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Algoma Steel has notified workers whose jobs will be lost to electric arc furnace

CEO Michael Garcia would not discuss specific numbers, but he told city council that impacted employees have been informed and some are already re-training for new roles
Michael Garcia, CEO of Algoma Steel, offers an update on his company's electric arc furnace project during a meeting of city council on Monday.

Algoma Steel CEO Michael Garcia told city council on Monday that all workers whose jobs will be impacted, or could be impacted, when the company’s electric arc furnaces come online have been officially informed — and a number of them are already being retrained for new roles.

When asked by media after his presentation, Garcia was shy about exactly how many of the company’s 2,800 current employees will be impacted when the transition to electric arc furnace (EAF) is complete and the final coke oven is shut down, as early as 2026.

“Not a discrete number and it’s going to happen over many years,” Garcia told reporters after his appearance at city council. “The final steps of this could be happening in 2029, so we don’t have the exact number because our current number will change over the time during this period.”

While construction is ongoing, Algoma Steel is still in hiring mode, with 43 apprentices currently in training.

“A fair number of those 43 apprentices we have come from our own employee base,” said Garcia. “So that would be an example of an employee who in the future may be working in a job that is impacted by electric arc furnace transformation and they may transition to an apprentice program and end up filling as a qualified tradesperson at the company at the end of that apprenticeship program.

“There will always be a demand for certain skilled trades and where apprenticeships and up-skilling makes sense will make that investment in our people,” Garcia said to council.

Construction is well underway on the EAF project, with work continuing on the 50-metre tall, 25,000 square foot melt shop.

“It is fast becoming the newest landmark on the Sault’s skyline,” Garcia said.

That building will eventually house the two electric arc furnaces.

Garcia said 47 local businesses are working on the project, with a total community spend of $47.7 million as of Dec. 31, 2022. About 500 construction jobs are expected to be created over the course of the EAF project and so far the company has pulled $150 million worth of building permits.

As part of the construction, Algoma Steel has worked in plans for what Garcia called "superior noise protection."

“It is extremely uncommon to have this level of noise abatement included in an electric arc steelmaking facility,” he said.

The first electric arc furnace is expected to come online in mid-2024.

“While the transformation is underway, Algoma will operate in a hybrid mode, transitioning away from basic oxygen steelmaking as more electric power becomes available on the Ontario grid,” said Garcia.

The company is expected to shut down its first coke battery in late 2024 and is aiming to complete the transition sometime after 2026.

“At this time we will shut down our blast furnace and our remaining coke batteries,” said Garcia. “We are primed to become the first integrated steel producer in Canada to fully transition to electric arc steelmaking and completely shut down legacy blast furnace and coke-making operations.”

Garcia said the project is currently the largest industrial carbon reduction project in Canada. When completed, it is expected to reduce the company’s greenhouse gas emissions by 70 per cent, or about 3 million tons per year.

“When paired with the Ontario power grid, which is over 90 percent carbon free, we will position Algoma and Sault Ste. Marie as one of the largest producers of green steel in North America,” he said.

Garcia told media there will be an update on the project's budget and schedule as part of the company's upcoming earnings report.

"Up to that announcement, we have consistently, thankfully through all of 2022, been able to keep the project on time and on budget," said Garcia.

A $135-million plate mill modernization project is also in its final phase. When complete, it is expected to more than double the current plate capacity and increase the quality of the product produced, while also offering direct ship capability.

In response to the update, Mayor Matthew Shoemaker said it is an exciting project.

“We look forward to not only the investments in our community, but the benefits that are going to come from that investment with the reduction in greenhouse gases and especially to placing anyone who might otherwise be displaced by the changes at Algoma Steel, thank you for your commitment on that,” said Shoemaker.

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Kenneth Armstrong

About the Author: Kenneth Armstrong

Kenneth Armstrong is a news reporter and photojournalist who regularly covers municipal government, business and politics and photographs events, sports and features.
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