Insurers make final payout for 2024 Algoma Steel structural collapse

Steel News  |  2026-08-03 00:32:45   |   By

Rajat Marwah, Algoma's chief executive officer, told an investor teleconference on Wednesday that the first steel production from its second electric arc furnace is expected during the next third quarter, before the end of September.

SEATTLE (Scrap Monster): Algoma Steel's insurers have paid out $145 million after the 2024 collapse of support infrastructure at Algoma Steel's coke-making plant.

'The company and its insurers have reached a full and final settlement of $145 million, net of applicable deductibles,' the steelmaker said in a news release.

That's considerably higher than the initial $100-million estimate.

Rajat Marwah, Algoma's chief executive officer, told an investor teleconference on Wednesday that the first steel production from its second electric arc furnace is expected during the next third quarter, before the end of September.

The following are excerpts from documents filed this past week to securities regulators:

On January 20, 2024, a structural corridor carrying various utilities crucial for the company's coke oven battery and blast furnace operations suffered an unexpected collapse.

An independent investigation revealed an unforeseen escalating overload condition, resulting in a failure of a structural support member of the utility corridor, thereby causing the subsequent cascading collapse of other support structures.

The collapse disrupted the flow of coke oven gas from the batteries to the rest of the steelworks, as well as a portion of the natural gas and oxygen flow to specific facilities, most critically the blast furnace.

The unforeseen structural collapse did not result in any injuries, but for safety reasons, various areas near the collapse were evacuated and blast furnace operations were suspended at the time of the incident.

Due to the unexpected shutdown and delayed restart, the blast furnace experienced operational challenges culminating in a chilled hearth, which suspended production for a period of three weeks, during which roughly 150,000 tons of hot metal production was lost.

The company and its insurers have reached a full and final settlement of $145 million, net of applicable deductibles, of which $45 million was recognized in other income during the six-month period ended June 30, 2026 in the condensed interim consolidated statements of net loss.

During the six-month period ended June 30, 2025, the company recognized insurance proceeds of $50 million, which were also presented in other income in the condensed interim consolidated statements of net loss.

The second quarter of 2026 was the second full quarter in which all liquid steel production was sourced entirely from the company's electric arc furnace (EAF) facility.

Ramp-up activities continue to progress in line with expectations.

The Unit One EAF furnace and associated melt shop assets are performing as designed, with quality metrics achieved across a range of plate and hot-rolled coil
product grades, and operations continue on a full 24-hour-per-day schedule.

Construction activities on the second EAF unit are
nearing completion, with first steel production expected in the third quarter of 2026.

As Canada’s only producer of discrete plate, the company holds a unique competitive position in this segment.

Plate demand from infrastructure, construction, and defence end-markets remained healthy during the quarter, supporting a second consecutive quarter of record plate sales, and the company expects plate production to continue to increase as the EAF ramp-up progresses through 2026.

Following completion of the EAF transformation, Algoma’s facility is expected to have an annual raw steel production capacity of approximately 3.7 million tons and is projected to reduce annual carbon emissions by approximately 70 per cent from pre-EAF levels. 

Courtesy: www.sootoday.com