Stelco's new owner promises more local production, says he knows what it's like to live in a steel town

The new owner of Ontario steelmaker Stelco says his company "will not disappoint the people of Hamilton and Nanticoke," where the business's major facilities are based. 

Speaking to CBC Hamilton this week, CEO Lourenco Goncalves said his company, U.S. steelmaker Cleveland-Cliffs, plans to keep Stelco's headquarters in Ontario.

Cleveland-Cliffs purchased Stelco for about $3.4 billion in July. In November, the foreign acquisition received approval from the Canadian government. Minister of Innovation, Science and Industry François-Philippe Champagne said approval hinged on a five-year commitment that included maintaining Stelco's head office in Hamilton and carrying operations under the name Stelco, a Cleveland-Cliffs Company.

Cleveland-Cliffs must also employ at least the same number of unionized and most-non-unionized workers, and honour existing collective agreements and pension and benefit commitments. About 1,000 people work for Stelco in Canada. 

In the U.S., Cleveland-Cliffs deals mostly in higher-end steel, whereas Stelco produces a more general commercial product, Goncalves said, adding that the Stelco acquisition doubles his business's exposure to the general market. 

The company plans to produce more coke in Ontario to send stateside, Goncalves said. Coke is a fuel used for making steel that is produced by heating metallurgical coal in a blast furnace. 

He added that Cleveland-Cliffs plans to invest in a new stove for the blast furnace in Nanticoke, which will reduce emissions. However, the company does not plan to install an electric arc furnace, which other steelmakers have done to lower emissions. Goncalves said doing so at Stelco would mean fewer jobs. 

"Local communities don't want to see that. They want to live well. They want clean air, they want clean water and they want the ability to get employed and make a living," he said. 

WATCH | Cleveland-Cliffs CEO says he won't disappoint the community

Steel is a high-emissions industry, and Stelco Lake Erie — the Nanticoke site — is one of Ontario's top industrial emitters. 

In Hamilton, people who live near steel plants and the city's industrial sector have long voiced concerns about air quality and pollution. Numerous east-end residents have reported an increase in the amount of black soot they're finding on their properties, pets and children this year, and the City of Hamilton has asked residents to share concerns. 

Goncalves said that relative to steelmakers in places including Japan and India, the levels of carbon dioxide emissions coming out of Stelco Lake Erie or Cleveland-Cliffs's other facilities "are very good."

Cleveland-Cliffs is used to operating near residential areas and does so in Cleveland, where Goncalves himself lives, he said. 

"We want communities to understand that we also generate jobs. We generate wealth," Goncalves said. "But we are not going to do that at the expense of [the] health or air quality or water quality of the neighbourhoods that we operate in."