Algoma Steel Inc. Signs Contract.

SAULT STE. MARIE, Ontario--(BUSINESS WIRE)--Dec. 17, 1998-- Algoma Steel Inc. (NASDAQ:ALGSF) (TSE:ALG) and St. Lawrence Cement sign a Contract to construct and operate a Slag Granulator.

Algoma Steel Inc. and St. Lawrence Cement Inc. have reached a long term agreement to construct and operate a slag granulator at Algoma Steel's manufacturing facilities in Sault Ste. Marie, Ontario.

The slag granulator is expected to be operating by the end of 1999 and to produce 455,000 metric tonnes per year of granulated blast furnace slag, a by-product of Algoma's no. 7 blast furnace, which, when ground and used in concrete mixes, improves their durability and chemical resistance.

The granulator will be constructed and owned by St. Lawrence and will be situated adjacent to Algoma's no. 7 blast furnace. Algoma Steel and its personnel will be responsible for the operation of the granulator.

Glenn Bond, Algoma's Vice President - Operations, stated that the granulator will provide a number of benefits to Algoma. "The new granulator will be a safer and a more environmentally effective method for dealing with the slag generated by the no. 7 blast furnace. In addition, the arrangement with St. Lawrence will be more cost effective for Algoma than the current practice for dealing with blast furnace slag."

Algoma Steel, based in Sault Ste. Marie, Ontario, is Canada's third largest integrated steel producer. Revenues are derived primarily from the manufacture and sale of rolled steel products, including hot and cold rolled sheet, plate, seamless tubular products and structural products.