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Algoma Steel’s electric arc furnace project taking shape

CEO said $703-million project on schedule for 2026 production
Construction of the electric arc furnace building at Algoma Steel (Company photo)

Heavy steel girders are arriving at Algoma Steel for ongoing construction of its electric arc furnace project. 

Algoma CEO Michael Garcia delivered a June 19 update to City of Sault Ste. Marie council on $703-million development, but not before reflecting on the death of a contractor with GFL Environmental who died last week at the plant.

The 120-year-old Sault Ste. Marie plate and sheet producer is constructing two new state-of-the-art electric-arc-furnaces (EAF) to replace its existing blast furnace and basic oxygen steelmaking operations. 

The “transformational” project is expected to reduce Algoma’s carbon emissions by approximately 70 per cent making the project among Canada’s lowest-cost-per-tonne of GHG (greenhouse gas) reduction.

The steelmaker recently took delivery of four massive 120-ton crane girders for the EAF melt shop, made of Algoma Steel plate but fabricated off-site.

Erection of the 25,000-square-foot melt shop, which will stand 165 feet (80 metres high), is well underway.

“It is fast becoming a newest landmark on the Sault’s skyline,” said Garcia.

The building will house both furnaces and two four-storey utility buildings. A full automated scrap yard will be located in a nearby building. 

Algoma’s building contractor, the Walters Group of Hamilton, has contracted SIS Manufacturing of the Sault to fabricate the rest of the structural beams and remaining girders.

Foundation work has started on the fume treatment plant, which will capture air and dust emissions from the steelmaking process into a dust silo where it will be disposed or recycled off-site. There will be a dedicated water treatment plant on the site as well.

Timeline-wise, Garcia said they are on schedule to begin commissioning the EAF operations in mid-2024 while the company operates in a “hybrid” transition mode to move away from its traditional basic oxygen steelmaking as more power becomes available on the provincial grid.

The first coke oven battery will be shut down in late 2024. Sometime in 2026, Algoma will be operating in full EAF mode and the company intends to shut down blast furnace operations and the remaining coke oven batteries.

Among the features of the Danieli-designed EAF are large doors which seal shut before the arcing process in order to reduce sound, sparks and dust particles. Heavy gauge steel and acoustic insulation is being designed into the building to further buffer the sound of the operation.

Garcia said Algoma is poised to become a North American leader in “green steel” production with a huge carbon deduction of up to three million tonnes in greenhouse gas emissions.

By way of community spinoffs, Garcia said 47 local suppliers are engaged in the project that’s amounted to $47.7 million in spending as of the end of December 2022. 

An estimated $220 million of the $703-million project budget has been spent, and the project has created 500 construction jobs. The building permits are valued at $150 million. 

Among Algoma’s 2,800 employees, Garcia said there will both job opportunities associated with the EAF and staff cuts once the transition is made. He said there have been discussions with impacted employees about “options and career pathways.”

He said Algoma will continue to recruit skilled trades and will invest in skills upgrading and apprenticeships. There are currently 47 apprentices on site across seven skilled trade categories.

On another capital project, Garcia said the plate mill modernization is in its second and final phase. The $135-million development, scheduled for completion at year’s end, will boost capacity from 350,000 tons a year to 700,000 tons, and deliver a more reliable and better product.

The Nasdaq and TSX-listed company releases its fourth quarter and full-year financial and production performance at the close of the business day on June 21.