Algoma Steel And Hanwha Ocean Sign $250M MOU To Supply Canadian Steel For Future Submarine Program; Algoma Will Be Required To Make Annual Payments To Hanwha Ocean For 10-Years Following The Commencement Of Operations Of The Beam Facility Equal To 3% Of The Net Sales Of The Beam Mill Facility

• Algoma Steel and Hanwha Ocean align to underpin Canada's future submarine program with Canadian steelmaking capability and Canadian workers, supporting long-term naval readiness and industrial sovereignty
• Hanwha Ocean to provide Algoma with up to USD $250 million (approx. CAD $345 million) as support for advancing Algoma's diversification strategy and domestic supply for Canadian defense procurement

SAULT STE. MARIE, Ontario, Jan. 26, 2026 (GLOBE NEWSWIRE) -- Algoma Steel Group Inc. (NASDAQ:ASTL, TSX:ASTL) ("Algoma" or "the Company"), a leading Canadian producer of hot and cold rolled steel sheet and plate products, today announced that its wholly owned subsidiary, Algoma Steel Inc., has entered into a binding memorandum of understanding with Hanwha Ocean Co., Ltd.. Canada's future submarine program could soon be supported by Canadian steel, Canadian workers, and Canadian industrial expertise under a new long-term strategic arrangement.

The two companies have entered into a binding Memorandum of Understanding (MOU) to establish a long-term strategic arrangement with an aggregate potential value of USD $250 million (approx. CAD $345 million) comprised of (i) a cash contribution of USD $200 million (approx. CAD $275 million) towards the potential development of a structural steel beam mill in Sault Ste. Marie, Ontario and (ii) anticipated purchases of Algoma products with an aggregate value of up to USD $50 million for use in connection with its Canadian Patrol Submarine Project (CPSP)-related commitments, including submarine construction and the development of Maintenance, Repair and Overhaul (MRO) infrastructure required to support the fleet throughout its operational lifecycle in Canada. The MOU is structured to support Hanwha Ocean's ability to satisfy its Industrial and Technological Benefits (ITB) obligations in connection with the CPSP.

The strategic arrangement is intended to strengthen Canada's domestic industrial base while supporting the long-term operational needs of the Royal Canadian Navy.   If the contemplated beam mill project goes ahead, the operation would support the creation of new skilled, long-term Canadian jobs.

The MOU is subject to Hanwha Ocean being awarded and entering into an effective contract under the CPSP and the execution of definitive agreements with Algoma. The MOU also provides that Algoma will be required to make annual payments to Hanwha Ocean for ten years following the commencement of operations of the beam facility equal to 3.0% of the net sales of the beam mill facility, subject to its financial performance.

This arrangement demonstrates Canada's Buy Canadian policy at work, ensuring that construction and sustainment activities are rooted in domestic supply chains and supporting industrial sovereignty, supply-chain resilience, and high-quality Canadian jobs in an increasingly uncertain global environment.