CLEVELAND, Nov. 17, 2015 /PRNewswire/ -- Cliffs Natural
Resources Inc. (NYSE: CLF) announced today that it
is temporarily idling iron ore pellet production at its Northshore
Mining operation in Minnesota by
Dec. 1, 2015. The Company stated that
until its domestic customers' blast furnace capacity utilization
rates improve, existing customer demand will be satisfied from its
current pellet inventory.
Lourenco Goncalves, Cliffs'
Chairman, President and Chief Executive Officer, stated, "The
historic high tonnage of foreign steel dumped into the U.S.
continues to negatively impact the steel production levels of our
domestic customers. As our pellet inventory at both Northshore and
United Taconite is adequate to meet current customer demand, we
will be able to optimize our working capital and cash flow by
temporarily idling production at Northshore." Mr. Goncalves added,
"Our pellet inventory is currently at a seasonally, historic high
level. As a result, we are taking this action to work off our
pellet inventory pending receipt of our customers' tonnage
requirements for 2016 which have not been finalized. The resolution
of the trade cases currently filed by the domestic steelmakers
against several countries and covering a broad range of steel
products should bring a positive impact to the domestic market
sometime during the first half of 2016. As soon as the unfairly
traded steel problem subsides and domestic steel production
recovers to normal levels, we will be able to immediately ramp up
iron ore pellet production by bringing idled capacity back to
operation."
Cliffs anticipates that both Northshore and United Taconite
operations will be temporarily idled through the first quarter of
2016. During that time frame, Cliffs will continue to operate
Hibbing Taconite in Minnesota, as
well as the Tilden and
Empire mines in Michigan, at normal rates. The Company will
assess and adjust its production plans as market conditions
improve.
Cliffs is maintaining its previous cash production cost per ton
expectations for 2015, and for 2016 is lowering its cash production
cost expectation to $50 – 55 per ton
and its cash cost of goods sold expectation to $60 - $65 per ton. The cash cost of goods
expectation includes $9 million per
month of idle costs for the Northshore and United Taconite
mines.
Cliffs' Northshore Mining iron ore operation is comprised of a
mine and a taconite pellet processing facility located in
Minnesota. The operation employs
approximately 540 employees. Cliffs will maintain minimal staffing
during the temporary idle for basic maintenance duties and for
on-going work to support the DR-grade pellet trials.
About Cliffs Natural Resources Inc.
Cliffs Natural Resources Inc. is a leading mining and natural
resources company in the United
States. The Company is a major supplier of iron ore pellets
to the North American steel industry from its mines and pellet
plants located in Michigan and Minnesota. Cliffs
also operates an iron ore mining complex in Western Australia.
Additionally, Cliffs produces low-volatile metallurgical coal in
the U.S. from its mines located in Alabama and West
Virginia. Driven by the core values of safety, social,
environmental and capital stewardship, Cliffs' employees endeavor
to provide all stakeholders operating and financial transparency.
News releases and other information on the Company are available
at http://www.cliffsnaturalresources.com.
Forward-Looking Statements
This release contains statements that constitute "forward-looking
statements" within the meaning of the federal securities laws. As a
general matter, forward-looking statements relate to anticipated
trends and expectations rather than historical matters.
Forward-looking statements are subject to uncertainties and factors
relating to Cliffs' operations and business environment that are
difficult to predict and may be beyond our control. Such
uncertainties and factors may cause actual results to differ
materially from those expressed or implied by the forward-looking
statements. These statements speak only as of the date of this
release, and we undertake no ongoing obligation, other than that
imposed by law, to update these statements. Uncertainties and risk
factors that could affect Cliffs' future performance and cause
results to differ from the forward-looking statements in this
release include, but are not limited to: trends affecting our
financial condition, results of operations or future prospects,
particularly the continued volatility of iron ore and coal prices;
availability of capital and our ability to maintain adequate
liquidity; uncertainty or weaknesses in global economic conditions,
including downward pressure on prices caused by oversupply or
imported products, reduced market demand and any change to the
economic growth rate in China; our
ability to reach agreement with our iron ore customers regarding
any modifications to sales contract provisions, renewals or new
arrangements; our ability to maintain appropriate relations with
unions and employees and enter into or renew collective bargaining
agreements on satisfactory terms; the impact of our customers
reducing their steel production or using other methods to produce
steel; our ability to successfully execute an exit option for our
Canadian Entities that minimizes the cash outflows and associated
liabilities of such entities, including the CCAA process; our
ability to successfully identify and consummate any strategic
investments and complete planned divestitures, including with
respect to our North American Coal operating segment; our ability
to successfully diversify our product mix and add new customers
beyond our traditional blast furnace clientele; the outcome of any
contractual disputes with our customers, joint venture partners or
significant energy, material or service providers or any other
litigation or arbitration; the ability of our customers and joint
venture partners to meet their obligations to us on a timely basis
or at all; the impact of price-adjustment factors on our sales
contracts; changes in sales volume or mix; our actual levels of
capital spending; our actual economic iron ore and coal reserves or
reductions in current mineral estimates, including whether any
mineralized material qualifies as a reserve; events or
circumstances that could impair or adversely impact the viability
of a mine and the carrying value of associated assets, as well as
any resulting impairment charges; the results of prefeasibility and
feasibility studies in relation to projects; impacts of existing
and increasing governmental regulation and related costs and
liabilities, including failure to receive or maintain required
operating and environmental permits, approvals, modifications or
other authorization of, or from, any governmental or regulatory
entity and costs related to implementing improvements to ensure
compliance with regulatory changes; our ability to cost-effectively
achieve planned production rates or levels; uncertainties
associated with natural disasters, weather conditions,
unanticipated geological conditions, supply or price of energy,
equipment failures and other unexpected events; adverse changes in
currency values, currency exchange rates, interest rates and tax
laws; risks related to international operations; availability of
capital equipment and component parts; the potential existence of
significant deficiencies or material weakness in our internal
control over financial reporting; problems or uncertainties with
productivity, tons mined, transportation, mine-closure obligations,
environmental liabilities, employee-benefit costs and other risks
of the mining industry; and the risk factors identified in Part I -
Item 1A of our Annual Report on Form 10-K for the year ended
December 31, 2014. The information
contained herein speaks as of the date of this release and may be
superseded by subsequent events. Except as may be required by
applicable securities laws, we do not undertake any obligation to
revise or update any forward-looking statements contained in this
release.
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SOURCE Cliffs Natural Resources Inc.