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US Steel Hamilton, in Hamilton, Ont.Stephen C. Host/The Canadian Press

The new owner of Stelco Inc. is already thinking about expanding, with the purchase of another steel mill in Canada operating under creditor protection as a potential target.

Bedrock Industries LP believes a purchase of Algoma Inc. would make sense, Alan Kestenbaum, chairman and a majority shareholder of Bedrock said in an interview.

"We've got various targets on our mind in terms of where we go next. Algoma is one of them," Mr. Kestenbaum said.

While Stelco emerged from protection under the Companies' Creditors Arrangement Act on Friday, Algoma's CCAA protection has been extended until Sept. 30.

Algoma's lenders have made an offer to purchase the company. Its former parent, Essar Global Ltd., which acquired Algoma in 2007, has made several attempts to get involved in bidding for the company but has been rebuffed.

Mr. Kestenbaum said what happens with Algoma depends on the bid by the secured creditors, but "we certainly think we'd be a viable candidate to buy Algoma, having had a good working relationship and good experience with the province of Ontario, with the unions and everything else."

His comments on Stelco are the first public statements he has made about Bedrock's purchase of the former unit of United States Steel Corp. since the investment fund he started in 2015 was identified as the leading bidder for Stelco in the summer of 2016.

Bedrock plans to invest more than $250-million (U.S.) in Stelco's operations during the next five years, he said, noting that that capital expenditure is for growth and expansion of the steel maker's product lines.

One project will be to install annealing furnaces at the company's Hamilton works to improve and enhance the product mix. Steel making operations have been shut down in Hamilton since 2010, leaving the Lake Erie mill, which is the newest integrated steel mill in North America and highly regarded by auto makers and other steel users.

Stelco's emergence from CCAA protection comes at what could be a dangerous time for steel makers in Canada and other countries that ship to the U.S. market.

The Trump administration is considering imposing tariffs of up to 20 per cent on non-U.S. steel makers, acting under section 232 of the 1962 Trade Expansion Act, which permits tariffs on grounds of national security.

Steel makers in Canada have asked Washington to exempt Canadian mills from any tariffs, but the potential trade action looms as a cloud over Stelco, even though such a move makes no sense, said Charles Bradford, an independent U.S. steel analyst.

"The 232 case is idiotic," Mr. Bradford said. "But these are things that are not going to be decided on an economic basis, but the politics."

Mr. Kestenbaum would not comment on the possibility of tariffs, but Stelco president Mike McQuade said the company has been working with the Canadian Steel Producers Association to make sure the Americans understand the size of the two-way trade in steel.

There is as much U.S. steel being exported to Canada as Canadian steel being exported to the United States, Mr. McQuade said.

"It's pretty much a balance of trade."

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