Stelco mediation ends with no agreement, resignation of mediator

By Caroline Salls

Pittsburgh, June 24 - Stelco Inc. said its mediation talks with a number of stakeholders has ended with no agreement being reached, according to a company news release.

Judge George Adams presided over the mediations over the past month under the direction of the Ontario Superior Court of Justice.

In a letter delivered to the parties Friday, Adams said a comprehensive framework agreement had not been achieved and that he did not believe that "further mediated talks at this time would produce such an agreement."

For these reasons, Adams said he decided to end his involvement with the mediation, urging the parties to "consider how they might bridge their outstanding differences."

Stelco said it would proceed to continue the dialogue and examine the proposals that could form the basis of a restructuring plan, pursue a solution in the interest of all stakeholders and seek to emerge from the Companies' Creditors Arrangement Act bankruptcy as a viable and competitive steel producer as quickly as possible.

In particular, the company said in the release that it will work to resolve its pension solvency deficiency issue and to pursue a fair and reasonable collective agreement with USWA Local 8782 at Stelco's Lake Erie facility.

"The outcome we seek can't be based on the assumption that steel prices will remain at historically high levels," president and chief executive officer Courtney Pratt noted in the release.

"We've said for months that the prices of the past year were unlikely to continue. Since that time, there has been a significant softening of market conditions and a marked decline in steel prices.

The court has prohibited the parties from discussing details of the mediation process until after Stelco's CCAA proceedings have concluded.

The Hamilton, Ont., steelmaker filed for bankruptcy on Jan. 29, 2004.

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