Nationalization
On December 1, 1967, the provincial government established Sydney Steel Corporation (SYSCO) under an act of the provincial legislature. to operate DOSCO's steel mill for a period of 12 months until the steel mill could be resold to another private operator.
On March 30, 1968 DEVCO expropriated DOSCO's coal mines and the Sydney and Louisburg Railway, settling for a payment of $12 million. The federal government's plans to gradually shut down coal operations during the 1970s were derailed by rising world energy prices and changes in political priorities. Similarly, the provincial government's 1-year temporary commitment to transitioning ownership of the steel mill from DOSCO turned into a 33-year commitment, adding over $1 billion to the cash-strapped province's debt.
SYSCO became a political football for economically depressed Industrial Cape Breton and no provincial government dared to shut it down, opting instead to use heavily-subsidized federally produced DEVCO coal for coking fuel to continue running the antiquated mill. Over time, the provincial government gave limited capital investments to SYSCO from the late 1970s into the early 1980s. In the mid-1980s the provincial government of premier John Buchanan decided to modernize the steel mill prior to selling it to the private sector. This modernization changed the steel making process from a fully integrated oxygen blast plant using iron ore into an electric arc mini mill using scrap steel. The blast process fuelled by coke was mothballed in favour of using electricity to smelt the scrap recycled metal brought in by rail.
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