Officials say Sault will still benefit from submarine contract

Sault Ste. Marie loses too after failed South Korean submarine bid but Algoma Steel sees new hope. Cory Nordstrom has the latest.

There was disappointment in Sault Ste. Marie on Monday with the announcement that the Korean company aligned with Algoma Steel was not chosen to build Canada’s submarine fleet.

But local officials now say there will be opportunities for the city to benefit even with a German company selected to build the subs.

The federal government chose not to go with Hanwha Ocean, the Korean company that planned to invest $345 million in Algoma Steel.

While local officials would have preferred South Korea’s bid over the successful firm TKMS of Germany, Sault MP Terry Sheehan said he was told by Algoma Steel officials that the submarines would use a very minimal amount of steel – and that the real value is found in the infrastructure the subs will require.

“We’re going to have to build docks on the East Coast and the West Coast, and Algoma Steel is excited about that, because that is a very significant order of steel,” Sheehan said.

In a statement to CTV News, Algoma Steel had this to say:

“Algoma is proud to see Canada investing in its own industrial and defence capability, and looks forward to the opportunities that this investment creates for the Canadian steel industry.”

Sheehan said those opportunities could come quickly.

“I’ve arranged for TKMS to reengage with Algoma Steel -- and that’s happening (Tuesday) and will continue to happen over the next little while,” he said.

“We’re going to continue to make sure that we see as many benefits as we can. And in particular, when these submarines are built, having Algoma Steel (products) used in building the docks and the housing for the facilities on the east and west coasts will be significant.”

The South Korean bid included a pledge of $275 million for Algoma’s beam mill. Sheehan said the mill can still happen.

“I know that the (Industry Minister Melanie) Joly is also committed,” he said.

“She’s been up here a couple of times now and has said it both times that she’s committed to the beam division. So we’re going to find a way to make this happen. These are hundreds and hundreds of jobs -- and that’s so important to me. So I’m going to continue to leave no rock unturned in getting this beam division up.”

Part of the South Korean deal also included a commitment for Algoma to supply steel used in armoured vehicles.

Sheehan said that opportunity is also still on the table. He plans to meet with the local steelmaker and Brampton defence manufacturer Roshel.