Algoma Steel announces final Investment decision for electric arc steelmaking

Algoma Steel (NASDAQ: ASTL; TSX: ASTL) announced that the board of directors has given its authorization to build two new state-of-the-art 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 percent.

“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,” said Michael McQuade, Algoma’s Chief Executive Officer in a press release.

“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 McQuade.

The release says Algoma plans to invest approximately CDN$700 million in the EAF transformation, funded with previously announced financing commitments and the proceeds related to the Company’s recently completed merger. It anticipates a 30-month construction phase for the EAF facility, coming online in 2024.

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.