Algoma agreement opens door for EAF installation

Sault Ste. Marie, Ontario-based Algoma Steel Group Inc. has reached an agreement with the Canada Infrastructure Bank (CIB) with respect to the CIB’s previously announced commitment to finance the installation of electric arc furnace (EAF) steelmaking equipment.

Under the terms of the agreement, the CIB will provide up to $172 million in financing toward the approximately $550 million conversion from blast furnace and basic oxygen furnace (BOF) production to scrap-fed EAF steelmaking.

Earlier this month, Algoma’s board of directors authorized the construction of two new EAFs to replace Algoma’s existing BOF operations. Algoma signaled its intention to switch to EAF capacity in May when it was acquired by New York-based Legato Merger Corp., a special purpose acquisition company (SPAC).

Last month, Algoma entered into a joint venture known as ATM Metals Inc. with Ontario-based scrap processing firm Triple M Metals. The JV has been created to source prime ferrous scrap and other iron units to meet Algoma’s melt shop needs after it converts to EAF steelmaking.

According to Algoma, the CIB financing will enable it to purchase “state-of-the-art equipment to facilitate the EAF transformation, which is expected to cut greenhouse gas emissions by approximately 70 percent, representing more than 3 million metric tons per year by 2030.”