ASTL News & Events

Algoma Steel Group announced that its wholly owned subsidiary, Algoma Steel Inc., has entered into a binding memorandum of understanding with Hanwha Ocean. Canada's future submarine program could soon be supported by Canadian steel, Canadian workers, and Canadian industrial expertise under a new long-term strategic arrangement. The two companies have entered into a binding Memorandum of Understanding to establish a long-term strategic arrangement with an aggregate potential value of $250M comprised of a cash contribution of $200M towards the potential development of a structural steel beam mill in Sault Ste. Marie, Ontario and anticipated purchases of Algoma products with an aggregate value of up to $50M for use in connection with its Canadian Patrol Submarine Project-related commitments, including submarine construction and the development of Maintenance, Repair and Overhaul infrastructure required to support the fleet throughout its operational lifecycle in Canada. The MOU is structured to support Hanwha Ocean's ability to satisfy its Industrial and Technological Benefits obligations in connection with the CPSP. The strategic arrangement is intended to strengthen Canada's domestic industrial base while supporting the long-term operational needs of the Royal Canadian Navy. If the contemplated beam mill project goes ahead, the operation would support the creation of new skilled, long-term Canadian jobs. The MOU is subject to Hanwha Ocean being awarded and entering into an effective contract under the CPSP and the execution of definitive agreements with Algoma. The MOU also provides that Algoma will be required to make annual payments to Hanwha Ocean for ten years following the commencement of operations of the beam facility equal to 3.0% of the net sales of the beam mill facility, subject to its financial performance.

Algoma Steel Group provided guidance for its quarter ended December 31, 2025. Total steel shipments for the quarter are expected to be in the range of 375,000-380,000 tons and adjusted EBITDA is expected to be in the range of (C$95M)-(C$105M). Rajat Marwah, CEO of Algoma, commented, "Our fourth-quarter results were in line with expectations, reflecting the continued impact of steel tariffs and the previously announced wind-down of our blast furnace operations, which are expected to conclude in the coming days. We are encouraged by the ongoing ramp-up of the first unit of our Electric Arc Furnace project, which is now operating 6 days per week, and we remain on schedule with the second unit. As we move toward completing our transition to EAF steelmaking during the current quarter, we continue to optimize our existing assets and advance discussions with potential partners to expand our finishing capabilities. This strategy is deliberately aligned with Canada's national interest-strengthening domestic steelmaking capacity, supporting critical infrastructure and defence supply chains, and reinforcing Canada's long-term industrial competitiveness."