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Cliffs Natural Resources

Beleaguered Cliffs posts Q2 loss, beats expectations – by Henry Lazenby (MiningWeekly.com – July 24, 2014)

http://www.miningweekly.com/page/americas-home

TORONTO (miningweekly.com) – US iron-ore and coal producer Cliffs Natural Resources, which is locked in a proxy fight with an activist shareholder for control of the board, on Wednesday reported a net loss for the three months ended June 30, as lower iron-ore and metallurgical steelmaking coal prices and reduced sales pressured the balance sheet.

The Cleveland, Ohio-based miner reported a loss of $2-million, or $0.01 a share, compared with a net income of $133-million, or $0.82 a share, in the second quarter of 2013.

The year-over-year consolidated revenues were 26% lower at $1.1-billion, mainly impacted by a 24% drop in sales volume from the company’s US iron-ore operations.

Seventeen Wall Street analysts had on average expected a loss of $0.06 a share, based on revenue of $1.17-billion.

The cost of goods sold decreased by 17% to $1-billion, mainly driven by reduced volumes, lower idle costs and favourable foreign exchange rates when compared with the second quarter of 2013.

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NEWS RELEASE: Cliffs Natural Resources Inc. Issues Open Letter to Shareholders

July 07, 2014

  • Casablanca’s Nominees, Including Proposed Executive Chairman Lourenco Goncalves, Lack Crucial Industry Experience Needed to Navigate Today’s Volatile Pricing Environment
  • Cliffs’ Nominees Have the Right Experience to Drive Long-term, Sustainable Growth and Shareholder Value
  • Recommends Shareholders Vote WHITE Proxy Card Today

CLEVELAND – July 7, 2014 – Cliffs Natural Resources Inc. (NYSE: CLF) today issued the following letter to shareholders in connection with its upcoming 2014 Annual Meeting of Shareholders scheduled to be held on July 29, 2014:
Dear Fellow Cliffs Shareholder,

Cliffs’ Annual Meeting of Shareholders is fast approaching and your vote is extremely important. Your Board of Directors is focused on driving value for all shareholders and continuing to position Cliffs for long-term, sustainable growth.

Your Board urges you to vote the enclosed WHITE proxy card “FOR” Cliffs’ nine highly qualified and experienced nominees: Gary B. Halverson, Barry J. Eldridge, Mark E. Gaumond, Susan M. Green, Janice K. Henry, Stephen M. Johnson, James F. Kirsch, Richard K. Riederer and Timothy W. Sullivan.

By using the WHITE proxy card and voting as recommended by your Board, you will help prevent Casablanca from electing a majority slate and breaking up your Company.

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Boardroom battle leaves Cliffs on edge – by Barry Fitzgerald (The Australian – June 30, 2014)

http://www.theaustralian.com.au/

OWNERSHIP of the $1 billion-plus Koolyanobbing iron ore operation in Western Australia could be up for grabs as a result of a bitter boardroom proxy battle at Cliffs Natural Resources.

The ownership issue for the 11 million-tonne-a-year Koolya¬nobbing operation — 50km north of Southern Cross — comes to a head on July 29 at the annual meeting of owner Cliffs, which is based in Cleveland, Ohio.

New York activist hedge fund and 5.2 per cent Cliffs shareholder Casablanca Capital is behind a boardroom shake-up push at the meeting which, if successful, would see Cliffs move to quit its Australian operation. Casablanca wants Cliffs, which is also a coal producer, to focus on its larger and domestic market-based US iron ore business. It wants the seaborne market-exposed Australian assets, and Cliff’s Canadian assets, to go.

The hedge fund argues that Cliffs is too small to compete head to head with the iron ore majors of Rio Tinto, BHP Billiton and Brazil’s Vale in the seaborne markets for iron ore. It has said there are many potential mechanisms for an exit, including a spin-off and a partial or total sale.

The Australian operation should be sold now, it said, as it held the greatest strategic value “today’’ because of its relatively short mine life of about seven years, based on current reserves.

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NEWS RELEASE: Cliffs Natural Resources Inc. Responds to Casablanca

  • Casablanca’s Short-Term Strategy Would Destroy Shareholder Value
  • Casablanca Has Urged Financial Engineering While the Cliffs Board and Management Team Have Implemented Sustainable, Long-Term Financial and Operating Policies to Preserve Viability of Cliffs
  • Casablanca’s Nominees and Proposed CEO Candidate Lack the Crucial Industry Experience Needed to Lead Cliffs in Today’s Volatile Pricing Environment
  • Cliffs Recommends Shareholders Support Value-Enhancing Changes Underway and Vote WHITE Proxy Card Today

CLEVELAND – June 23, 2014 – Cliffs Natural Resources Inc. (NYSE: CLF) today issued a letter to shareholders in connection with its upcoming 2014 Annual Meeting of Shareholders scheduled to be held on July 29, 2014.

The Company issued the following letter to all shareholders:

Dear Fellow Cliffs Shareholder,

As we move closer toward Cliffs’ Annual Meeting of Shareholders scheduled for July 29, 2014, we wanted to provide an important update on instructions to vote “FOR ALL” nine nominees recommended by your Board of Directors.

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NEWS RELEASE: Casablanca Capital Urges Shareholders to Vote for Fundamental Change at Cliffs

Slams Cliffs’ Board for Track Record of Value DestructionAsks Shareholders to Support New Leadership, Vote GOLD Card Today

NEW YORK, June 19, 2014 /PRNewswire/ — Casablanca Capital LP, (“Casablanca”) the beneficial owner of approximately 5.2% of Cliffs Natural Resources Inc. CLF +2.37% , today issued a letter to stockholders in connection with Casablanca’s nomination of six director candidates for election to the Board of Directors at the Company’s upcoming 2014 Annual Meeting of Shareholders on July 29, 2014.

In the letter, Casablanca says the Cliffs’ Board has ‘become a refuge for failed CEOs’ with a track record of value destruction and urges fellow shareholders to vote the GOLD proxy card for Casablanca’s six highly-qualified and independent director nominees in support of change to create value.

Donald Drapkin, Chairman of Casablanca said, “The Cliffs Board is an unmitigated disaster. A majority of its members have not demonstrated a shred of business acumen and do not deserve a single vote. They should not be entrusted to serve on any public company board.”

The full text of the letter, which can be found at www.fixcliffs.com along with other information about Casablanca’s investment in Cliffs, is as follows:

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Cliffs Natural Resources Inc. Issues Open Letter to Shareholders (June 16, 2014)

Urges Shareholders to Support Value-Enhancing Changes Underway and Vote WHITE Proxy Card Today

Files Definitive Proxy Materials and Mails Letter To Shareholders

CLEVELAND – June 16, 2014 – Cliffs Natural Resources Inc. (NYSE: CLF) today announced that it has filed definitive proxy materials with the Securities and Exchange Commission (“SEC”) in connection with its upcoming 2014 Annual Meeting of Shareholders to be held on July 29, 2014. Cliffs shareholders of record at the close of business on June 2, 2014, will be entitled to vote at the Annual Meeting.

Based on discussions with various shareholders, the Board of Directors currently believes that it is in the best interest of all Cliffs shareholders for the Board to nominate a slate of nine directors for its eleven-person Board. The Cliffs Board does not currently intend to nominate Susan M. Cunningham or Andrés R. Gluski for re-election as a director of Cliffs at the 2014 Annual Meeting, and does not currently intend to nominate replacement candidates. As a result, by using the WHITE proxy card and voting as recommended by the Board, we believe that at least two of Casablanca’s proposed nominees will be elected to the Cliffs Board, assuming that Casablanca continues its proxy contest.

The Cliffs Board recommends shareholders use the WHITE proxy card to vote “FOR ALL” of the Company’s nine highly qualified and experienced director nominees with expertise in leading mining, steel, basic materials, engineering and natural resources businesses: Gary B. Halverson, Barry J. Eldridge, Mark E. Gaumond, Susan M. Green, Janice K. Henry, Stephen M. Johnson, James F. Kirsch, Richard K. Riederer and Timothy W. Sullivan.

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Fight to oust Cliffs board just got real ugly – by Frik Els (Mining.com – May 29, 2014)

http://www.mining.com/

Cliffs Natural Resources (NYSE:CLF), the US’ biggest iron ore producer, announced this week that it is reducing capital spending by an additional $100 million on top of the $460 million in cuts already announced.

This led to speculation that Cleveland-based firm could breach certain debt covenants should the weakness in the price of the steelmaking raw material persist.

Cliffs stock was up on Thursday, but investors in the company are nursing a 37% slide in the market value of the company and an exit from the S&P500 index as it tries to cope with a downturn in the market by idling mines in Canada and the US and laying off workers.

Activist investment firm Casablanca Capital launched a bid in January to oust the current Cliffs board and on Wednesday issued another statement calling for drastic changes at the company.

Casablanca, a top shareholder with more than 5% of equity in the miner, called the value destruction at the company “alarming” adding that despite the losses “a majority of the current Cliffs directors, including its chairman, James Kirsch, remain in their seats.”

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Capreol chromite smelter ‘very unlikely’ – by Carol Mulligan (Sudbury Star – May 27, 2014)

  The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

Sudbury Star mining columnist Stan Sudol didn’t mince words about what the sale of the Cliffs’ camp
could mean. “I think this is another indication that Cliffs is a ‘dead man walking’ in the Ring of Fire,”
said Sudol. “The possibility of Cliffs building a furnace in Sudbury is also, unfortunately, very unlikely.”

Noront Resources Ltd. has purchased the exploration camp shuttered by Cliffs Chromite Ontario Inc. late last year when it announced it was indefinitely suspending its activities in the Ring of Fire.

Noront has been talking with the subsidiary of Cleveland-based Cliffs Natural Resources since then about purchasing the camp, located 250 metres from Noront’s existing Esker Camp.

The sale of the camp is subject to certain conditions, one of them being the sale price not be revealed, said Noront president and chief executive officer Alan Coutts. If the deal goes through as expected, Noront will take possession of the camp early in the second half of this year.

What the sale means for Cliffs’ holdings in the Ring of Fire isn’t known. An email inquiry to the company about that Monday did not garner a response.

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NEWS RELEASE: Zeldes Haeggquist & Eck LLP Announces Investigation of Cliffs Natural Resources, Inc.

May 12, 2014 09:01 AM Eastern Daylight Time

SAN DIEGO–(BUSINESS WIRE)–Zeldes Haeggquist & Eck, LLP, a shareholder and consumer rights litigation firm has commenced an investigation into Cliffs Natural Resources, Inc. (“Cliffs” or the “Company”) (NYSE: CLV) for securities law violations in connection with the Company’s initial public offering (“IPO”).

“deeply concerned by the destruction of shareholder value suffered by shareholders.”

Cliffs is an ire ore mining company incorporated and headquartered in Cleveland, Ohio, which had been developing three large iron ore and chromite mines in Canada. On February 15, 2013, Cliffs conducted an IPO in which it sold $675 million of stock to investors. Since the IPO, the stock has fallen nearly $6 per share, or 25%, to approximately $19 per share, wiping out over $162 million in shareholder value.

Our investigation focuses on whether Cliffs failed to disclose material information to investors regarding problems or delays with its Canadian mines. Specifically, we are investigating whether Cliffs made false statements or material omissions in its Registration Statement and Prospectus regarding development delays and operating and infrastructure problems at several of Cliffs’ iron ore and chromite mines in Canada.

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Cliffs Natural Resources Booted From S&P 500, To Be Replaced By Essex Property Trust – by Maggie McGrath (Forbes Magazine – March 26, 2014)

http://www.forbes.com/

Cliffs Natural Resources CLF +1.25% has had a rough go of it recently: after posting a 32.5% loss in 2013, the struggling iron ore producer has continued to take a beating in 2014 trading. And now, its near-24% year-to-date decline has not only secured its title as one of the worst performing S&P 500 stocks over the past 12 months, but it has also gotten Cliffs booted out of the S&P 500 and into the S&P midcap 400.

The S&P Dow Jones Indices announced Wednesday evening that effective April 1, Cliffs will no longer be a member of the S&P 500. In its place will be Essex Property Trust, a REIT that is currently a member of the S&P midcap 400. In addition to moving up to the S&P 500, Essex will also acquire BRE Properties in a deal that is expected to be completed after the markets close on April 1.

As BRE currently resides on the S&P 400, its departure leaves room on the midcap index for the Fei FEIC +3.63% Company, an Oregon-based supplier of scientific instruments that is currently listed on the S&P Smallcap 600.

“Cliffs Natural Resources and FEI have market capitalizations that are more representative of the mid-cap market space,” the S&P Dow Jones Indices said, explaining the switch.

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UPDATE 2-Hedge fund names Cliffs directors, launches proxy battle – by Reuters India (March 7, 2014)

http://in.reuters.com/

(Reuters) – Activist investor Casablanca Capital LP on Thursday nominated six directors for election to the board of Cliffs Natural Resources Inc, setting in motion a proxy battle for the iron ore producer that it wants split into two companies.

The New York-based hedge fund said the director slate, named ahead of Cliffs’s annual meeting in May, includes Casablanca Chief Executive Officer Douglas Taylor as well as Lourenco Goncalves, former CEO of Metals USA.

Casablanca, which owns about 5.2 percent of Cliffs, first targeted the Cleveland-based company in January. It wants Cliffs, which was the second-worst performing stock in the S&P 500 Index last year, to spin off its “riskier” international operations from its cash-generating U.S. assets.

Last month, the fund named Goncalves as its preferred candidate for Cliffs’s CEO and said it would nominate a majority slate to the company’s 11-member board.

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New Cliffs CEO visits Iron Range, predicts stable times for taconite – by John Myers (Duluth News Tribune – March 6, 2014)

http://www.duluthnewstribune.com/

VIRGINIA — In his first 100 days on the job, Gary Halverson closed Canada’s third largest iron ore mine, halted a chromite mining project in Ontario and worked to fend off a Wall Street demand that his company split up.

Other than that, it was mostly uneventful for the new president and chief executive officer of Cliffs Natural Resources.

Halverson spent Thursday on the Iron Range, where his company operates three of Minnesota’s six major taconite iron ore operations, saying his company is “shrinking to grow’’ but predicting a good year for its part of the state’s taconite industry.

Halverson, speaking to Iron Range business and community leaders, said he expects U.S. automakers to build 16.5 million vehicles in 2014, 1 million more than 2013; that new construction should increase 6 to 8 percent this year; and that U.S. steel demand should increase 4 percent this year over last, creating a good market for his company’s taconite iron ore.

“We’re about back to full production at NorthShore (mining) and we expect to produce between 22 and 23 million tons of pellets this year’’ at U.S. operations, Halverson said, noting that’s up from 21 million tons in 2013.

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Cliffs stands by Halverson – by Carl Clutchey (Thunder Bay Chronicle-Journal – February 19, 2014)

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

Though some shareholders of Cliffs Natural Resources have been calling for his replacement, the Sudbury native who put the brakes on what had been expected to be the first operating mine in the Ring of Fire has been given a promotion.

Cleveland-based Cliffs last week elevated Gary Halverson so that he is the company’s CEO as well as president. Halverson, 55, was hired in November as Cliffs’ president and chief operating officer.

“We are confident that Gary is the right candidate to lead Cliffs, given his proven experience with international and long-term mining operations and understanding of the global commodities industry,” said a Cliffs news release.

A few days after Halverson was hired, Cliffs announced that it was stopping all pre-development work on a proposed ROF chromite mine about 550 kilometres northeast of Thunder Bay. Chromite is a key ingredient in stainless steel.

Earlier this month, as Cliffs endured mounting criticism from shareholders over its falling stock price, Halverson cut $90 million from the company’s exploration budget and announced the idling of its Wabush iron-mine in Newfoundland.

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NEWS RELEASE: CLIFFS NATURAL RESOURCES INC. ISSUES OPEN LETTER TO SHAREHOLDERS

CLEVELAND – Feb. 14, 2014 – Cliffs Natural Resources Inc. (NYSE: CLF) (Paris: CLF) today issued the following open letter to all shareholders:

Dear Cliffs Shareholder:

Our Board and management team are fully committed to pursuing a course that enhances long-term shareholder value – and we want to accomplish it in a manner that is sustainable and that will benefit all of our shareholders.

As we do with any significant investor, Cliffs’ Board of Directors and management team have attempted to maintain a constructive dialogue with Casablanca. In fact, Cliffs’ Chairman along with senior management has met with Casablanca in person twice in addition to a number of telephone calls and emails. Also, one of the Company’s financial advisors, along with members of senior management, participated in a discussion with Casablanca regarding its proposal and analysis of Cliffs. We are disappointed that Casablanca seems intent on waging a public campaign rather than continuing its private engagement with our Chairman and management to address our doubts and concerns relating to Casablanca’s proposal.

Since July 2013, Cliffs has instituted a number of changes to our Board and senior management team. These changes included the addition of four highly qualified directors:

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Cliffs cutting jobs, costs – by Star Staff (Sudbury Star – February 14, 2014)

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

U.S.-based Cliffs Natural Resources, which once had ambitious plans to open a chromite smelter in Sudbury by 2015, has announced that it will lay off about 500 employees and dramatically reduce spending.

“Sharper capital allocation must drive our decisions,” CEO Gary Halverson said in a statement. “(The) announcement to reduce overall capital spending is an important first step.”

However, on Thursday, Cliffs, which is facing against an activist investor who wants to break up the mining company, reported higher fourth-quarter profits helped in part by higher iron ore prices and a drop in the cost of goods sold.

The iron ore and metallurgical coal producer said net income rose to US $31 million, or 20 cents a share, in the three months to end-December. A year ago, it reported a loss of $1.6 billion, or $11.36 a share, when it wrote down $1 billion related to its 2011 acquisition of Consolidated Thompson Iron Mines Ltd.

Revenue was marginally lower at $1.52 billion in the quarter from $1.54 billion as lower prices and sales for coal were partially offset by a 10 percent increase in global seaborne iron ore pricing.

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