CONVENT, La. — The head of Nucor Corp. said Monday that plentiful natural gas supplies made it possible for the steelmaker to set up shop in Louisiana and offer the prospect of creating thousands of jobs by providing a reliable energy source for domestic manufacturing.
After a groundbreaking ceremony at the site of Nucor's $750 million ironmaking plant in St. James Parish, Nucor chief executive Dan DiMicco also warned that skyrocketing oil prices could curtail a shaky recovery for an economy where the jobless rate is still 8.9 percent more than two years after the financial meltdown.
"When you see oil getting at a level that is unsupportable, it is not good for the economy," DiMicco said. "We are still in a recession."
But DiMicco said that under current economic scenarios, he still envisioned Charlotte, N.C.-based Nucor building all five scheduled phases of its Louisiana project, eventually totaling $3.4 billion in investments and 1,250 jobs averaging $75,000 per year.
"We didn't get into this just to put an iron plant here," he said.
The first phase of the project, which DiMicco said would begin engineering and construction as quickly as possible, will produce iron for use in steelmaking at Nucor mills. About 500 construction workers will be involved and the plant will employ 150, DiMicco said.
The second phase would be another iron producing plant costing $400 million, followed by a $500 million pellet plant, $1 billion for a blast furnace and coke ovens and a $700 million steel mill. All five phases would result in one of the largest industrial projects in Louisiana history.
DiMicco, whose company considered other sites, including one in Brazil, said it would not have been possible to build the complex in Louisiana several years ago when natural gas prices skyrocketed under shaky supplies.
With record-large gas supplies on hand because of shale drilling, the federal government needs to encourage the use of the fuel and capital investment in manufacturing projects that will build products for sale overseas "rather than ship jobs overseas," DiMicco said.
Gov. Bobby Jindal said that Nucor and other large manufacturing projects would help reverse the population loss that Louisiana has sustained over the past 25 years. He predicted that Nucor would attract more businesses to southeastern Louisiana and more people.
"Looking down the road 30 years, this will be looked upon as a project that changed the face of St. James Parish," said parish President Dale Hymel.