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Ottawa invests $420M to transition Algoma Steel into electric arc technology

New technology will cut Sault Ste. Marie steelmaker's emissons by 70 per cent
20170511 Essar Steel Algoma KA 01
(Kenneth Armstrong/Village Media)

Algoma Steel's goal to become Canada's "greenest" flat-rolled steel producer resonates with Ottawa and Prime Minister Justin Trudeau to the tune of a $420-million federal investment in the Sault Ste. Marie steel sheet producer.

Trudeau was in Sault Ste Marie on July 5, accompanied by Innovation, Science and Industry Minister François Phillippe Champagne, to announce funding to help Algoma transition into electric arc furnace (EAF) steel production.

The breakdown in funding includes $200 million from the Innovation Science and Economic Development Canada's Strategic Innovation Fund (SIF) and $220 million from the Canada Infrastructure Bank. The funding will be spread over four years.

Seguing into electric arc technology has the potential to cut Algoma's carbon emission by 70- per cent, according to a company news release, making the project the lowest-cost-per-tonne of of greenhouse gas reduction in Canada.

"Having a commitment of this magnitude from the Government of Canada shows leadership towards a net-zero, climate-resilient Canada, and is so very important as we look to make our proposed transformation to EAF steelmaking a reality," said Algoma CEO Michael McQuade in a statement.

McQuade took Trudeau on a tour to show him the company's new No. 2 Ladle Metallurgy Furnace, commissioned last February, that's considered "another significant milestone in Algoma Steel's transformation journey."

Switching to electric arc furnaces will eventually phase out coal-fired steelmaking at the plant.

The move to electric arc furnaces by Algoma, falls in line with the Trudeau government's legislative move under Bill C-12 to achieve net-zero emissions by 2050 through rolling five-year emission targets. The bill received Royal Asset last month.

A news release from Sault MP Terry Sheehan said this money will create 500 construction and subcontracting jobs for the project. Seventy-five employees at Algoma, an employer of 2,600, will be trained for jobs in the STEM (science, technology, engineering, and mathematics) fields.

In a statement, Sheehan called his government's funding "the single largest" in the city's history.

"This historic investment will anchor Algoma Steel in the community for years to come, continuing to provide good middle-class jobs, while being a part of the solution for Canada to meet its climate goals."