Algoma Steel may have closed without the government loans: Garcia

SEATTLE (Scrap Monster): The following statement is from Michael Garcia, CEO, Algoma Steel:

Yesterday was an incredibly difficult day for Algoma Steel and for Sault Ste. Marie — most of all for the workers and their families who received four-month notice. Their stability and well-being remain foremost in our minds.

Any strong and sustainable business begins with fair, free, and competitive access to the markets and customers it serves. For Algoma Steel, that foundation was shattered six months ago with the unprecedented 50 per cent tariff imposed by the United States—effectively closing off a market that has been essential to our viability for generations, and rendering traditional blast-furnace steelmaking no longer viable.

This sudden loss of access forced a fundamental shift in our competitive reality. Algoma’s response is not simply to “pivot,” but to accelerate a strategy that has been years in the making: transforming Algoma into a lower-cost, more flexible, and more resilient steelmaker built for the future of the Canadian market.

That strategy starts with completing our transition to Electric Arc Furnace (EAF) steelmaking—moving to a modern process that dramatically lowers costs, increases flexibility, reduces carbon intensity, and strengthens our ability to serve domestic customers. But it does not stop there. We are also reshaping our product mix to better align with what Canada needs today, and in the decades to come, diversifying into higher-value grades and applications that support major national priorities.

As a consequence of the tariff shock and this required acceleration, Algoma has had to make the very difficult decision to conclude its long history as an integrated steelmaker and to close our blast furnace and coke-making operations in early 2026—one year earlier than we had anticipated or planned.

We recognized long before the tariffs that the EAF was essential to securing Algoma’s future. It modernizes our plant, broadens our product offering, and positions us as a global leader with access to new markets.

Without the opportunity to transition to the EAF, and the liquidity support provided by Large Enterprise Tariff Loan (LETL) from the Federal Government and Province of Ontario, make no mistake, Algoma Steel would have experienced an even darker day – months ago, most likely its last.

Ensuring the Pivot Succeeds

As we accelerate this transformation, government partnership will continue to play a vital role in ensuring the Pivot strategy succeeds. A strong Canadian steel industry requires a strong Canadian market—and recent actions by both the federal and provincial governments are helping build exactly that.

I want to commend the Prime Minister and his government for the continued support of Algoma Steel and the Canadian steel industry. We recognize his efforts to negotiate a better deal for Canadian industries over the long term, while introducing measures to not only protect but grow the domestic industry today. I would also like to acknowledge the unwavering commitment of Premier Ford and his government to our sector, and Algoma in particular.

Courtesy: www.sootoday.com