NEGOTIATIONS UPDATE

We are just past the halfway point in bargaining with both USW locals at Essar Steel Algoma. The Company is looking to negotiate agreements that ensure the viability, sustainability and continued success of this operation for many generations to come. It comes as no surprise to anyone who reads the Sault media or follows steel that the financial and operational pressures in the steel industry persist. Not the least among these are the increasingly volatile raw material costs.

These pressures weigh heavy as we go through the process of contract negotiations. Finding the balance between a fair and reasonable settlement that reflects the importance of our employees and the realities of the steel industry is challenging. In spite of this we are working towards achieving fair settlements.

We believe that for both USW locals our proposals reflect these realities.

For USW Local 2251, the Local representing our hourly employees, this means we are seeking ways to optimize productivity and to ensure our competitive performance in an increasingly consolidated, global steel industry. Discussions to date have been constructive in this regard and talks are now moving to monetary issues.

For USW Local 2724, which represents the front line supervisors, technical and professional staff, this also includes making changes that will put us on par with our peers in the industry.

Among the items in our proposals to USW 2724 is the need to amend the work terms for our front line supervisors, who are our front line management personnel, in a way that makes us competitive within our industry. Although we understand how this situation evolved it must be corrected.

We invest a great deal in our front line management personnel and we need to be able to guide their respective career path. Current contractual restrictions within the bargaining unit limit their mobility, creating operating inefficiencies and limiting opportunities for professional development.

There is a tremendous talent pool at ESSAR Steel Algoma Inc. and within the ESSAR Group which all global operations benefit from being able to access. With this in mind, our Local 2724 proposals also contain some provision for shared services and for sharing tasks among the Essar group of companies where it is most economical and makes the most business sense. The revisions we are seeking include safeguards for current employees ensuring no employee job is affected by shared services.

In terms of our competitive advantage, no other competitor is prevented from using the economy of shared services to reduce its costs with appropriate protections for existing employees. What we seek is a level playing field.

These important issues are critical to the ongoing viability of the Company, and they are not going away. The sooner we enter into meaningful discussions with Local 2724 on these issues, the sooner we can arrive at solutions that all parties can support.

Congratulations to our first Scholarship of Excellence Recipients!

Left to Right: Nicholas Turco, Stephen Lajambe, Olivia Christie

Essar Steel Algoma launched its Scholarship of Excellence program in March of this year. This academic initiative is offered to local high school students who will continue their education at university or college upon graduation. Academic performance, community involvement, and extracurricular involvement are the key qualities considered when choosing a successful candidate. First consideration is given to a child, grandchild, or legal ward of an Essar employee or retiree. Most importantly, the Scholarship of Excellence offers students in our community an academically and personally rewarding growth opportunity.

The Scholarship of Distinction is awarded to university bound students while the Scholarship of Merit is given to those who elect the college route. Both are renewable for the term of their degree or diploma, subject to minimum performance requirements.

This year’s call for applicants was met with great enthusiasm and the Scholarship Committee narrowed the candidates down to three special recipients.

Nicolas Turco is a graduate of St. Mary’s College and an Ontario Scholar. With his Scholarship of Distinction he plans to study arts and business at the University of Waterloo in the fall.

Olivia Christie hails from Korah Collegiate where she graduated as an Ontario Scholar and an International Baccalaureate diploma candidate. Olivia will attend the University of Western in the fall, applying her Scholarship of Distinction to her nursing studies.

Stephen Lajambe graduated from Central Algoma Secondary School as an Ontario Scholar. He received the Scholarship of Merit in support of his studies at Cambrian College in the electrical technician program.

Best wishes to Nicolas, Olivia and Stephen as they continue their studies! We look forward to following their progress.

For more information on the Scholarship of Excellence program click here.

Essar Iron Oresman hang up life jackets for another year

Poor weather forcasts could not dampen team Essar’s Iron Oresmen’s spirits at this year’s Dragon Boat Festival. Maybe it was luck, or maybe a full 24 hours of hoping for clear skies, but the proposed rain for Saturday June 12th held off, turning this year’s Dragon Boat Festival into a fun, memorable day of relaxing, socializing, and of course…paddling. With a drummer channeling the aura of Jack Sparrow, and a steersman instilling the fear of an army sergeant, we were bound for greatness!

Joking aside, although Essar’s Iron Oresmen didn’t officially win, team members put in a valiant effort and walked away from the experience feeling the goodness of volunteerism, the warmth of camaraderie, and personal triumph. Collectively, they raised $1,165 in pledges in support of the Sault Search and Rescue and the YMCA.

We proudly salute the 2010 Essar Iron Oresman for their show of spirit - Paddles Up!

THE DRAGONS ARE COMING!

By now you will have seen “The Dragons are Coming!” signs all around the city promoting the upcoming Sault Dragon Boat Festival (http://saultdragonboat.com/).

The Festival takes place this Saturday June 12, 2010 on Topsail Island, Bellevue Park. Proceeds from the event go to Sault Search and Rescue and the Sault Family YMCA.

For their 6th consecutive year, Essar Steel Algoma will be represented at the Festival by the ESSAR Iron Oresmen. The team is made up of employees from across the organization – some experienced paddlers, some new recruits – all keen to show their ESSAR spirit.

On June 12, 2010 – come out to Topsail Island and support the Oresmen!

PADDLES UP!

ESSAR SPIRIT RUNS THE GREAT LAKES!

"Long after the finish time is forgotten, the race is still remembered." - Unknown

Yesterday, despite the rain and cool weather, 13 runners from ESSAR Steel Algoma participated in the Run the Great Lakes race. Two of the runners started at 8:30 am and completed the half marathon and the balance ran the 5K/10K that started at 9:30.

Proceeds from the event go to the Lung Association and the Sault Athletics Track Club.

The race was a milestone event for several members of ESSAR’s newly formed Run/Walk group – a wellness initiative designed to support employees looking to adopt an active lifestyle.

Click here to read the accompanying article from the Sault Star.

Steve McEwan

Background: Rob Wildman, Foregroud: Andre Cyr

Steve Ancic

Mike Suraci

Essar featured in international environment magazine

Earlier this year Essar Steel Algoma hosted an international media delegation (International Go North Green Media Tour) and responded to a request from the editor of Environment Industry Magazine (a United Kingdom publication) to write a case study on our Cogeneration project. Attached is a link to the article as it appears in the April/May 2010 edition of the magazine.

Click through slides to pages 140/141 to view.

NEGOTIATIONS UNDERWAY

Yesterday, the Company and both of our bargaining units, USW 2724 and USW 2251 met to exchange proposals and begin the collective bargaining process. Our bargaining backgrounder has more information on this important round of collective bargaining for Essar Steel Algoma Inc.

Click here to read the coverage in The Sault Star.