Agreement will ensure steel producer has enough of raw material to continue making steel through 2016
SAULT STE. MARIE, Ont.—Embattled Ontario steel maker Essar Steel Algoma has reached a settlement to keeps its supply of iron ore flowing.
The Sault Ste. Marie-based producer said it and Cliffs Natural Resources have agreed to a settlement in principle that “resolves all claims between the parties,” ensuring the Algoma steel mill will maintain a supply of iron ore pellets for the rest of 2016. The parties have agreed to then reinstate the terms of their original contract next year.
“We are very pleased to have this litigation behind us, and are grateful for the focused efforts of all involved in facilitating a speedy resolution,” Kalyan Ghosh the company’s CEO said. “In light of the current Sale and Investment Solicitation Process, this agreement provides interested parties with assurance of supply of quality iron ore, and ensures Algoma can remain a low cost producer.”
The agreement settles a legal dispute stretching back several months surrounding the price of the raw material and Essar Steel Algoma’s court-supervised restructuring. The steel firm filed for creditor protection under the Companies’ Creditors Arrangement Act last November as it searches for a buyer or investor to restructure or recapitalize. It announced earlier this month it has received several bids, and is evaluating its options.