Dofasco raises dividend, makes capital changes

DOFASCO NEWS RELEASE

********************** Dofasco increases dividend and announces capital structure initiatives

Redemption of preferred shares; plans to pursue normal course issuer bid and medium term note program

HAMILTON, ON, Sept. 3 - Dofasco's Board of Directors today approved a 10% increase in the dividend payable on its common shares, to 33 cents per share per quarter from 30 cents per share per quarter.

The dividend is payable on October 1, 2004 for common shareholders of record as of September 15, 2004. "The dividend increase is consistent with our commitment to provide sustainable value to our shareholders," said Don Pether, President and CEO of Dofasco.

"Dofasco is one of the most consistently profitable steel producers in North America, with sustained revenue growth and a strong balance sheet.

We are pleased we can once again share our success directly with our shareholders." Dofasco also announced three initiatives related to its capital structure.

First, the Board of Directors approved the redemption of all of the Company's outstanding 4 3/4% Cumulative Redeemable Preferred Shares, Series A.

The Company also announced its intention to file a $300 million Medium Term Note program shelf prospectus, and its intention to put in place a Normal Course Issuer Bid for the repurchase of up to 3.8 million of the Company's common shares, in both cases subject to approval from regulatory authorities.

"These measures will maintain and enhance our competitive position and provide added flexibility in connection with future financing requirements," said Pether. The Company will redeem all of the Company's outstanding 4 3/4% Cumulative Redeemable Preferred Shares, Series A on October 15, 2004.

Registered holders of Series A Shares will receive $101 per share, together with the sum of $0.98 per share representing accrued and unpaid dividends up to the redemption date, being a total redemption price of $101.98 per share.

The Series A Shares will be de-listed from the Toronto Stock Exchange effective on the redemption date. Shares can be redeemed on or after the redemption date at the principal offices of CIBC Mellon Trust.

Dofasco will send a notice of redemption to holders of record of Series A Shares on September 15, 2004, together with a letter of transmittal.

Further details concerning the redemption procedure, including the addresses of CIBC Mellon offices, will be included in the notice of redemption. The Medium Term Note program will be filed by way of a shelf prospectus.

This provides Dofasco the flexibility of issuing up to $300 million of notes over a two-year period.

The proceeds from the program will be used for general corporate and working capital purposes, including the repayment of debt and funding of capital expenditures.

The establishment of the Medium Term Note program is subject to appointment of the dealers for the offering, completion of the formal documentation in consultation with the dealers and receipt of all required regulatory approvals.

Dofasco anticipates filing the short form shelf prospectus by the end of September. Subject to the approval of the Toronto Stock Exchange, Dofasco also intends to file a Normal Course Issuer Bid prior to the end of September, for the repurchase of its common shares.

Pursuant to the bid, Dofasco will be entitled to repurchase up to 3.8 million of its common shares (representing approximately 5% of the total 76,903,711 common shares outstanding as of August 31, 2004).

Dofasco may wish to purchase common shares pursuant to the bid from time to time for the purpose of returning value to the shareholders.

All purchases will be made through the facilities of the TSX, and the shares purchased under the bid will be cancelled. "All of these initiatives are consistent with Dofasco's commitment to the sustainable and prudent stewardship of the company," said Pether.

"We will continue to focus on the creation of shareholder value. The initiatives announced today will provide the financial flexibility to allow us to continue to pursue investments in innovation and growth to maintain and enhance our position as a leading North American steel company." Dofasco is a leading North American steel solutions provider.

Product lines include hot rolled, cold rolled, galvanized, Extragal(TM), Galvalume(TM) and tinplate flat rolled steels, as well as tubular products, laser welded blanks and Zyplex(TM), a proprietary laminate.

Dofasco's wide range of steel products is sold to customers in the automotive, construction, energy, manufacturing pipe and tube, appliance packaging and steel distribution industries. This News Release may contain forward-looking information with respect to Dofasco's operations and future financial results.

Actual results may differ from expected results for a variety of reasons including the factors discussed in the Management's Discussion and Analysis section of Dofasco's 2003 Annual Report and the Management's Discussion and Analysis for the First and Second Quarters of 2004.

This press release has been reviewed by the Audit Committee of Dofasco's Board of Directors.

**************************