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British Steel has said it is planning to close its coking ovens in Scunthorpe which could result in the loss of up to 260 jobs.
The firm blamed an "unprecedented rise" in running costs, inflation and the need to make its operations greener.
The steelworkers' union said any cuts could have a "catastrophic impact" on steel production across the UK.
Coking ovens turn coal into coke which burns at the higher temperature needed for blast furnaces to make steel.
The closure of the ovens, which means British Steel will import coke, has been seen as a concerning indicator about the health and future of the UK steel industry.
British Steel said the company had seen its bills for energy and carbon increase by £190m last year, alongside an "unprecedented rise in operating costs, surging inflation and the need to improve environmental performance".
As a result it said "decisive action" was needed.
Alun Davies, national officer of the Community Trade Union, which represents steelworkers, said the union would "not accept redundancies" and added "nothing is off the table when it comes to protecting our members' jobs".
"British Steel's plan to close the coke ovens could have a catastrophic impact on jobs and steel production at Scunthorpe and the UK as a whole," he added.