Essar Steel Algoma

A massive investment is being announced at Essar Steel Algoma Friday.

The Sault Star has learned that Essar will be embarking upon a major five-year modernization plan with the assistance of the federal and provincial government.

It is expected to be announced Friday that the provincial government will give Essar Steel Algoma a $30-million grant for the project.

The federal government will provide a $30-million repayable loan to Essar from its Advanced Manufacturer's Fund for a $240-million modernization project.

The project will see various improvements at the steelmaker over the next several years, including the restart of the No. 6 blast furnace.

Reports that Prime Minister Stephen Harper is to be on hand for the announcement are not true, said Sault MP Bryan Hayes.

“It would be a real pleasant surprise for me if he did come up, but I don't believe that is happening,” Hayes said.

Media advisories state Federal Minister of State Gary Goodyear, responsible for the Federal Economic Development Agency for Southern Ontario, will be at the announcement.

Provincially, David Orazietti, Sault MPP and Minister of Government and Consumer Services and Michael Gravelle, Minister of Northern Development and Mines, will be in attendance.

This project is believed to be separate from the Essar Ports Algoma project.

Essar Steel will fund the remaining portion of the $180 million needed for the project.

The upgrade is designed to modernize operations, improve productivity, reduce costs and enhance the company's competitive position and market reach.

Earlier this year, Essar Steel Algoma asked city council for $1 million to put towards the upgrades at the steel plant, arguing the money would be a good investment to protect existing jobs and possibly create as many as another 200 jobs.

The request was referred to staff to determine if it met the criteria of the diversification fund.

Last fall, The Ontario Superior Court approved Essar Steel Algoma Inc.'s recapitalization and refinancing plan designed to provide substantial equity infusion and refinancing of the company's capital structure.

The plan provided Algoma with a near-term capital infusion from Essar Global Fund Ltd of up to US$100 million to ensure the appropriate liquidity required to complete scheduled capital improvements and to allow for the seasonal raw material build