Cliffs to re-open Minnesota mine
Cliffs Natural Resources Inc. (NYSE: CLF), North America's largest iron ore miner announced on Monday that it will be restarting iron ore pellet production at its Northshore Mining operation in Minnesota within two months.
Cleveland-Ohio based Cliffs, which has annual capacity of over 25 million tons of iron ore ore, said it's restarting operations at the mine and a taconite pellet processing facility "based on its domestic customers' demand for iron ore pellets and consistent with its previously announced production plans for the year."
"With the trade cases approaching their final stages and preliminary duties being announced, the volume of unfairly traded steel is starting to subside"
The operation employs approximately 540 workers. The company also said its Hibbing Taconite mine in Minnesota, as well as the Tilden and Empire mines in Michigan are operating at normal rates. Cliffs' United Taconite operations in Minnesota are currently idled.
Lourenco Goncalves, Cliffs' Chairman, President and Chief Executive Officer, said:
"The avalanche of unfairly traded steel hitting the U.S. since last year negatively affected our clients' production levels and, as a consequence, affected us. At this time, with the trade cases approaching their final stages and preliminary duties being announced, the volume of unfairly traded steel is starting to subside. As our clients' order books improve and their need for pellets approach more normal levels, we are pleased to announce that we are bringing back to work our dedicated employees at Northshore."
Cliffs is maintaining its previous cash production cost per ton expectations for 2016 at $50 to $55 per ton and its cash cost of goods sold expectation is $55 to $60 per ton.
The company also participates in the seaborne iron ore markets through a subsidiary in Australia. The benchmark Northern Chinese import price was pegged at $55.50 per metric tonne on Monday, down more than 1% on the day but holding onto gains of 29% since the start of the year.
Cliffs' 2016 full-year production target is way below capacity at 16 million tons after its Bloom Lake operations in Canada went into receivership and its Wabush operations in the country was permanently closed. Bloom Lake was sold for just over $50 million in December last year. That compares to a purchase price of $4.9 billion paid by Cliffs in 2011, when the price of iron ore peaked at $190 a tonne.