Canada - Algoma Steel ventures into wind power

Algoma Steel Inc., one of the heaviest users of electric power in northern Ontario, has formed a joint venture to build a wind tower manufacturing facility next to its steelworks in Sault Ste. Marie. Algoma announced it is in partnership with Schaaf Industrie AG, a German company that plans to produce 180 wind towers a year in the Sault, with a staff of 140 people. "The time has come for Canadians to pursue more renewable sources of energy," Algoma Steel CEO Denis Turcotte said Friday, adding that the move "represents the very sort of strategic development that will serve to position Algoma Steel as a world-class company for the mid- to long term." It is wise, he said, to explore alternatives to steel, given the volatile nature of that industry, he said. Steel is in "a period of substantial uncertainty with respect to the cost of iron, energy and the price of steel products," he said in a conference call with analysts. "We remain focused on exploring and developing strategic alternatives in this rapidly changing industry."

Wind power is one of several ventures that is taking Algoma away from its traditional steel business. The company also disclosed this week that it holds an interest in a diamond property near Wawa, Ont., a small town at the north-east corner of Lake Superior. Turcotte said Algoma has a 10 per cent royalty on lands near Wawa that are owned by Dianor Resources. "Dianor is conducting a diamond exploration program on this property and has recently reported the occurrence of diamonds," Turcotte said. But he said it was too early to tell whether Algoma will make any money on the diamonds, let alone help sink a diamond mine. Algoma has kept the diamond venture secret until now.

"We didn't disclose anything up to this point of time, because there wasn't really anything to disclose," he said. "We don't think there's a lot of materiality here to report to you, but it is an interesting development we wanted to make sure our shareholders are aware of." He added that Algoma "has got property all over Ontario, in particular all over northern Ontario, from the days when people were prospecting and searching for iron ore or for iron deposits.