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LSB's El Dorado Plant Signs Deal for New Nitric Acid Plant; Closes Reconstruction, Resumes Production at Sulfuric Acid Facility

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LSB Industries (NYSE: LXU) today announced that its chemical business' El Dorado, Arkansas facility (“El Dorado Facility”) has signed an agreement with Weatherly Inc. for the licensing, engineering, and procurement of major manufacturing equipment for a new 1,100 ton per day 65% strength nitric acid plant. The new plant is expected to be operational by mid-2015.

In addition, the Company is currently negotiating a contract for the purchase of a plant to work in conjunction with the new nitric acid plant that further concentrates a portion of the output up to 98.5% strength.

The cost of the new nitric acid plant, the nitric acid concentrator plant and supporting facilities, including construction, is anticipated to total approximately $120 million, a significant portion of which is expected to be paid from insurance proceeds resulting from the May 15, 2012 event that damaged the El Dorado Facility. The amount of insurance proceeds is not known at this time.

The Company also announced today the recommencement of operations at the El Dorado Facility's sulfuric acid plant. This represents the final phase of repair and production recovery at the facility following the May 15, 2012 event, other than the construction of the aforementioned new nitric acid plant and acid concentrator plant.

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