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Essar facing possible strike at Ontario plant

Jun 20, 2013 | 05:48 PM |

Tags  Essar Steel Algoma, labor outage, liquidity, slab, flat-rolled steel, steel, labor strike, United Steelworkers USW Local 2251

NEW YORK — Essar Steel Algoma Inc. might face a labor disruption at its flat-rolled facility in Ontario at the start of August, the company said June 19.

The Sault Ste. Marie, Ontario-based steel producer is negotiating a new contract with members of United Steelworkers union Local 2251, which represents some 79 percent of employees at the mill. The previous three-year labor agreement, ratified in August 2010, expires July 31.

"The company may be unable to successfully negotiate future collective bargaining agreements without any labor disruption," Essar Steel Algoma said in its fiscal 2013 financial statement. "Our customers, or companies upon whom the company is dependent for raw materials, transportation or other services, could also be affected by labor difficulties."

The integrated steelmaker, which posted a fifth consecutive quarterly loss in the three months ended March 31, confirmed that it would receive access to up to $50 million in funds to reinforce its liquidity position (, May 9).

The company added that the labor disruptions could also result in a "significant loss of production and sales" and have a "material adverse effect" on its financial condition or operations.

Neither the company nor a union official could be reached for comment.

Essar Steel Algoma has a raw steel production capacity of some 4 million tons per year making a variety of slab, plate and sheet products.

Labor negotiations at Pittsburgh-based U.S. Steel Corp.’s Lake Erie operations, also located in Ontario, have led to a lockout of some 1,000 union workers since the end of April (, April 29).

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