Algoma Steel has inked a preliminary agreement with an international shipbuilding company that may pave the way for the construction of a new structural steel beam mill in Sault Ste. Marie, Ontario, and the generation of fresh employment opportunities.
The company revealed today that Hanwha Ocean, a South Korea-based entity, has committed to providing Algoma Steel with a financial injection of up to $345 million for the establishment of the mill and the procurement of Algoma products.
The arrangement is contingent on South Korean firms securing a contract to construct a new fleet of submarines. This deal aligns with the Canadian Patrol Submarine Project, a government initiative seeking to acquire a maximum of 12 new submarines to support long-term naval readiness and industrial autonomy.
Algoma Steel emphasized that the partnership with Hanwha Ocean will fulfill the submarine project’s need for contractors to invest in Canada, as the program will be sustained by Canadian steel and labor. The release highlighted that this agreement exemplifies Canada’s commitment to its Buy Canadian policy by ensuring that construction and maintenance activities are rooted in domestic supply chains.
The potential establishment of a steel beam mill in Sault Ste. Marie was initially mentioned towards the end of 2025 when Industry Minister Mélanie Joly indicated that the federal government would extend financial backing to Algoma Steel should the project come to fruition. Joly estimated 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 $345 million pledged by Hanwha Ocean, approximately $275 million is earmarked for the development of the structural steel beam mill, with the remaining funds allocated towards Algoma products, as confirmed by the steel plant. The memorandum of understanding additionally outlines that Algoma Steel will make decade-long annual payments to Hanwha Ocean once the beam facility commences operations, amounting to three percent of the facility’s net sales.