Nucor Corporation Wednesday announced that it has selected St. James Parish, Louisiana, for the construction of a planned $750 million iron making facility, subject to receipt of all requisite environmental permits. The new facility will be owned and operated by Nucor Steel Louisiana, LLC, a wholly-owned indirect subsidiary of Nucor.
Over the past several years, Nucor evaluated multiple sites both in the US and abroad. The St. James Parish site was selected for many reasons, including a very capable work force and the commitment of state and local officials to this project. State and local officials have strongly supported the project, as reflected by both the State's tireless efforts to attract Nucor and the enthusiastic reception by the people of St. James Parish.
"This facility will create good jobs for American workers and, at the same time, it will help Nucor achieve our long-term goal of increasing control over our raw materials supply," said Nucor Chairman and CEO Daniel R. DiMicco.
Governor Bobby Jindal said, "This is a huge win for our state and will ultimately be one of the largest industrial projects in Louisiana history. Nucor's decision to come to Louisiana instead of anywhere else in the nation or the world is not just a tremendous victory for Louisianians, but it also sends a signal far and wide that Louisiana is the best place for businesses to locate, grow and succeed."
The 2,500,000 tons-per-year iron making facility will use direct reduction technology to convert natural gas and iron ore pellets into high quality direct reduced iron (DRI) used by Nucor's steel mills, along with recycled scrap, in producing numerous high quality steel products such as sheet, plate and special bar quality steel. The DRI facility is the first phase of a multi-phase plan that may include an additional DRI facility, coke plant, blast furnace, pellet plant and steel mill.
The DRI facility was chosen for the first phase of our project, in place of a blast furnace and coke making facility, because it offers a carbon footprint that is one-third of that for the coke oven/blast furnace route for the same volume of product but at less than half the capital cost. While there is some loss/penalty in the "value in use" that will occur from DRI usage at the steel plant versus pig iron usage, the technology improvements that we have introduced and proven at our Trinidad and Tobago DRI plant have significantly reduced that typical penalty. The long-term uncertainty that currently exists on the carbon tax issues in Washington makes this decision a lower risk option at this time.
This project will create a substantial number of quality jobs and it will stimulate the Louisiana economy. The project's first phase will require a $750 million investment and directly create 500 jobs during peak construction. One hundred and fifty permanent Nucor jobs will be created, earning an average annual salary of $75,000, plus benefits; roughly twice the area's median household income. If the additional phases are built, over time Nucor could invest over $3 billion total at the site and increase permanent employment to more than 1,000.
Nucor anticipates issuing prior to year-end approximately $600 million in Gulf Zone Opportunity Bonds to partially fund the capital costs of the project.