Mediation talks between Stelco Inc. and a number of its stakeholders, conducted for the past month under the direction of the Hon. George Adams, have ended.

In a letter delivered to the parties, Mr. Adams indicated that mediated discussions over which he had presided under the direction of the Superior Court of Justice (Ontario) constituted "an important exchange of perspective, data and possible solutions." He added, however, that a comprehensive framework agreement had not been achieved, and that he could not report that "further mediated talks at this time would produce such an agreement." For these reasons, Mr. Adams decided to end his involvement, urging the parties to "consider how they might bridge their outstanding differences."

Courtney Pratt, Stelco President and CEO, said, "I want to thank Mr. Adams for his time, hard work and commitment during this process. We'll continue to seek a solution that reflects the needs and interests of all stakeholders. As I've said for some time, it's important that all parties work together and in the same direction so that we can find a positive outcome."

The company indicated that it would proceed to continue the dialogue with other parties, 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 CCAA as a viable and competitive steel producer as quickly as possible. In particular, the company will work to resolve the 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," Mr. Pratt noted. "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.

"That's why we've stressed the urgency of securing agreement on a restructuring plan, a plan that will enable Stelco to be viable through all stages of the market cycle."

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

Stelco Inc. is a large, diversified steel producer involved in major segments of the steel industry through its integrated steel business, minimills, and manufactured products businesses.