Steel Mills

Nucor to Resume Louisiana DRI Production at End of January

January 7, 2016

Nucor announced it will resume operations at its direct reduced iron (DRI) plant in Louisiana at the end of January. Operations were suspended at the end of last year due to market conditions following a scheduled maintenance outage.

The company said in a statement: “Nucor’s raw materials strategy is built on flexibility, with the company constantly evaluating the market for the lowest cost raw material inputs at the quality levels our customers need. Changes in the raw materials market led to the decision to restart plant operations.”

Nucor was expected to proceed with four additional phases of the $3.4 billion iron and steel plant in St. James Parish after completing the DRI facility in December 2013. Louisiana Economic Development provided $30 million in incentives for the first phase and as well an additional $30 million in state-funded bonds to be converted to a performance-based grant for the second phase of construction.

Nucor missed a Dec. 31, 2015 deadline to provide a decision to the state on whether it will proceed with the final four phases. The company cited uncertain market conditions for delaying its decision.

“At this time, Nucor has not committed to final plans for potential future phases at our site in Louisiana. Given the challenging conditions in the global steel market, we continue to assess our options and evaluate the best long-term opportunities for our company, teammates and shareholders,” said Nucor in an emailed statement. “Nucor will continue to work closely with state officials, and we will honor the commitments we made in our agreement with the state of Louisiana.”

“We remain confident in our investment and the long-term value owning our own DRI production provides us,” continued Nucor. “Having the capability to produce our own DRI gives Nucor an unrivaled position of flexibility in optimizing our iron unit costs, and our 170 Louisiana teammates have, and will continue to produce DRI at world-class quality levels.”

A statement from Louisiana Economic Development indicated the State of Louisiana and Nucor continue to “maintain a positive dialogue” regarding existing and potential future investments.

“Absent a final investment decision on an additional phase by Dec. 31, 2015, Nucor will continue to repay the $30 million in bonds, and the state and company obligations for future phases—as outlined in a September 2010 cooperative endeavor agreement—will not be in force,” concludes a statement by the LED. “Commitments will remain in force for the initial DRI phase, and the state will continue to engage Nucor in discussions, with a goal of adding economic value for all parties.”