Cliffs Natural Resources delays massive iron ore projects
Cliffs Natural Resources (NYSE:CLF), U.S.’ s largest producer of iron-ore pellets, said Monday it would delay mine expansion in Quebec as well as a portion of production at two of its operations in the U.S., as a result of weak commodity prices.
The announcement drove the company’s shares down 1.25% to $34.89 cents at 12:48 EST.
The projects affected by the miner’s decision are the Bloom Lake mine Phase 2 expansion in Quebec, Canada, as well as the Northshore Mining iron ore operation in Minnesota and at the Empire mine, in Michigan.
The company said the decision put 450 contractors off the job as it stopped work on the concentrator and load out facility at Bloom Lake, however pre-stripping would continue.
Cliffs also said it was adjusting its 2013 operating plans for its North American iron-ore businesses to align with expected sales volumes. Increased iron ore pricing volatility and lower North American steelmaking utilization rates drove these production decreases.
"Disciplined capital allocation is core to our operating strategy and reducing higher cost production will enhance our financial flexibility in both the short and longer term. Despite today's announcement, we are still committed to our investments in Canada and believe Bloom Lake will deliver significant long-term value over time,” Cliffs chairperson and CEO Joseph Carrabba said.
Expected sales volumes for U.S. iron ore remain in 2012 were unchanged at 19 million to 20 million tons.