MARQUETTE – The top executive for Cliffs Natural Resources said Wednesday the mining company continues to pursue a “rock solid” revitalization strategy of shutting down and selling off its diverse assets elsewhere, reducing debt, and focusing on iron ore production in the Upper Great Lakes region.
“We are back to basics,” said Lourenco Goncalves, Cliffs’ chairman, president and chief executive officer. “We are back to our business, to our real business, the business that made Cliffs a big company, the business that made Cliffs a powerhouse in the United States and abroad and that is producing iron ore in Michigan and Minnesota and that’s it. That’s our business.”
From coal to chromite, from Australia to Canada and the southeastern United States, under previous board management, Cliffs diversified and expanded.
“Everything else was done through a strategy that was not the best one for the company – that was not the best one for the community that the company serves,” he said. “Lots of money was spent and wasted in bad investments we’re correcting all that.”
Goncalves said Cliffs’ now realizes those “mistakes of the past.”
“It was not an easy process for the company to recognize that,” he said. “We, actually as shareholders, and I was a shareholder, from the outside, we had to wage a proxy war last year to be able to be here today and we had to basically take down an entire entrenched board that was destroying Cliffs. But this is all in the past.”
Goncalves, a native of Brazil, was appointed to his three top posts at Cliffs in August, shortly after the hedge fund Casablanca Capital announced it had placed Goncalves and five more of its director nominees on Cliffs’ 11-member board, effectively giving Casablanca control of the company.
Since that time, change has been a constant at the new Cliffs.
“I’m very concerned about the present and very concerned about the future and I see a very strong present, in which we already paid down more than half a billion dollars in debt in less than six months, in an environment that’s not the perfect environment for the business from the price perspective,” Goncalves said.
Company debt has shrunk from $3.3 billion to $2.6 billion.
Goncalves said in the short-term the best indicator of the health of the company is its financial stability, ability to pay its bills and dramatically continue to reduce debt, which was added to the company through that flawed expansion strategy.
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