Gerdau Ameristeel Announces Closure of Melt Shop at New Jersey Mill

Gerdau Ameristeel Corporation has announced that it plans to close the melt shop operations at its Perth Amboy, New Jersey wire rod mill early in the fourth quarter of 2006. The Company plans to continue operating the Perth Amboy rolling mill at its current production level of approximately 500,000 tons of finished wire rod annually. After closure of the melt shop, semi-finished steel billets will be more efficiently supplied to the Perth Amboy rolling mill from available billet making capacity at other Gerdau Ameristeel melt shop operations. Higher grade billets will also be supplied from Gerdau Ameristeel's majority shareholder Gerdau SA in Brazil and other third party billet suppliers.

The closure of the melt shop operations will result in an estimated $27 million after tax charge (approximately 9 cents per share) to third quarter 2006 earnings. Most of the charge, approximately $23 million, is a non-cash charge to write off the book value of the melt shop buildings and equipment. Approximately $4 million is cash costs for severance and take or pay contract settlements.

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