On January 26, 2026, Canada’s Algoma Steel Group Inc. entered into a binding memorandum of understanding (MOU) with Hanwha Ocean Co., Ltd.
Both companies have decided on this agreement to establish a long-term strategic arrangement with a potential value of USD $250 million (approx. CAD $345 million) comprised of a cash contribution of USD $200 million (approx. CAD $275 million) towards the potential development of a structural steel beam mill in Sault Ste. Marie, Ontario and anticipated purchases of Algoma products with an aggregate value of up to USD $50 million for use in connection with its Canadian Patrol Submarine Project (CPSP)-related commitments, including submarine construction and the development of Maintenance, Repair and Overhaul (MRO) infrastructure required to support the fleet throughout its operational lifecycle in Canada.
The MOU is structured to support Hanwha Ocean’s Industrial and Technological Benefits (ITB) obligations in connection with the CPSP and its intended to strengthen Canada’s domestic industrial base while supporting the long-term operational needs of the Royal Canadian Navy. If the proposed beam mill project goes ahead, the operation would support the creation of new long-term Canadian jobs.
The MOU also states Algoma will be required to make annual payments to Hanwha Ocean for 10 years following the commencement of operations of the beam facility equal to 3.0 percent of the net sales of the beam mill facility, subject to its financial performance.
Rajat Marwah, CEO of Algoma Steel, said, “As we usher in a new era for Algoma with electric arc furnace steelmaking and modernized finishing capabilities, this strategic arrangement with Hanwha Ocean represents a foundational step forward in our diversification strategy. It reinforces our focus on becoming Canada’s leading sustainable steelmaker, aligned with the country’s nation-building priorities in defense and infrastructure. We also recognize and applaud the Government of Canada’s support for policies that strengthen domestic manufacturing, supply-chain resilience, and long-term industrial capability.”