South Korean shipbuilder Hanwha Ocean and Canadian steel manufacturer Algoma Steel have entered into a binding memorandum of understanding (MoU) intended to establish a long-term strategic relationship.
The agreement will see Hanwha Ocean commit up to $250m to support the development of steel production facilities and the procurement of Canadian steel for the Canadian Patrol Submarine Project (CPSP), including construction and maintenance infrastructure.
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As part of the arrangement, Hanwha Ocean plans to invest $200m in Algoma Steel, potentially facilitating the development of a structural steel beam mill in Sault Ste. Marie, Ontario.
Additionally, Hanwha Ocean will purchase steel products from Algoma valued at up to $50m.
The purchased steel will be used for CPSP-related activities, such as submarine construction and maintenance, with supporting infrastructure planned for Nova Scotia and British Columbia.
These facilities aim to support the Royal Canadian Navy’s submarine fleet throughout its operational lifecycle.
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By GlobalDataThe MoU aligns with Canada’s Industrial and Technological Benefits framework for the CPSP and is meant to bolster Canada’s domestic industrial base while addressing the Royal Canadian Navy’s operational requirements.
Should the beam mill proceed as envisioned, it is expected to generate skilled employment opportunities in Canada.
Hanwha Ocean president and CEO Hee Cheul Kim said: “This partnership is about working side by side with Algoma as a leading Canadian steelmaker to build something lasting.
“By anchoring steel production, infrastructure, and long-term sustainment in Canada, we are committed to strengthening Canada’s industrial resilience and supporting a submarine capability that Canadians can rely on today and for generations.”
Last November, Hanwha Ocean signed an MoU with PCL Construction of Canada to facilitate infrastructure work for the CPSP.
