Algoma Steel announces investment decision for electric arc steelmaking
Algoma Steel Group Inc. announced the authorization to construct two electric-arc-furnaces (EAF) to replace its existing blast furnace and basic oxygen steelmaking operations.
The transformation is expected to reduce Algoma’s carbon emissions by approximately 70 per cent.
Following the transformation to EAF steelmaking, Algoma’s facility is anticipated to have an annual raw steel production capacity of approximately 3.7 million tons, matched to Algoma’s downstream finishing capacity, and is also anticipated to include new vacuum degassing capability to expand Algoma’s 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. 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. Once complete, it is projected to deliver three million tonnes of annual CO2 reduction, placing the project among the highest impact investments in greenhouse gas reduction in Canada,” said Michael McQuade, Chief Executive Officer, Algoma. “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.”
The Company believes this planned growth investment will provide a number of key competitive and strategic advantages:
- Lower conversion cost structure more correlated to market pricing drivers
- Lower carbon tax liabilities
- Lower sustaining capital investments
- Flexible production, scalable to market conditions
- Reduced single furnace risk through dual furnace strategy
- Enhanced product quality and diversification
- Positions Algoma as an attractive Environmental, Social, and Governance (ESG) investment