Algoma Steel Group Inc.

Structural Corridor Collapse

On January 20, 2024, a structural corridor carrying various utilities crucial for the Company’s coke oven battery and blast furnace operations suffered an unexpected collapse. An independent investigation revealed an unforeseen escalating overload condition, resulting in a failure of a structural support member of the utility corridor, thereby causing the subsequent cascading collapse of other support structures. The collapse disrupted the flow of coke oven gas from the batteries to the rest of the steelworks, as well as a portion of the natural gas and oxygen flow to specific facilities, most critically the blast furnace. The unforeseen structural collapse did not result in any injuries, but for safety reasons, various areas near the collapse were evacuated and blast furnace operations were suspended at the time of the incident. Due to the unexpected shutdown and delayed restart, the blast furnace experienced operational challenges culminating in a chilled hearth, which suspended production for a period of three weeks, during which roughly 150,000 tons of hot metal production was lost.

The Company and its insurers have reached a full and final settlement of C$145.0 million, net of applicable deductibles, of which C$45.0 million was recognized in other income during the six month period ended June 30, 2026 in the condensed interim consolidated statements of net loss. During the six month period ended June 30, 2025, the Company recognized insurance proceeds of C$50.0 million, which were also presented in other income in the condensed interim consolidated statements of net loss.