La. budget includes funding for steel plant

Published 12:00 am Saturday, April 10, 2010



BATON ROUGE – Gov. Bobby Jindal’s capital outlay construction budget for 2010 includes $65 million in state funds for a proposed pig iron plant in St. James Parish.

State economic development officials say the funding is part of an incentive package to entice North Carolina’s Nucor Corp. to construct their proposed steel plant in Louisiana. The company has narrowed its decision down to the St. James site on the Mississippi River in Convent or a similar site in Brazil. Company officials say they are very close to a decision.

State Economic Development Secretary Stephen Moret said the money would complete a portion of the incentive package for the project. He said the state is “cautiously optimistic” the plant will come to Louisiana.

In addition to funds from the construction budget, Moret said the state also has access to a “megafund” for economic development projects like the Nucor plant. The fund was created under the administration of former Gov. Kathleen Blanco and currently has a balance of about $56 million.

Moret said the state would access the “megafund” but would not offer any further details regarding other incentives offered to Nucor until after the company has made a location decision.

Jindal said in a news release the money would be used for “site, infrastructure and facility development pertaining to the Nucor project.”

The capital outlay budget is filed every year as House Bill 2. As of press time Friday, the bill was still pending referral from the House.

The St. James site slated for the $3 billion plant is a 4,000-acre tract of land situated south of Louisiana Highway 3125 and east of Louisiana Highway 70. Moret said Nucor recently completed purchase of nearly 90 percent of the land at a cost of about $50.3 million, a positive sign the company is considering the site.

“We rarely see a company put forth that much money to purchase land if a project is not moving forward,” Moret said. “It is a good sign in our favor.”

The state had originally hoped to land the plant in 2008, but a drop in demand for steel and possible new federal environmental regulations prompted concerns from the company about moving forward.

Nucor Chairman Dan DiMicco has said federal legislation involving a system of capping emissions and trading carbon credits would produce added costs to domestic steel manufacturing. He said the national economic downturn added an additional concern.

The state Department of Environmental Quality has scheduled a public hearing on the project’s air permit application for Aug. 15 at the St. James Parish Courthouse. Moret said a decision from Nucor could come once the permit is approved some time this summer.

If Nucor chooses Louisiana, and all phases of the project are fully implemented, it would create over 1,250 direct permanent jobs with an annual payroll of nearly $95 million plus benefits. It would become a total capital investment of approximately $4 billion. The plant would supply material for Nucor’s mini-steel mills throughout the southeast U.S.