Cleveland-Cliffs faces legal threat from Canada over Stelco commitments

The Canadian government has issued a 15-day deadline to Cleveland-Cliffs, the U.S.-based owner of Stelco Inc., to address alleged violations of binding commitments made during its acquisition of the Ontario steelmaker two years ago. Industry Minister Mélanie Joly issued an 11-page letter accusing the company of failing to honor six commitments, including employment guarantees.

Minister Joly further accused Cleveland-Cliffs of advocating for U.S. tariffs on Canadian steel while simultaneously using those tariffs to justify layoffs. This follows the company's September announcement to lay off up to 500 workers at Stelco’s Hamilton and Lake Erie Works facilities, citing challenging market conditions and U.S. tariffs.

Despite the layoffs and the idling of galvanizing lines, Cleveland-Cliffs CEO Lourenco Goncalves reported that Stelco achieved its strongest quarterly results since the takeover. Goncalves attributed the decision to idle galvanizing lines to an oversupplied market in Canada and stated the company will focus on hot-rolled products. He noted that approximately 2,000 Canadian jobs will be preserved and laid-off workers may be recalled as market conditions improve.