Algoma Steel has entered into a preliminary agreement with an international shipbuilder that could lead to the establishment of a new structural steel beam mill in Sault Ste. Marie, Ontario, resulting in the creation of additional job opportunities. The company disclosed today that Hanwha Ocean, a South Korean firm, has committed to providing up to $345 million to Algoma Steel for the construction of the mill and the procurement of Algoma products.
The finalization of this agreement hinges on the outcome of South Korean companies securing a contract to construct a new fleet of submarines. This initiative aligns with the Canadian Patrol Submarine Project, a federal endeavor aiming to procure up to 12 new submarines to bolster long-term naval readiness and industrial autonomy.
Algoma Steel emphasizes that its partnership with Hanwha Ocean will fulfill the submarine project’s need for contractors to invest in Canada, as the program is set to be supported by Canadian steel and labor. This collaboration exemplifies Canada’s Buy Canadian policy in action, ensuring that construction and maintenance activities are based on domestic supply chains.
The possibility of establishing a steel beam mill in Sault Ste. Marie was initially discussed at the conclusion of 2025 when Industry Minister Mélanie Joly expressed the federal government’s willingness to offer financial assistance to Algoma Steel if the project came to fruition. At that time, she projected that a significant portion of the 1,000 steelworkers facing job losses in March could potentially be rehired through the new mill.
Out of the total commitment of $345 million from Hanwha Ocean, approximately $275 million is earmarked for the structural steel beam mill’s development, with the remaining funds allocated for Algoma products, as confirmed by the steel plant. Additionally, the memorandum of understanding stipulates that Algoma Steel will make annual payments to Hanwha Ocean for a decade once the beam facility commences operations, amounting to three percent of the facility’s net sales each year.