Cliffs Natural Resources to Reopen Minnesota Mine Early
June 09 2016 - 1:10PM
Dow Jones News
Cliffs Natural Resources Inc. said it plans to restart its
United Taconite mining operation in Minnesota during August, two
months earlier than recently expected.
The U.S.'s biggest iron-ore miner cited a contract to supply the
majority of U.S. Steel Canada's iron-ore pellet requirement for the
third and fourth quarters, which also spurred Cliffs to raise its
sales volume and production guidance for 2016.
The moves come after Cliffs on May 31 announced it had reached a
10-year agreement to supply steel giant ArcelorMittal with iron-ore
pellets, which lifted Cliffs stock 39% that day.
Cliffs had temporarily idled the United Taconite and Northshore
Mining operations in Minnesota late last year, citing high levels
of steel imports that had hurt its customers' production rates,
which in turn hurt demand for its iron-ore pellets.
Cliffs said that after it reached its deal with ArcelorMital
that it planned to reopen the United Taconite site in October. The
company previously had announced plans to reopen Northshore Mining
in May.
The company's shares, up 18% in the past week, fell 5.9% to
$5.09 in recent midmorning trading in New York.
For 2016, Cliffs expects sales volume of 18 million tons,
compared with its previous guidance for 17.5 million tons. Its
production forecast was increased by 500,000 tons to a total of
16.5 million tons.
The United Taconite operation, which includes an iron-ore mine
and a pellet-processing plant, employs roughly 450 workers. The
Northshore operations employ about 540 workers.
The mines were among the many industrial facilities in the U.S.
to fall prey last year to a painful downtown in the industrial
commodities sector, driven by a slowdown in Chinese demand, a
collapse of energy prices and the stronger dollar.
Under Chief Executive Lourenco Gonclaves, Cliffs has sold or
shut down operations in Canada and the U.S. to focus on mining in
Michigan and Minnesota, where the company has a geographical
advantage selling to the Midwestern steel mills that supply the
U.S. car industry.
During April, Cliffs reported that it swung to an unexpected
first-quarter profit because of refinancing related to the iron-ore
miner's efforts to improve its balance sheet. Revenue slumped 32%,
but the decline was less than analysts had feared.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
June 09, 2016 12:55 ET (16:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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