Algoma Steel's board of directors have given the go-ahead to begin construction of two electric-arc furnaces.
This is a $700-million investment and will transform the way the Sault Ste. Marie steel producer makes its plate and sheet in eventually shifting from burning coal through its existing blast furnace and basic oxygen operations to electric furnace production.
It will cut the 120-year-old company's carbon emissons by 70-per cent, the company said in a news release, placing this project among Canada's highest impact investments in terms of cutting greenhouse gas emissions.
Algoma anticipates a 30-month construction phase.The furnaces come online in 2024.
Once the furnaces are commissioned it will give Algoma an annual raw steel production of 3.7 million tons, enough to match its downstream finishing capacity.
The company said these improvements also include a new vacuum degassing capacity. This is a treatment used to reduce the dissolve gas content - like hydrogen, oxygen, nitrogen - of the steel to enhance its capacities. Algoma said this will expand itss offering of steel plate grades.
“We believe that today’s strategic decision to transition Algoma to electric arc steelmaking represents a win for all of our stakeholders," said Algoma CEO Michael McQuade in a statement.
"It is designed to transform Algoma into a more agile and profitable company, positioned for long-term growth as an economic driver and employer of choice in our community."
“The board’s decision recognizes that Algoma’s sustainability and Canada’s path to net zero carbon emissions are aligned. You cannot get to net zero without steel, and in becoming a leading provider of green steel in North America, Algoma intends to be part of the solution.”
Andrew Harshaw, Algoma's board chair called the decision the result of two years' worth of "hard work and decisive actions."
“As a board, we have a duty to carefully evaluate investments that may benefit long-term growth and create value. We believe that we have done so and are confident about the significant benefits that this transformation is expected to bring for the Company and its stakeholders. I congratulate Mike and the whole Algoma team for arriving at this exciting milestone.”
The steelmaker said it is engaging with employees, community leaders, suppliers, and union representatives, while also partnering with regional academia to provide new skills training to Algoma’s current employees and to build new careers for local youth in science, technology, engineering and mathematics (STEM) subjects and the trades for future advanced manufacturing jobs.