Getting fleeced

Vincent J. Curtis

16 Feb 22

RE: Historic green steel project gets $500 million from Ontario.  By Matthew van Dongen.  The Hamilton Spectator 16 Feb 22.

You have to admire ArecelorMittal Corporate’s ability to fleece Canadian governments.  They got them to pay for a new $1.8 billion electric arc furnace on the nonsense that it was “green.”

Electric arc furnaces enable the reusing of steel, but they don’t eliminate the need for primary steelmaking.  Being a world-wide steel making company, ArcelorMittal simply switches primary steelmaking from Hamilton to, say, India.  Hamilton’s loss also creates room for more Chinese primary steel.

The difference is that Dofasco Works knows how to produce pig iron with half the amount of coal that Indian and Chinese producers require.  The effect world-wide on CO2 production is for it to increase as a consequence of shutting down Dofasco’s production.  It’s just not being produced in Hamilton, and that makes Canadian politicians happy because it reduces the amount of CO2 they’re responsible for.  Smart for them, bad for the climate (if you believe that sort of thing).

Ontario is on the hook to produce the electric power to run the furnace, with all the costs associated with that.  It would be absurd for Ontario to generate the power by burning coal in a coal-fired electrical generator when the purpose of the new furnace is to reduce CO2 emissions.  But wind and solar are expensive and unreliable, so that leaves nuclear.  There are new, small nuclear generators now available with smaller capital costs than, say, Darlington or Bruce.  But behind the $500 million gift of Ontario to ArcelorMittal, is a further commitment of a few billion to be able to generate the power required to run the new furnace.

In summary, ArcelorMittal gets new production for free, Canadian politicians salve their consciences on the backs of the taxpayers, Ontario has to build new, carbon-free electrical generation, and the climate takes a hit.

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