The City of Sault Ste. Marie, Ont., received an economic boost yesterday and a promise for an environmentally sustainable future. The government of Canada announced a commitment of up to $420 million in financial support to Algoma Steel in its quest to become to become the "greenest" flat-rolled steel producer in Canada. The investment will be used to retrofit the company’s operations and phase out coal-fired steelmaking processes at their facility in Sault Ste. Marie.
Prime Minister Justin Trudeau was on site along with the Minister of Innovation, Science and Industry François-Philippe Champagne, to make the announcement.
This funding will enable the company to purchase state-of-the-art equipment to support its transition to electric arc furnace steelmaking (EAF). This electricity-based process is expected to cut greenhouse gas (GHG) emissions by more than 3 million tonnes per year by 2030. This is equivalent to taking more than 900,000 passenger vehicles off the road – almost the number of passenger vehicles in Toronto.
The investment will support thousands of direct and indirect jobs in Sault Ste. Marie and the province of Ontario, and ensure green steel products are available for inclusion in automobiles, consumer products, and renewed infrastructure that utilizes Algoma steel.
"The 70% carbon reduction resulting from Algoma's proposed transformation to electric arc furnace technology represents one of the lowest cost-per-tonne opportunities to achieve large-scale sustainable GHG reductions in Canada,” said Algoma Steel CEO Michael McQuade. “The world can't get to net-zero without steel. The combination of an electric arc furnace with Ontario’s low-carbon electricity will give our customers and infrastructure investments a green steel advantage."
The financial commitment includes up to $200 million from the Innovation Science and Economic Development Canada's Strategic Innovation Fund through the Net Zero Accelerator to rapidly expedite decarbonization projects and accelerate Canada’s industrial transformation. Under an investment agreement in principle, the Canada Infrastructure Bank is committing a further $220 million towards the project. The funding will be provided over four years.
In May, the Canadian parent company of privately held Algoma Steel and Legato Merger Corp. (NASDAQ: LEGO) agreed to a definitive merger that will result in Algoma becoming a publicly listed company with its common shares traded on the Nasdaq Stock Market. Algoma also intends to apply to list its common shares on the Toronto Stock Exchange. The transaction is expected to close in the third quarter of 2021, subject to approvals.