Essar Steel Algoma eyes restart for second blast furnace (update)

Editor's note: This story has been corrected to indicate Essar Steel Algoma's refinancing process is currently underway.

The company says the decision to start its backup blast furnace would be made based on “market conditions and availability of capital” but notes that a restart would allow it to capitalize on “new product and marketing opportunities, while further improving its competitive cost per ton position.”

A restart of the company’s No. 6 blast furnace would increase hot metal production by one million tons and add “upwards of” 200 new jobs at the plant.

Blast furnace No. 7, currently the local steelmaker’s only operational blast furnace, has a capacity of 2.8 million tons.

Essar Steel Algoma has long had big plans for its No 6 blast furnace.

Idle for more than a decade, the smaller secondary blast furnace was restarted briefly in 2008 after a $40-million rebuild.

The company touted the move as part of a planned expansion of its capacity to four million saleable tons.

But it was idled again as the economic downturn affected demand for steel.

Essar Steel Algoma is in the midst of a refinancing deal and the company’s CEO, Kalyan Ghosh was quoted today by the Economic Times in India as touting the Sault plant as “a new Algoma.”

The article, which describes a turnaround at the local facility in the six years since it was purchased by Essar Group for $1.8 billion, cites cost-cutting measures - including a reduction in staff and a renegotiated iron ore contract - along with productivity improvements and recent refinancing efforts.

#6 blast furnace start-up planned for tonight