Jindal: Nucor picks Louisiana site for $3.5B iron plant project to be built in 5 phases

Jindal: Nucor picks Louisiana for $3.5B project

GRAMERCY, La. — Steelmaker Nucor Corp. chose a site in St. James Parish for a $3.5 billion iron plant project that will be built in five phases, Gov. Bobby Jindal and company officials announced Wednesday.

The first phase of the project is a $750 million direct reduced iron facility that will create 150 jobs. Future phases, according to Nucor, will include a second DRI facility, a pig iron blast furnace, coke ovens and, ultimately, a steel mill itself.

“This is a long-term investment,” Jindal said during a news conference. “It is not about the next six months or the next year.”

John Ferriola, Nucor’s chief operating officer, said the initial pig iron blast furnace project has been pushed back because of concerns about climate-control legislation, particularly “cap-and-trade” legislation, that is now before Congress.

Ferriola said DRI facilities, which are fired by natural gas, have fewer emissions than the coke-fired blast furnace. Coke emissions might be covered under the “cap-and-trade” discussions, he said, noting that future phases of the project will depend on what happens with the climate legislation.

Jindal said that cap-and-trade talk could restrict this and other projects.

“The mere talk of cap-and-trade is causing companies to slow down and start looking overseas,” Jindal said.

Ferriola said the Charlotte, N.C.-based company must modify its state air and water quality permits that already have been granted for the proposed blast furnace before work can begin on the DRI project. However, he said, he anticipates no problem in getting those changes approved because DRIs have lower emissions.

He said he hopes the permit changes will be in place by the end of year. From the point of approval, he said, it will take about 24 months before the facility is up and running.

If all five phases are completed, Ferriola said that will eventually mean 1,250 jobs for the state and a $3.4 billion in capital investment from Nucor, a specialty steel manufacturer that needs both kinds of iron — recycled scrap and refined iron ore — for their products.

The company said the jobs would pay an average of $75,000 per year. Median income in Louisiana is around $28,000.

Nucor already has spent $50 million buying nearly 4,000 acres on the Mississippi River. The company also had been considering a site in Brazil.

Jindal said other states and countries also sought the project, but he wouldn’t name any of them.

“This is one of the largest industrial projects in our history,” Jindal said.

In 2007, ThyssenKrupp considered the site for a $3.7 billion steel mill expected to create 2,700 jobs before settling on a location near Mobile, Ala.

Jindal said the project is being financed with a $30 million capital outlay from the state that the State Bond Commission will be asked to approve in October. He said the commission also is expected to discuss dedicating the remaining $600 million in GO-Zone bond capacity to the project when it meets this week.

The state economic development agency said Nucor also will receive grants and loans totaling $160 million over six years, provided that all five phases are completed. Payments will be based on how far the project goes.

Local governments in St. James Parish will provide a 20-year local property tax exemption. In exchange, Nucor will make an annual payment to the parish school system, sheriff’s office and parish government, beginning at $850,000 and increasing to $4.5 million if all five phases are finished.

State economic department head Stephen Moret said the eventual total of the entire project did not change under the revised plan. He said the original plan called for two blast furnaces and a steel mill.

Online:

Nucor Corp.: www.nucor.com/

LED GO-Zone bonds: www.louisianaeconomicdevelopment.com/opportunities/incentives–programs/gulf-opportunity-zone.aspx