Algoma Steel Secures $250M Hanwha Ocean Deal for Canadian Submarine Project

Event summary

  • Algoma Steel signs binding MOU with Hanwha Ocean for up to $250M in support of Canada’s Patrol Submarine Project.
  • $200M cash contribution earmarked for potential structural steel beam mill in Sault Ste. Marie, Ontario.
  • Up to $50M in anticipated purchases of Algoma products for submarine construction and MRO infrastructure.
  • MOU contingent on Hanwha Ocean securing CPSP contract and execution of definitive agreements.
  • Algoma to pay Hanwha Ocean 3% of beam mill net sales for 10 years post-operation.

The big picture

This deal underscores Canada’s push for industrial sovereignty in defense, aligning with global trends toward localized supply chains. The $250M arrangement reflects growing collaboration between domestic steelmakers and international defense contractors, particularly in high-stakes naval projects. The partnership also highlights the strategic importance of sustainable steelmaking in securing long-term defense contracts.

What we're watching

Execution Risk
Whether Algoma can deliver the beam mill project on time and within budget, given the contingent nature of the MOU.
Regulatory Dynamics
How Canada’s Buy Canadian policy will influence future defense procurement deals and domestic manufacturing.
Industrial Strategy
The pace at which Algoma can integrate this partnership into its broader diversification and decarbonization efforts.