Essar Receives Investment Canada Act Approval

    MUMBAI, India, June 8 /CNW/ - Essar Global Limited today announced that
it has obtained, through its wholly owned subsidiary Essar Steel Holdings
Limited ("Essar"), approval under the Investment Canada Act in connection with
its proposed acquisition, pursuant to a court-approved plan of arrangement, of
all of the outstanding common shares of Algoma Steel Inc. ("Algoma"). Essar
has now received all regulatory approvals necessary to complete the
    Essar Global Chairman, Shashi Ruia, said he was "delighted with the
Minister's approval," which he noted is consistent with Essar's "strong belief
that its acquisition of Algoma will prove to be of enormous benefit to both
Essar and Algoma, as well as the City of Sault Ste. Marie, the province of
Ontario and Canada as a whole." "In Essar," Mr. Ruia added, "Algoma will have
new ownership committed to investing in Algoma's facilities to support its
growth and sustainability. We look forward to completing the arrangement, and
welcoming Algoma into the Essar family."
    Mr. Denis Turcotte, who will continue as Chief Executive Officer of
Algoma, also welcomed the news. According to Mr. Turcotte, "Essar's
acquisition of Algoma will enable us to manage new growth opportunities and
migration of the best technological and engineering practices in both
organizations. I am confident that this is a win-win situation for all Algoma
stakeholders, including Algoma employees but also the local community of Sault
Ste. Marie and the province of Ontario."
    In order to obtain the Minister's approval under the Investment Canada
Act, Essar has provided to the Minister a number of important commitments in
respect of Algoma's management, operations, employees and community
contributions. The attached Backgrounder outlines a number of the key

    About Essar

    Essar Global is an international conglomerate operating in six business
areas - steel, oil & gas, power, communications, shipping & logistics and
construction. It has offices world-wide and employs approximately 20,000
people, including over 3500 persons in the United States. The group has built
a portfolio of assets with expected revenues of US$10 billion in the year to
March 2008.
    Essar Steel Holdings Limited is an emerging global steel company. It is a
fully integrated manufacturer and one of the lowest cost producers of steel
globally. Essar Steel Holdings Limited, along with its subsidiaries, operates
an integrated steel plant of 4.6 million tonnes per annum (tpa) in India,
which is expected to be increased to an 8.5 million tpa steel complex for flat
products by 2009. The complex also comprises a cold rolling plant, down stream
facilities and a 5 meter wide plate mill. It is India's largest exporter of
flat steel.
    Essar Steel Holdings Limited also operates a cold rolling complex in
Indonesia and has now finalized plans to setup an integrated steel plant for
flat products in Trinidad and Tobago and a hot strip mill in Vietnam.

    About Algoma Steel

    Algoma Steel Inc. is an integrated steel producer based in Sault Ste.
Marie, Ontario with steel shipments of 2.4 million tons in 2006. Revenues,
which totalled C$1.9 billion in 2006, are derived primarily from the
manufacture and sale of rolled steel products including hot and cold rolled
steel and plate.


           Backgrounder to Essar Global Limited Press Release dated
         June 8, 2007: Essar Receives Investment Canada Act Approval

    Algoma Canadian Head Office and Management

    Essar will maintain a Canadian corporate head office for Algoma in Sault
Ste. Marie, Ontario, including its responsibility for existing functions and
activities in relation to Algoma's business. Essar will also ensure that
Canadians continue to play a prominent and substantial role in management of

    Continued Commitment to Employment

    Given Essar's plans to use Algoma as a platform for expansion in North
America, it intends to make appropriate investments in Algoma to sustain the
business and to ensure its continued growth. Essar, therefore, is confident
that its acquisition of Algoma will have a positive impact on employment. In
recognition of the important role that Algoma plays in Sault Ste. Marie and in
Northern Ontario as a whole, Essar will ensure that Algoma continues its
employee recruitment efforts in Northern Ontario, including support for
regional learning institutions and apprenticeship programs targeting
employment candidates in Northern Ontario communities.

    Increased Capital Investment and Research and Development

    Essar will ensure an increase in Algoma's annual capital expenditures,
and will undertake a major study of the feasibility of restarting Algoma's
dormant No. 6 blast furnace. Consistent with Essar's plans to grow and sustain
Algoma's business, Algoma will also implement all previously approved capital
expenditure projects, including relining of its No. 7 blast furnace and
construction of a 70-megawatt cogeneration power facility in Sault Ste. Marie.
Essar will also ensure that Algoma continues to play an important role in
relation to research and development by ensuring implementation of previously
approved research and development projects and ensuring continued funding of
research and development at Algoma.

    Improved Productivity and Efficiency

    As one of the world's lowest cost steel producers and with a proven track
record in developing higher value-added steel products, Essar believes that it
can make an important contribution to enhancing Algoma's productivity and
efficiency. Essar will work closely with Algoma to develop higher-grade and
higher-value products at Algoma's facilities, and to diversify Algoma's
product base into new areas currently underserved by Algoma's facilities.

    Support for the Environment and Community

    Algoma has maintained a positive track record of environment and social
contributions, and Essar has committed to ensure that it continues on this
path. Essar, among other things, will maintain Algoma's ISO14001 standard,
continue Algoma's participation in discussions with Ontario's Environment
Ministry to establish a voluntary environmental management regime, and
continue Algoma's efforts to reduce energy consumption. Essar will also ensure
that Algoma implements plans for cast house particulate release emission
controls on one of its blast furnaces.
    Essar will also ensure that Algoma continues to play an important role in
the community in which it has grown. It will ensure that Algoma maintains its
student employment and apprenticeship programs, and that it continues Algoma's
practice of charitable donations, including to regional educational

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