Archive | Cliffs Natural Resources

Junior miner Champion Iron agrees to buy troubled Bloom Lake mine in Quebec – by Peter Koven (National Post – December 11, 2015)

http://business.financialpost.com/

A buyer has finally emerged for the troubled Bloom Lake iron ore mine in Quebec, which was shuttered nearly a year ago after incurring massive losses.

Junior miner Champion Iron Ltd. has won an auction to buy the mine out of bankruptcy protection for $10.5 million. Champion, which has offices in Canada and Australia, will also assume $42.8 million of liabilities as part of the agreement.

“Bloom Lake is considered an exceptional opportunity for Champion, and one that would not have presented itself without the challenges of the current downturn in bulk commodities,” executive chairman Michael O’Keeffe said in a statement. Continue Reading →

Goncalves tirade against the ‘enemy’ – by Kip Keen (Mineweb.com – November 1, 2015)

http://www.mineweb.com/

Who’s myopic in this argument Mr. Goncalves?

Pure ridiculum. Cliffs Natural Resources Chairman and CEO Lourenco Goncalves descended into a xenophobic tirade against China during a Friday conference call in which he warned Australia to choose sides in a world where it was helping an “enemy” build up.

China will “bring Australia down” Goncalves said as he reiterated his position that the big diversifieds are oversupplying the iron ore market. He went so far as to suggest that trade with China was a questionable strategy, noting that he was doing everything he could to separate the Cliffs business from China “since the day I put my feet here.”

At one point during comments he went so far as to implore Australia to rethink its trading with China. “I hope the Australians will continue to question themselves why one or two companies are giving their finite resource away to the Chinese while the Chinese build into a military powerhouse in the South China Sea,” Goncalves said. Continue Reading →

Essar-Cliffs tension at fevered pitch – by Ian Ross (Northern Ontario Business – October 7, 2015)

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North.

Cut off from its iron ore supply, Essar Steel Algoma has filed a request for a temporary restraining order in an Ohio court against Cliffs Natural Resources. In an Oct. 6 news release, Essar said the matter is before a federal judge in Cleveland, Ohio.

“Essar Steel Algoma fully expects Cliffs to honour the supply agreement until such time as the matter has been justly resolved,” the Sault Ste. Marie plate and sheet producer said in a statement.

Hours earlier, Cliffs announced it had halted shipments to Essar by terminating its longstanding agreement to supply Essar with taconite iron ore pellets. The decision took effect Oct. 5.

A spokesperson with Cliffs was unavailable for comment. Essar spokeswoman Brenda Stenta said a “swift ruling” is expected on the matter. “There is no immediate impact to operations.” Continue Reading →

Wabush pensioners angry about prospect of reduced incomes – by Terry Roberts (CBC News Newfoundland – August 18, 2015)

http://www.cbc.ca/news/canada/newfoundland-labrador/

Former mine workers fearful of a hit if Cliffs Natural Resources winds up Canadian operations

Retired workers at the now closed Wabush Mines in Labrador West say they are facing a cut in their pension incomes as their former employer, U.S-based Cliffs Natural Resources, goes through the bankruptcy protection process for its Canadian operations.

More than 100 former workers filed into the Catholic church in Wabush Monday for an information session with pension experts from the provincial government, which oversees the Pensions Benefits Act.

The closed-door meeting lasted nearly three hours into Monday evening, and was described as a tense, emotional affairs as retirees sought answers about the fate of their pensions.

Ron Barron, who worked 27 years at the mine prior to its closure in 2014, said there’s a growing level of frustration, and people want answers. Continue Reading →

Dust from abandoned Cliffs’ mine casts pall over eastern Canadian town – by Mike De Souza (Reuters U.S. – June 19, 2015)

http://www.reuters.com/

OTTAWA – Heavy dust clouds blowing from Cliffs Natural Resources’ abandoned Wabush iron ore mine into a small township in the eastern Canadian province of Newfoundland and Labrador is putting a focus on the liability of miners that seek creditor protection and walk away from assets.

Iron ore and coal miner Cliffs Natural Resources Inc announced in February 2014 it was shutting down its Wabush mine. This year it sought creditor protection for its Canadian assets.

The fate of the deserted mine is in limbo until it is either acquired by a rival or Cliffs is able to restructure and exit creditor protection.

Local residents say the abandoned site has many open pits, with drilling equipment, trucks and other equipment stranded on the site.

“Now that the company has gone into closure, it is very hard to maintain a relationship with them. From a corporate level, we have not heard anything from them in almost a year, if not longer,” said Colin Vardy, mayor of the town of Wabush. Continue Reading →

“Further studies” are sad, shameful – by Russel Noble (Canadian Mining Journal – June/July 2015)

Russell Noble is the editor for the Canadian Mining Journal, Canada’s first mining publication.

I hate to say it but it keeps getting more difficult to remain excited about the prospects for Ontario’s proposed “Ring of Fire.”

Initially when Cliffs Resources pulled its $3.3-billion plug on the project by packing up and going back home to Ohio, I thought the Ontario government’s $1-billion plan to move forward with helping develop the chromite-rich deposit in northwestern Ontario would help save the project.

In fact, I almost started feeling that the government actually recognized that the “Ring of Fire” could be Ontario’s answer to Alberta’s oil sands and that the billion dollars it dangled out there would kick start what should be the largest mining project in the province’s history by attracting more investors.

But now, thanks to the recent federal budget where Ottawa only valued the project as merely a $23-million investment over five years, the Ontario government has found a loop hole for its support too because the billion bucks was: “contingent on matching federal funds.”

In other words, both governments appear to have pretty much given up on the “Ring of Fire” and that’s not only sad, but shameful. Continue Reading →

Quebec prepared to buy rail to help rescue iron-ore mine – by Sonja Elmquist and Frederic Tomesco (Bloomberg News/Montreal Gazette – May 5, 2015)

http://montrealgazette.com/

Quebec is prepared to buy a rail line and port facilities that service a shuttered Cliffs Natural Resources Inc. iron-ore mine to pave the way for the operation to reopen under new owners.

The government also is open to buying 20 percent of the Bloom Lake mine to facilitate a deal, Economy Minister Jacques Daoust said. Purchasing the rail and port facilities could lower the mine’s operating costs by as much as $20 a ton, he said.

“We’re trying to ensure the survival of the mine,” Daoust said Friday in an interview at Bloomberg headquarters in New York. “If the last 20 percent is a problem, I will fix it.”

Cliffs suspended production at Bloom Lake in January and sought creditor protection for the operation. That put pressure on the Quebec government, which wants to boost economic activity in Cote-Nord, a region with 10.7 percent unemployment. Bloom Lake employed about 600 people when it was operational, according to Investissement Quebec, a government agency.

As recently as 2013, Bloom Lake was considered a critical part of Cleveland-based Cliffs’ strategy to build its export business to mitigate its dependence on U.S. customers. Continue Reading →

Cliffs Natural Resources ‘can’t wait’ to exit ‘horrible’ Australian iron ore business – by Peter Ker (Sydney Morning Herald – April 30, 2015)

http://www.smh.com.au/

US miner Cliffs Natural Resources says the seaborne supply of iron ore to China is a “doomed, horrible business”, and declared it can’t wait to finish mining in Western Australia.

Speaking after a decision to cut jobs and close one of its three iron ore pits in Western Australia, Cliffs chief executive Lourenco Goncalves said big miners like BHP Billiton and Rio Tinto were trying to scare the iron ore market into pessimism with their expansion plans, but could no longer afford those expansions.

Cliffs’ Koolyanobbing operations in Western Australia made a slim profit of $0.26 per tonne during the March quarter, and the Cleveland-based company responded by reducing the remaining life of the operation from 4.5 years down to 3.5 years.

“The seaborne market is doomed, is cursed, is a place not to be in. I can’t wait to get out of Australia,” said Mr Goncalves. “As soon as I get to the end of life of mine in Australia, I’m out of there … I can’t wait to get out of the seaborne trade and let the Australians take that horrible business on their own hands.” Continue Reading →

Noront pays more for Cliffs claims – by Carl Clutchey (Thunder Bay Chronicle-Journal – April 29, 2015)

Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

Noront Resources has formally acquired three key chromite deposits in the Ring of Fire, but for a much higher price than what the company had offered earlier this year.

The Toronto-based company said Tuesday it increased its offer to US$27.5 million from $20 million after the previous owner of the properties, Cliffs Natural Resources, “received an unsolicited, competing bid.”
“To ensure maximum value was received for its chromite assets, Cliffs then requested that both parties submit revised final binding offers, at which point Noront increased its offer to $27.5 million,” Noront said in a statement Tuesday.

“We feel $27.5 million is an attractive price for the acquisition of these strategic assets,” said Noront president Alan Coutts. Noront now holds 360 mining claims and roughly 65 per cent (80,000 hectares) of the Ring of Fire mining belt located about 500 kilometres northeast of Thunder Bay.

“The project has value,” observed Thunder Bay-based Ontario Prospectors Association executive director Garry Clark. “It just depends on how long you can sit on it.”

Cleveland-based Cliffs, which noted the increased amount for the chromite properties in a separate news release Tuesday, said the planned sale “is another step in divesting interests in non-core assets.” Continue Reading →

‘Ring of Fire’ asset sale descends into chaos – by Peter Koven (National Post – April 24, 2015)

The National Post is Canada’s second largest national paper.

The sale of prized chromite assets in Northern Ontario’s “Ring of Fire” mineral belt has descended into chaos, according to sources and court filings, with multiple bidders and dissenters and no certainty about the endgame.

The whole mess should be sorted out on Friday, when the Quebec Superior Court will listen to arguments and determine how the contested bidding process should proceed. Until recently, this process did not seem controversial in the least.

On March 23, Noront Resources Ltd. announced a deal to buy the chromite assets from Cliffs Natural Resources Inc. for US$20 million. Cliffs is making a much-publicized retreat from Canada, and sold the assets for a fraction of what it paid to acquire them.

The Noront deal was expected to close in mid-April. But on April 13, Cliffs received a $23 million rival bid for the assets, court filings show, which prompted another round of bidding and a disputed result. Additionally, four First Nations groups are contesting Noront’s takeover and told the Superior Court they are plotting their own bid. (Cliffs’ Canadian unit is currently in creditor protection, meaning everything is being done through the courts.) Continue Reading →

Activist leads America’s biggest iron miner out of Ring of Fire, but not danger – by Stephen Gandel (Fortune Magazine – April 16, 2015)

https://fortune.com/

Hedge fund Casablanca Capital took over mining company Cliffs Natural eight months ago. So far, it’s not going so well.

These days, activist investors paint themselves as Wall Street’s turnaround specialists. Activists’ track record at getting companies to boost their share buyback programs, hand over board seats, or put themselves up for sale has been impressive. But when it comes to actually turning around a troubled company, or steering a company away from trouble, the jury on activism is still out.

Last July, activist hedge fund Casablanca Capital won control of the board of mining company Cliffs Natural Resources CLF -3.63% after a six-month proxy fight. Days later, the hedge fund installed a new CEO and said that it had a new strategy to increase shareholder value. Eight-and-a-half months later, Cliffs’ stock has plunged 69%. So much for increasing shareholder value.

To be sure, Casablanca’s biggest problem has been commodities prices, which are out of the hedge fund’s control. Cliffs is the largest U.S. miner of iron. And iron prices in 2014 fell nearly 50% in 2014. That drop has taken Cliffs’ cashflow with it.

But Cliffs was also over leveraged. And it may have tried to do too much too soon. The hedge fund may have also underestimated how hard it would be to compete against its larger and more diversified competitors, such as Rio Tinta Group and BHP Billiton. Continue Reading →

Cliffs to put mines, rails, ports up for sale in Quebec, N.L. (CBC News Business – April 7, 2015)

http://www.cbc.ca/news/business

Mine company under bankruptcy court protection as it completes its exit from Eastern Canada

The Canadian Press – Idled Quebec iron ore mines, railways and port facilities, are about to be put up for sale as part of a court-supervised exit from eastern Canada by Cliffs Natural Resources.

The Cleveland-based mining company’s subsidiaries, which filed for creditor protection in January, are seeking a Quebec court’s permission to solicit interest next month in the Bloom Lake mine, the Wabush Mine, and related port and rail assets in Quebec and Labrador, according to a motion filed by monitor FTI Consulting Canada.

Bloom Lake General Partner Ltd. and affiliates such as Cliffs Quebec Iron Mining filed for protection under the Companies’ Creditors Arrangement Act amid falling iron ore prices.

Excluded from the sale process are Cliffs’ chromite assets in Ontario’s Ring of Fire that are in the process of being sold to Noront Resources for $20 million US. Continue Reading →

Ring of Fire still emerging – Editorial (Thunder Bay Chronicle-Journal – March 26, 2015)

Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

When the bottom fell out of iron-ore giant Cliffs Natural Resources last year and the company’s big plans for Northern Ontario began to unravel, a competitor remarked that development in the Ring of Fire would still happen one day, “not just on Cliffs’ timetable.”

The remark was unfair because, up until the fall of 2013, Cliffs was the real deal: It had spent $500 million in pre-development work on its RoF properties, and was very close to operating the remote region’s first mine.

Few will forget Cliffs’ thoughtful RoF point-man, Bill Boor, especially his candour and willingness to field questions from all comers.

But many got carried away by the idea that Cleveland-based Cliffs, an established company that floated the prospect of 1,000-plus jobs, could pull it off, even as metal prices dropped.

Earlier this week, Noront Resources announced the move that many expected — the potential purchase of Cliffs’ RoF properties. The US$20 million deal, which includes the big Black Thor chromite deposit, is expected to close next month.

In announcing the plan, Noront president Alan Coutts wisely cautioned against any expectations that his company would be able to quickly pick up where Cliffs left off. Continue Reading →

Cliffs Natural Resources-Noront Resources deal puts new Sudbury smelter in limbo (CBC News Sudbury – March 24, 2015)

http://www.cbc.ca/news/canada/sudbury

Smelter plant hinged on yet to be negotiated power rates, tax dollars to access Ring of Fire

A proposal for a new smelter in Sudbury has been pushed further into limbo after Cliffs Natural Resources announced a deal to sell off its Ring of Fire assets.

The Cleveland-based company said Monday it had entered into a definitive agreement with Noront Resources to purchase its chromite deposits and associated claims for $20 million.

Then Sudbury MPP Rick Bartolucci announced in 2012 that Cliffs would be building a smelter in Capreol, north of Sudbury, to process the chromite it mined in the far north — along with hundreds of jobs. The company even started taking job applications.

However, the new plant hinged on yet to be negotiated power rates, as well as tax dollars, to access the remote Ring of Fire. Neither issue has been settled since. With the sale of Cliffs’ chromite assets and associated claims to Noront Resources, the ball is effectively in Noront’s park.

However, CEO Al Coutts said the company is focusing on mining at this point — not smelting. Continue Reading →

Crummy chromite investment – by Kip Keen (Mineweb.com – March 24, 2015)

http://www.mineweb.com/

Cliffs exits the Ring of Fire.

So ends Cliffs Natural Resources’ adventure in Northern Ontario with the miner announcing that it has a buyer for its Canadian chromite projects. It was an expensive one.

A half-decade ago Cliffs paid some C$350 million in cash and shares to buy majority control of a series of then newly discovered chromite deposits. They were heralded as world-class with potential to supply the North American steel markets especially.

In 2009 and 2010 Cliffs struck deals to buy the juniors involved in the discoveries. It bought Freewest Resources for about C$240 million (in shares at the time). Then it bought up Spider Resources in 2010 for C$125 million (cash).

These were the juniors that put the region on the map – the so-called Ring of Fire. The potential was often billed as huge – a nebulous ~$60 billion or so in deposit value.

The region garnered promises from the Ontario government especially for major spending on infrastructure. For it was remote and would require new road access hundreds of kilometres long through bush and First Nations territory. Continue Reading →