“We believe that today’s strategic decision to transition Algoma to electric arc steel fabrication represents a victory for all of our stakeholders. It is designed to transform Algoma into a more agile and profitable business, ”said Michael McQuade, CEO of Algoma in a press release.
“When complete, it is expected to result in an annual reduction of three million tonnes of CO2, placing the project among the highest impact greenhouse gas reduction investments in Canada,” said McQuade.
The statement said Algoma intends to invest approximately C $ 700 million in the transformation of EAF, funded by previously announced funding commitments and the proceeds of the company’s recently completed merger. It provides for a 30-month construction phase for the EAF facility, which will be commissioned in 2024.
The Company believes that this planned growth investment will provide a number of key competitive and strategic advantages:
- Lower conversion cost structure more correlated to market price factors
- Lowering the carbon tax liability
- Less investment in sustaining capital
- Flexible production, scalable to market conditions
- Reduced Single Oven Risk Using Double Oven Strategy
- Improved product quality and diversification
- Positions Algoma as an attractive environmental, social and governance (ESG) investment.