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Former Stelco bidder Tom Clarke makes a play for Essar Algoma

This November 2015 file photo shows a crucible once used to carry molten steel outside the Essar Steel Algoma plant in Sault Ste. Marie, Ont.

Kenneth Armstrong/The Globe and Mail

A U.S. coal mine and health-care executive who bid for U.S. Steel Canada Inc. is trying to make a bid for Essar Steel Algoma Inc. with the backing of the United Steelworkers union.

Tom Clarke, chief executive officer of a Virginia-based health-care company and a principal of coal mining company ERP Compliant Fuels LLC, has signed a support agreement with Local 2251 of the steelworkers union in Sault Ste. Marie, Ont., to bid for Essar Algoma, which is operating under the Companies' Creditors Arrangement Act.

A copy of the support agreement lists Mr. Clarke as CEO of MAGA Steel Corp., which is believed to be an acronym for Make Algoma Great Again. The agreement calls for MAGA Steel to extend the current labour agreement between Essar Algoma and the union until July 31, 2018.

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MAGA will also restore payments to Essar Algoma's defined-benefits pension plan and pay workers cost of living allowances.

The union local issued a terse statement earlier this week saying its members approved a support agreement for a party interested in acquiring Essar Algoma. It did not identify the entity.

There are parties interested in buying Essar Algoma, said Ken Rosenberg, a lawyer for the United Steelworkers national office.

Mike Da Prat, president of Local 2251, said the terms of a court order prevent him from discussing the situation.

Essar Algoma has been operating under CCAA protection since November, 2015. Protection has been extended several times, most recently until April 30.

A group of lenders has been given the nod to buy the company and has been negotiating with the union on a new contract, but participants in those talks are banned from discussing them. Ontario Superior Court Justice Frank Newbould, who is overseeing the restructuring, has cautioned all stakeholders in the case about what he described as negotiating in the media.

Mr. Clarke and ERP Compliant Fuels lost out on the bidding for U.S. Steel Canada, which is also operating under CCAA protection and has been renamed Stelco Inc.

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He said last year when he was bidding for U.S. Steel Canada that the steel market is turning from a global market to a series of regional markets. That would enable small, local steel makers to thrive, he said at the time.

ERP Compliant is a subsidiary of Mr. Clarke's Virginia Conservation Legacy Fund Inc., a non-profit environmental organization. It's also the second-largest producer of metallurgical coal in the United States.

Mr. Clarke lost out in the bidding for U.S. Steel Canada to Bedrock Industries LP. A stakeholder vote on the restructuring plan for that steel maker is scheduled for later this month, but Local 1005 of the steelworkers union, which represents workers in Hamilton, has still not reached a deal with Bedrock on a new labour contract.

The stay under CCAA was extended last month to April 30.

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