St. James officials hope new steel mill prospect scores

Published 12:00 am Tuesday, June 10, 2008


Staff Reporter

CONVENT – To the causal observer, Convent, La., and Brazil’s eastern seaboard may seem an unlikely association.

But to Nucor Corp., a North Carolina-based steelmaker that last month filed permits to build a $2 billion pig iron complex in St. James Parish, the differences may appear more subtle these days.

To be sure, Nucor will spend the next two months deciding just how different the two locations are, and more importantly, which site is best suited to host the iron-making facility it needs to feed its flat product mini-mills throughout the country.

St. James Parish and Louisiana officials in the meantime are doing everything they can to make Nucor’s decision a little easier. Nucor has acknowledged Louisiana’s infrastructure improvements in the area and heralded the location along the Mississippi River, but a juicy incentive package might be needed to seal the deal.

Gov. Bobby Jindal in a statement said the Nucor steel mill “would provide a tremendous boost to Louisiana’s economic development,” and the mill would generate up to 500 permanent jobs.

But hopes about the potential economic impact in St. James have been tempered by the project’s striking resemblance to a similar deal that fell through just last year.

Louisiana spent $3 million over 15 months courting ThyssenKrupp AG, the German steelmaker that had targeted nearly the same land for a steel mill, only to be jilted at the last minute. St. James was left with only hurt feelings, as ThyssenKrupp preferred a site just north of Mobile, Al., for its $3.7 billion mega-project.

That steel mill was expected to generate 2,700 permanent jobs.

While remaining “cautiously optimistic,” officials in St. James have been rallying local support for the new deal, which they said is essential to winning the Nucor mill.

St. James Parish President Dale Hymel said the parish school board and other organizations have been drafting letters to endorse Nucor’s plans.

“Nucor would like to feel like the community is going to accept them,” he said.

Joel T. Chaisson, executive director of the Port of South Louisiana, which is involved in the negotiations and owns part of the land Nucor has targeted, echoed Hymel’s assessment.

“It is my belief that the desire of the Louisiana and St. James people to have such a facility in the area is key,” he said in an email interview. “Being the optimistic person that I am, I feel that if all of the entities – local, state and the Port – work together that there is no finer site in the United States for such a facility.”

Nucor seems to agree.

Its permit application shows it ruled out other sites stateside before deeming Convent the only remaining possibility in the U.S.

But the question remains whether Nucor’s plans would be better executed elsewhere.    

Nucor has kept a tight lid on its options during the negotiating and analyzing phase, vaguely referring to “sites outside the U.S.” and has so far declined to elaborate on possibilities it says remain “under active consideration.”

But while Nucor isn’t talking, others are.

Hymel and Chaisson said Brazil is the only other country to factor into the equation.

What’s more, a financial newspaper in Brazil, Jornal do Commercio, reported as early as August of last year that Nucor had discussed a similar $3 billion project with officials at MMX Mineração e Metálicos, an iron ore miner based in Brazil. The newspaper called Brazil a “strong candidate” for the project and listed a few plausible sites along the coast.  

Repeated efforts to contact MMX were unsuccessful.

Nucor also did not respond to requests for comment.

Chaisson and Louisiana Economic Development, the state agency assembling the incentive package for Nucor, have also declined to divulge many details of the negotiation, citing confidentiality.

But Hymel said the package would be less this time around and that he was trying to manage expectations in the parish “so people don’t get their hopes too high.”

Hymel said energy costs were a determining factor in last year’s disappointment but pointed out that Nucor’s facility would represent a stark contrast to ThyssenKrupp’s: Nucor, by way of capturing waste heat, would produce more energy than it would use and even sell some of it back to Entergy.

The energy costs proved a major stumbling block for St. James Parish as ThyssenKrupp would have had to spend an additional $261 million on new transmission lines had they chosen Louisiana over Alabama.

Nevertheless, Hymel said ThyssenKrupp benefited from, “playing one state against the other.”

This time, Louisiana has millions left over from trying to entice the Germans, and some officials have sounded confident in the parish’s chances.

“I’m always optimistic, but I have a better gut feeling this time around,” Hymel said. “We’ve been through this ball game before.”