The Birth of a Steel Plant
(continued) - Dosco and Sysco Years
By Sydney S. Slaven
Unfortunately, the 1930’s were another bust cycle with the
Great Depression taking its toll at the Sydney Steel Plant. It took
another world war for the plant to get back on its feet although
a positive major event took place in 1931. This was the introduction
of the Mackie Retarded Cooling Process. It was a method of controlled
cooling of rails to rid them of hydrogen bubbles, (shatter), and
had been invented by a Dosco metallurgist named I.C. Mackie. Dosco
was now able to provide the world’s finest rail.
Another major event that occurred during this period was the formation
of the first workers union in 1938 – Local 1064, United Steelworkers
of America. The first union – company contract was signed
The start of World War II in 1939 signaled the start of another
boom cycle for the Sydney Steel Plant. Once more the war effort
took all of the steel that the plant could produce. The Plate Mill
was recommissioned and, over the length of the war, provided plate
steel for the construction of ships that supplied the British Isles,
allowing them to survive. By now a #2 Open Hearth shop was operating
with two 200-ton tilting furnaces. In time this would expand to
include 6 of these furnaces and the phasing out of the ten-50 ton
The war years also included a tragic event for Sydney Steel. In
1942, German Submarines sank four ships that were carrying ore from
Wabana to Sydney. Seventy lives, mostly Cape Bretoners, were lost.
But, 1942 also included a positive event when a 10-ton electric
arc furnace was introduced for the manufacture of specialty steel.
This technology was basically the same as that of the electric arc
furnace commissioned in 1989.
At the end of the war, Canada found itself with a large fleet of
modern ships at its disposal. Rather then operate its own merchant
navy, they sold them off. Dosco purchased three of these ships for
$1.00 each and they served the company well for the next 18 years
transporting ore and limestone from Newfoundland.
In 1947, Dosco was one of the major steel plants in North America.
Union – company negotiations were carried out in Canada in
a group known as the Big Three: Dosco, Algoma and Stelco. A strike
occurred at Sydney and was not settled until the Sydney workers
received the same pay as the other major Canadian steel industries.
However, this was the last time Sydney workers negotiated along
with their fellow workers in other parts of the country.
#1 Blast Furnace was commissioned in 1947 and bunker C oil was now
used to fire the Open Hearth furnaces instead of producer gas.
The 1940’s and 1950’s were profitable years and the
plant employed an average of 5400 people. A look at the plant in
- A profitable plant with the potential of 1,000,000-ton yearly
- 120 modern Coke Ovens with product recovery
- 3 Blast Furnaces
- Six 200-ton Open Hearths
- 700-ton metal mixer
- Blooming and Billet Mill
- Rod and Bar Mill
- Wire and Nail Mill
An important development took place in 1957. This was the construction
of a coal blending and treatment plant at the Coke Ovens. Now imported
coal of low sulfur content could be blended with local coal thus
lowering the sulfur content of iron produced at the Blast Furnace.
The highlight, (or lowlight from today’s perspective), of
1957 was the sale of Dosco to the British conglomerate Hawker Siddeley.
This company produced everything from aircrafts to refrigerators
and, almost all shareholders forecast a bright future for the Sydney
Steel Plant. The only dissenter was Frank Sobey who owned 20% of
the shares. He said that Hawker Siddeley had a poor corporate record
in Canada and, it was not in the local community’s best interest
to sell to them. However, most people dismissed this as sour grapes
and a case of his own self-interest over that of the community.
It soon became apparent that Hawker Siddeley was not interested
in making steel, only in making money. When capital investment was
needed to repair or modernize, their policy was to shut it down
or sell it. Case in point was the Wire and Nail Mills. They sold
the Nail Mill and closed the Wire Mill rather then spend money on
A few positive things did happen during the Hawker Siddeley years,
however. Oxygen lancing was introduced into the Open Hearths, which
reduced the time needed to produce a heat by half. Also, a very
efficient stock unloader was built. The Wabana Mines were closed
in 1966 and a much higher grade of iron ore was imported from Quebec.
Finally, after 60 years, the steel plant had good control over the
impurities from iron ore. Only 20% of the coal being used was from
the Cape Breton coalfield and this was blended with low sulphur
During the 1960’s the local steel industry went into another
bust cycle. Hawker Siddeley’s answer to this was massive layoffs
and closure of operations. By 1967 the plant was losing money. Hawker
Siddeley told the Provincial Government that if they would supply
the money to modernize, they would guarantee 25 more years of operation.
This was met with a dim view. The Government made it quite clear
that they were not in the business of financing major conglomerates.
On October 13th, 1967 (The infamous Black Friday), Hawker Siddeley
dropped a bombshell on Sydney. They announced that they were closing
the Sydney Plant permanently as of April, 1968. This caught not
only the Provincial Government by surprise, but the whole community
The community rallied together and a massive “Parade of Concern”
in November convinced the Provincial Government to take over the
operation of the Sydney Steel Plant and operate it as a crown corporation.
iIn January of 1968, the plant became the property of the Provincial
Government of Nova Scotia and became known as the Sydney Steel Corporation,
In 1969 the steel industry was back in a brief boom cycle and, for
the first time in history 1,000,000 tons of steel was produced.
The company also paid an employee’s dividend for the only
time in its history. This convinced the Government to make a capital
investment in the modernization of the aging mill. 92 million dollars
was invested and new equipment included a modern rail finishing
Mill, which went into operation in 1973. A Continuous Caster was
commissioned in 1975 as part of the modernization. It operated intermittently
for six years and, although it proved to be an excellent piece of
equipment, it never reached its full potential because it was not
co-ordinated with a Basic Oxygen Furnace. The old tilting Open Hearth
Furnaces were never able to supply it on consistent bases.
By the mid 1970’s Sysco was back in a bust cycle from which
it never recovered. By now Sysco was basically only producing rails.
The Billet Mill still operated but its days were numbered. Still,
optimism reigned that the plant could be salvaged. A multi- million
dollar two-phase modernization was begun. A new Blast Furnace was
built and went into operation in 1984. It never operated at full
capacity because the Open Hearths couldn’t handle the iron
By 1982 the plant was in dire shape financially. A misguided walkout
prior to a legal strike occurred. When Sysco informed the rank and
file of the blank order books, they returned to work and were then
laid off for the summer. Unfortunately, 3300 workers had walked
out and only 1200 ever returned.
It was now realized that Sysco would never operate economically
as the large integrated plant it had been in the past. It was decided
that it would become a mini-mill operation with direct reduction
of scrap in an electric arc furnace. This would feed a continuous
bloom caster, and thence to a reheat furnace before rolling of rail
products in a universal mill. This was the second phase of the modernization
period and was completed in 1989.
The Coke Ovens closed in 1988, followed by the Open Hearths and
Blast Furnace in 1989.
In 1990 the Provincial Government wrote off the plant deficit of
786 million dollars. They announced that the modernized plant must
now show a profit in order to keep operating and that a private
buyer would be sought.
MinMetals of China agreed to operate the plant as a joint venture
with the government in 1993, leading to their purchase of the whole
operation in three years. By this time, only up to 600 employees
were working spasmodically and 203 million more dollars of debt
had accumulated. In 1996 MinMetals withdrew from their agreement
to purchase the plant. For the next few years the government sought
another buyer but, no legitimate purchaser evolved
In 1999 the Progressive Conservative party ran in the election
with their main platform being the closure of Sysco. This secured
the Nova Scotia mainland vote for them and led to their election.
On May 22, 2000, the last rail was rolled at the Sydney Steel Plant.
Not long after this the Progressive Conservative government, citing
the lack of a legitimate buyer, closed the Sydney Steel Corporation.
For 100 years Sydney advertised itself as the steel capital of Eastern
Canada. For all its problems, it was certainly a very positive industry
for not only the community, but for its contributions during both
halves of the Great War of the 20th Century. If there is one thing
that can be said of the plant, it is that through good and bad times
it was never dull, always interesting – an exciting time to
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Final Report Skills Adjustment Study Beaton Institute
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