Nucor Relocates Louisiana Iron Plant to $225 Million Start Up in Trinidad

Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Nucor Corporation (NYSE:NUE)(Charlotte, North Carolina) is building an iron plant at Port Lises, Trinidad, capable of producing 1,200,000 tons of iron per year. The plant will become a subsidiary of Nucor, named Nu Iron. The plant will produce iron by the direct reduction process (DRI), whereby natural gas is passed through a bed of iron ore to reduce iron oxide to iron.

Nucor purchased a shuttered 1.4 million ton per year DRI plant in Convent, Louisiana, from American Iron Reduction, in 2004. This plant, although technologically efficient, was shut down in 1999, due to the high cost of natural gas, which would have accounted for 90% of operating costs, if it were still in operation.

Nucor's plan is to ship this plant to Trinidad, where the cost of natural gas is much lower than in the U.S. Iron ore feedstock for the new Trinidad DRI operation will be shipped from Brazil. The Nu Iron plant will be located at Port Lisas, where there are already docks to unload the ore and to ship the finished iron.

The engineers for the Nu Iron plant are Midrex Company (the designer of the Convent plant) and Lee Young Associates in Trinidad. The construction will be done by a consortium of three Trinidad construction companies.

The total capital cost of the Nu Iron project will be $225 million, including purchase of the Convent plant and moving and erecting the plant. The Nu Iron plant is expected to start operation in mid-2006. At the present time, barges are now being loaded to transport the Convent process equipment to Port Lisas. Minimal capital cost is expected for the transportion and unloading of Brazilian iron ore at Port Lisas.

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