Algoma Steel secures Canadian government support

Sault Ste. Marie, Ontario-based Algoma Steel Group Inc. has signed agreements to secure CA$500 million ($359 million) in liquidity support designed to help the recycled-content steelmaker cope with prolonged trade uncertainty.

The loan facilities have been set up by the Canadian government ($287 million) and the province of Ontario ($72 million) to help Algoma navigate trade issues, in particular with the United States, that have arisen shortly after it invested to invest in recycled-content electric arc furnace (EAF) steelmaking technology.

Algoma CEO Michael Garcia and its chief financial officer Rajat Marwah have taken part in a signing ceremony for the loans with several Canadian and Ontario government officials.

“On behalf of Algoma, I would like to thank Prime Minister [Mark] Carney, [Ontario] Premier [Doug] Ford and their governments for their steadfast support of our company and the Canadian steel industry,” Garcia at said the event. “The ongoing imposition of a 50 percent tariff on Canadian steel has closed the U.S. market to Canadian steelmakers. We require this liquidity support to withstand this unprecedented U.S. governmental action, and importantly, to continue our transformation for the future.

“Algoma is poised to be a critical contributor to our nation’s agenda of building a stronger, more competitive, and prosperous economy. We look forward to supplying Canadian steel, from right here in Sault Ste. Marie, to, as the prime minister has said, help protect our sovereignty, grow our industries, export our energy and build one strong Canadian economy.”

Along with securing the financing, Algoma says it is adjusting production to better align with prevailing demand and market dynamics, noting that the continuation of Section 232 tariffs has been “undermining Algoma’s cross-border business model and requiring the company to focus on products with reliable domestic demand.”

The tariffs also have made continued operation of the company’s blast furnace and coke ovens unsustainable, according to Algoma, which says it will begin to exit those operations as it accelerates its transition to EAF steelmaking.

The company now expects the final price tag on its EAF project to be CA$987 million ($709 million).

Algoma intends to focus production on as-rolled and heat-treated plate, along with select coil products sold predominantly for the Canadian market.

“The government’s financial support underscores their recognition of Algoma’s critical role in Canada’s industrial base and demonstrates their willingness to provide direct support for our company through this transition,” Garcia said.

“By combining essential liquidity with targeted support for our transition to EAF steelmaking, this support allows us to move forward with confidence, aligning operations with market realities, advancing the EAF strategy and safeguarding Algoma’s future,” Marwah added.