major political significance in Britain as it prepares to elect a new government on Dec. 12. The lack of opportunities in northern England, where British Steel is based, is an election issue, as the social gap between north and south widens. A deal to acquire Britain's second-largest steel producer has not been finalised, Hebei-based Jingye Group told Reuters following a BBC report of an imminent 70 million pound ($90 million) agreement.

Sources close to the talks said the value was likely closer to 50 million pounds than 70 million. A takeover could end prolonged uncertainty over the fate of the company, which was put into compulsory liquidation in May after Greybull Capital, which bought it for one pound from Tata Steel three years ago, failed to secure funding to continue its operations.

Its closure would impact 5,000 jobs in Scunthorpe and a further 20,000 jobs in the supply chain. British Steel, which makes high-margin, long steel products used in construction and rail, would give Jingye access to Europe's large infrastructure market.

But it would face big challenges with Europe awash with steel and producers struggling with costly green taxes as well as high energy and labor costs and business rates. The UK government has agreed to provide loan guarantees and other financial support, the BBC reported.

Gareth Stace, director-general of industry lobby group UK Steel, said any agreement was an outline. "I would be surprised if it did not get finalized," he said. "But it's not a done deal."

British commodities tycoon Sanjeev Gupta's Liberty Steel Group has also expressed interest in buying British Steel. Gupta has declined to comment on British Steel.

A spokeswoman for Jingye, a private company, said she was unclear about the value or timing of a deal. British Steel was not available for comment.

EMBRACE CHINA Henri Murison, director of the Northern Powerhouse Partnership, set up to boost the economy in the north of England, said a rescue would be "very welcome news".

He said it was time to embrace cooperation with China, which is extending its international reach through its Belt and Road global development strategy. Chinese companies also own a steel plant in Serbia and its sole copper mine. Leading trade union Unite welcomed the prospect of Chinese ownership, but cautioned there had been "a series of false dawns" for the company.

Unite Assistant General Secretary Steve Turner said the union wanted an urgent meeting with Jingye to establish what commitments will be made to the workforce and its proposals for long-term investment. The operations need a major overhaul and Jingye, which also operates hotels and real estate, employs 23,500 and have registered capital of 39 billion yuan ($5.58 billion), has the financial clout to invest, industry sources say.

But Chinese ownership may be contentious, especially in the steel industry. The European Union, which does not include Serbia, has agreed on safeguards to protect its own steel industry from competition from cheap imports from China and elsewhere. Tough regulatory standards also make it tough to find buyers for European steel assets.

John Cullen, the business recovery partner at accountancy firm Menzies LLP, said selling the whole business "in the current trading climate would be no mean feat". Leading steelmaker ArcelorMittal wants to walk away from its plan to buy Europe's largest steel plant Ilva in Italy after Rome scrapped guarantees of legal immunity during a massive clean-up operation.

($1 = 0.7815 pounds) ($1 = 6.9941 Chinese yuan renminbi)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)