Steel Mills

Essar Steel Algoma Planning Capital Investments

January 12, 2015

Now that Essar Steel Algoma has its liquidity problems under control, the company is embarking on a CDN $350-$400 million investment plan in its steel mill located in Canada that will span the next 5 to 7 years.

The plan includes optimizing operating capability, enhancing product quality, modernizing production lines and expanding the company’s product mix to serve new and evolving markets, says Brenda Stenta, Manager of Corporate Communications for Essar Steel Algoma. The company will also invest in energy efficiency and environmental initiatives.

First on deck is repair of nine coke oven through walls on the No. 8 Coke Battery, scheduled to begin this spring. It will take approximately 12-18 months to complete the refractory repairs with a break during the winter months when temperatures are not suitable for refractory installation.

The second impending project, is the replacement of four of the hot blast stoves that service the No. 7 blast furnace. One will be replaced over each of the next four years since three are required to keep the furnace operational. The state-of-the art replacements, said Stenta, are more energy efficient, allowing higher blast temperature and working pressure. The result will be a fuel savings of $16.7 million per year after three of the four stoves are replaced.

The two projects described have a combined investment cost of CDN $123.5 million and are part of the overall investment plan for the company. “This modernization of our facility will mitigate risk and ensure our long-term operating reliability,” said Stenta.

Steel Market Update asked if there has been a decision to restart the No. 6 blast furnace.

“We are currently assessing the potential for startup of No. 6 blast furnace in 2015 subject to market conditions,” replied Stenta. “No decision at this time.”