Union supports unknown 'entity'

United Steelworkers Local 2251 has overwhelmingly ratified a support agreement for a new entity interested in acquiring the assets of Essar Steel Algoma Inc.

The 'entity' is not the group of term lenders who have been working to acquire the Sault Ste. Marie steel mill, confirmed Local 2251 president Mike DaPrat.

The members voted 98.6% in favour of the support agreement, he said.

DaPrat said union members received the information and accepted the committee's recommendation to support the agreement.

He would not say who the entity is, whether that entity is working with the term lender group or another party, citing the gag order imposed by the courts.

“I will just say that it is another party, separate of the term lenders,” DaPrat said.

Local 2724 President Lisa Dale, who represents the salaried workers, is away this week and cannot be reached for comment however that local has not had any meetings with its membership at this point in time, The Sault Star was told.

DaPrat would not say where negotiations or mediated talks are with the term lender group.

He said he can't release any information on what is occurring in those talks as a result of the gag order the union is under from Ontario Court Justice Frank Newbould.

On March 6, Newbould signed an order preventing the union from discussing the negotiations in the media or public. The order, he later clarified, does allow the negotiating team the ability to report back to its membership only.

In his ruling, Newbould said “the mediation is to be held in private, without any public pronouncements or discussion of any nature or kind by any person.”

DaPrat said he would abide by that order and is not willing to break it and risk going to jail.

Now, he said, it's business as usual for the union and its members.

“We wait and see if the entity is let in and we're very hopeful. It's up to the court to decide what's next.”

In the past, the USW has supported efforts by Essar Steel to enter into the process, but those moves have not been approved or welcomed by the court.

In February, the court received a Monitor's Report that said the existing sale transaction underway with the term lenders is the only viable transaction available to the steelmaker.

At that time, the court was also told that no other lenders have stepped forward to provide a DIP financing commitment since the initial solicitation for DIP financing in October 2015.

The court was also told that Essar Global failed to meet the financial qualifications in the first phase of the bidding process.

As of Tuesday morning, there are no motions filed that identify any other party interested in acquiring the assets of Essar Steel Algoma Inc.

Essar Steel Algoma was granted another stay until April 30 to complete negotiations with unionized members and complete the restructuring process.

Essar Steel Algoma filed for CCAA protection in November 2015.

A sale and investment solicitation process began in February 2016 and a further extension of the DIP facilities was approved on Jan. 31, 2017 to a March 31 extension day.

When Essar Steel Algoma filed for CCAA protection, it argued that lowest-ever steel prices, steel dumping, a decreased credit rating and issues with its iron ore pellet supply were the reasons cited for the need to file for the court protection.

Since then, prices have rebounded, the iron ore pellet supply issue has been settled and the Canadian government is cognisant of the implications of steel dumping on North American markets and is taking measures to create a level playing field through the modernization of the trade remedy plan.

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http://minnesotabrown.com/2017/04/cliffs-mesabi-metallics-iron-ore-war.html

Goncalves has been openly saying that if he can’t open Cliffs’ first iron briquette plant on the former Essar site, he’ll be shopping other locations, including Canada. Officials like Gov. Mark Dayton and State Sen. Tom Bakk support the Cliffs proposal.

https://www.sootoday.com/local-news/former-essar-steel-algoma-ceo-proposing-377-billion-open-pit-project-184318

..Algoma Steel (now Essar Steel Algoma) in Sault Ste. Marie, Plastino’s former employer of 39 years, staked all the claims and once had plans to advance it in the early 1960s in partnership with Dofasco