LSB Industries Inc. said Tuesday it will spend $120 million to build a new chemical plant in Arkansas.
The Oklahoma City-based chemicals and manufacturing company said its El Dorado, Ark., chemical plant signed an agreement with Weatherly Inc. to build a nitric acid plant. The factory is expected to produce up to 1,110 tons per day of 65 percent-strength nitric acid when it opens in mid-2015.
LSB said a “significant portion” of the $120 million cost of the plant and related equipment will come from an expected insurance settlement. The El Dorado plant sustained an explosion in May that damaged a nitric acid plant.
The company said it is negotiating a contract to buy a concentrator for the planned nitric acid plant that will concentrate a portion of its output to 98.5 percent strength. LSB also said it has resumed production of sulfuric acid at the El Dorado plant.
“All of the plants at the El Dorado facility are up and running, other than the (direct-strength nitric) plant, which is being replaced by the new Weatherly nitric acid plant,” said Jack Golsen, LSB's chairman and chief executive officer. “With the addition of a new nitric acid plant and concentrator, we believe that the El Dorado facility will be able to regain its position as a leading merchant marketer of concentrated nitric acid in the United States.”
Nitric acid blends are used in a variety of applications, including semiconductors, herbicides, pesticides and metal treatment.
LSB shares rose 29 cents to close at $33.23 in Tuesday trading on the New York Stock Exchange.