Ontario Construction News staff writer
The chief executive of Cleveland-Cliffs is defending the decision to shut down part of Stelco’s Hamilton operations, saying the company has the legal right to reduce production as tariffs and weaker domestic market conditions impact the Canadian steel industry.
Lourenco Goncalves, CEO of Ohio-based Cleveland-Cliffs, told CBC News that the ability to sell steel produced at Stelco’s Hamilton facility into the U.S. market was an underlying condition of the company’s 2024 acquisition of Stelco.
“I would not have acquired the Stelco if I knew that Canada and the United States would become what they became – enemies in trade,” Goncalves told CBC.
Cleveland-Cliffs acquired Stelco in a $3.4-billion cash-and-stock transaction in November 2024. The deal included commitments related to maintaining significant employment levels in Canada and significant operations in Hamilton.
Stelco announced this week that it plans to indefinitely close its cold-rolled and coated finishing operations at Hamilton Works, with the move expected to affect up to 500 workers. The company plans to concentrate production on hot-rolled steel and shift some operations to its Lake Erie Works facility in Nanticoke.
Cleveland-Cliffs has attributed the decision in part to the impact of the Canada-U.S. trade dispute. U.S. tariffs on imported steel, combined with Canadian counter-tariffs and increased imports into Canada, have put pressure on the domestic market.
Goncalves told CBC the Canadian market cannot accommodate production from Stelco and ArcelorMittal Dofasco while also absorbing imported steel.
“We have decided to go ahead and concentrate on hot-rolled products,” he said, reacting Prime Minister Mark Carney’s statement that the federal government would “use all the powers that we have” to ensure Stelco meets its obligations to Canadian workers.
Carney criticized the company’s decision to reduce Hamilton production and singled out Goncalves for supporting U.S. President Donald Trump’s steel tariffs.
However, Goncalves told CBC that his support for Trump’s trade policies does not conflict with his support for Stelco employees or Canadian operations.
“America first is not America only,” he said, confirm the shutdown is needed because there is insufficient demand for additional finished steel and government funding would not resolve the underlying issue, arguing that the central problem is the lack of certainty in Canada-U.S. trade relations.
“The problem is not lack of money,” he told CBC. “It’s not like Stelco is running out of cash.”
Cleveland-Cliffs’ acquisition of Stelco was completed less than two years ago. The transaction was presented at the time as a way to maintain the Hamilton steelmaker’s operations and workforce while strengthening its position within the North American steel industry.
The Hamilton production changes now put those commitments under scrutiny as the federal government considers what measures it can take to ensure the company maintains its obligations.
The Hamilton Works facility is one of Canada’s major steelmaking operations and has been an important part of the city’s industrial sector for decades.
