12:58 PM EDT, 07/05/2021 (MT Newswires) -- Algoma Steel, which is planning to list on the TSX, after its acquisition by New York's Legato Merger Corp is complete, has received a $420 million commitment from the Government of Canada. The funding will facilitate the Sault Ste-Marie-based Algoma Steel's proposed transformation to electric arc furnace steelmaking (EAF).

The financial commitment includes up to $200 million from the Innovation Science and Economic Development Canada's Strategic Innovation Fund (SIF) through the Net Zero Accelerator to rapidly expedite decarbonization projects and accelerate Canada's industrial transformation. The Canada Infrastructure Bank is committing a further $220 million towards the project. The funding will be provided over four years.

Algoma Steel's proposed EAF transformation has the potential to reduce its carbon emissions by approximately 70%, making the project among the lowest-cost-per-tonne of GHG reduction in Canada, the company said. When combined with Ontario's low-carbon power, Algoma Steel will be positioned as the "greenest" producer of flat-rolled steel in Canada, and among the greenest in North America.