It’s being billed as the largest joint funding announcement Northern Ontario has seen in decades and could be the first of its kind since the Second World War.
And its being hailed by Essar Steel Algoma executives as an investment that will take the steelmaker into the next century, increase its output and competitiveness in the global markets, and create jobs.
In more than one year of planning and negotiations, the federal and provincial governments have joined together to provide Essar Steel Algoma with $60 million for its $240 million modernization plan.
The money includes a $30 million interest-free loan from the federal government’s Advanced Manufacturing Fund and a $30 million grant from the province’s Ministry of Northern Development and Mines and Northern Ontario Heritage Fund Corp. The company has 10 years to repay the loan.
The money will be used namely for three projects defined in the Plant Optimization and Expansion project, said Kaylan Ghosh, CEO of Essar Steel Algoma.
It will allow the company to make state-of-the-art upgrades in the Direct Strip Production Complex to create a higher quality steel and improve processing speed by about 30% to create about three million short tons of steel annually.
It will also help Essar enhance its automation technology in the Plate and Strip Hot Mill Complex, to allow for increased productivity for years to come.
Also in the plans are the installation of a new steel refining station to increase research and development for the production of high-value advanced steel grades.
Ghosh said plans to restart the No. 6 blast furnace have been put on hold until the steel market industry improves.
Algoma’s products are used in the automotive, construction, energy, manufacturing, pipe and tube, and steel distribution industries.
The upgrades are to continue until 2022 and it’s anticipated that about 200 jobs will be added to the 2,500 employee roster and its $360 million annual payroll. Another 5,000 indirect jobs are also created as a result of Essar Steel Algoma.
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