International steelmaker ArcellorMittal is investing in a sustainable energy company that plans on establishing biomass refineries in Kirkland Lake and the Nipigon area.
Toronto-based CHAR Technologies has signed a $6.6-million “strategic investment” through the steel company’s innovation fund to test run its biochar product in ArcellorMittal’s electric arc furnace’s (EAF) in Hamilton.
CHAR makes a biocarbon product which has been tested in the blast furnace at ArcellorMittal Dofasco in Hamilton since 2021. This agreement, a July 5 news release, said will enable a large-scale trial run through the EAF process.
CHAR also signed a memorandum of understanding under which ArcelorMittal Dofasco will purchase biocarbon produced at CHAR’s production facility in nearby Thorold on the Niagara Peninsula starting this year.
CHAR makes a technology that converts wood waste – like forest biomass, sawdust and non-marketable fibre – into two products, a renewable natural gas and a biocarbon through a proprietary high-temperature pyrolysis process. The biochar product was developed as a “drop-in replacement” to reduce the steel company’s reliance on fossil-based carbon sources, specifically coal.
The proceeds will be used for general working capital, including tech advancement of its other project sites beyond Thorold, the company said.
The company has also eyed the Lake Nipigon area for development opportunities.
CHAR signed a memorandum of understanding earlier this year with the Lake Nipigon Forest Management Inc. (LNFMI), co-owned by four area First Nations, outlining a joint venture on a kiln operation that would convert woody biomass and other unsaleable forest products into RNG for home heating applications and a biocarbon product for the steel industry.
CHAR wants to expand to northwestern and northeastern Ontario due to the availability of biomass, both from harvesting and sawmilling operations. Potential downstream customers for their renewable natural gas product is a major utility company in Quebec and the mining industry in this region.
In a previous interview with Northern Ontario Business, CHAR Technologies CEO Andrew White has been coy to questions if they are in discussions with Algoma Steel in Sault Ste. Marie, a steelmaker that’s also transitioning to electric arc furnace technology.
“I would say we're very active in the steel industry," he said a few months ago.
In the investment agreement with ArcellorMittal, CHAR Technologies issues 11 million units – amounting to one common share – to the steel company through a private placement that amounts to $6.6 milion. ArcellorMittal becomes a 12.48 per cent shareholder in CHAR.
The investment comes out of the steel company’s XCarb® Innovation Fund. Its mandate is to invest in companies developing “breakthrough technologies” to speed up the steel industry’s carbon neutral steelmaking.