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Cliffs Natural Resources

UPDATE: 500 workers affected as Wabush Mines idled (St. John’s Telegram – February 11, 2014)

http://www.thetelegram.com/

Cliffs Natural Resources is shutting down production at Wabush Mines, affecting 500 workers currently employed there.

The news was confirmed in an official statement by the company. The statement was not specific to the status of Wabush Mines, but instead focused on a more than 50 per cent slash in the company’s capital spending across its business year over year.

Premier Tom Marshall has issued a statement in response to the news. “The decision by Cliffs Natural Resources to idle its mining and processing operations at the Scully Iron Ore Mine in Wabush is very disappointing. While we believe this was undoubtedly a difficult decision for Cliffs, our thoughts are with employees of the mine and their families during this challenging time,” Marshall said.

“I will be in Wabush this week with Ministers Dalley and McGrath for discussions with stakeholders. We will continue to further opportunities for development in Labrador West. We remain confident in the future of the mining industry in the region.”

Wabush Mines started pulling ore from the Scully Mine in 1965. The ore goes to a concentrating plant at site and is then moved, by rail, to Point Noire, Que.

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NEWS RELEASE: Cliffs Natural Resources Inc. Announces the Appointment of Gary B. Halverson as President and Chief Executive Officer

CLEVELAND – Feb. 13, 2014 -Cliffs Natural Resources Inc. (NYSE: CLF) (Paris: CLF) announced today that its Board of Directors has appointed Gary B. Halverson, 55, formerly president and chief operating officer, to president and chief executive officer, effective immediately. He also serves as a director on Cliffs’ Board.

James Kirsch, Cliffs’ chairman of the Board, said, “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. Since joining Cliffs, Gary has executed a number of key strategic initiatives to strengthen the Company and enhance value for all Cliffs’ shareholders.”

A number of Mr. Halverson’s key strategic initiatives include:

· taking action to optimize performance, cut costs and extract shareholder value from the Bloom Lake asset;

· announcing a $90 million reduction in expected 2014 SG&A and exploration spending;

· reducing 2014 capital expenditures significantly from 2013 year-over-year;

· performing global asset review and interactions with key customers;

· halting development of the Chromite Project indefinitely;

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NEWS RELEASE: Cliffs Natural Resources Inc. Responds to Casablanca Capital

CLEVELAND – Feb. 12, 2014 – Cliffs Natural Resources Inc. (NYSE: CLF) (Paris: CLF) today issued the following statement in response to Casablanca Capital:

The Board of Directors and management team of Cliffs Natural Resources welcome open communications with all of our shareholders and value their input toward the collective goal of enhancing shareholder value. As part of the goal to enhance shareholder value, over the last year, the Cliffs Board and management team have taken significant steps to improve Cliffs’ financial and operating performance across all businesses.

The Company’s focus has been – and continues to be – on reducing costs, strengthening its balance sheet with cash flow from operations, taking a disciplined approach to capital spending, and evaluating the strategic fit and value creation potential of all the Company’s assets. In addition, Cliffs has made significant changes to strengthen the Board of Directors and management team, including the addition of four new Board members, a new Chairman and Gary Halverson as the incoming Chief Executive Officer.

Consistent with its focus on enhancing shareholder value, on Feb. 11, 2014 the Company announced that it expects full-year 2014 capital expenditures to be between $375 – $425 million, a reduction of more than 50% from full-year 2013 capital spending. This decrease is driven by a significant reduction in the Company’s expansion and capital spending at the Bloom Lake Mine. Given the wide range of outlook for iron ore prices, the Company decided to reduce 2014 capital expenditures at Bloom Lake as it considers strategic alternatives for the asset.

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UPDATE 2-Hedge fund plans proxy fight with Cliffs to install new CEO – by Allison Martell (Reuters U.S. – February 12, 2014)

http://www.reuters.com/

Feb 12 (Reuters) – The activist investor squaring off with Cliffs Natural Resources Inc named its preferred candidate for chief executive officer on Wednesday and said it plans to nominate enough new directors to form a majority of the iron ore miner’s board.

Hedge fund Casablanca Capital, which owns about 5.2 percent of Cliffs, said it is backing Lourenco Goncalves, former CEO of Metals USA, to take the top job at hard-hit Cliffs.

Last month Casablanca publicly urged Cliffs to spin off its international operations and form a master limited partnership from its U.S. assets, but the fund declined to say what its next steps would be if Cliffs refused.

Cliffs, a relatively high-cost producer, has been battered by weak iron ore prices. Operational issues and worse-than-expected costs have plagued its Bloom Lake Mine in Quebec, once seen by analysts as a key growth project.

After months of uncertainty, the company said on Tuesday it has decided to indefinitely suspend a planned expansion at Bloom Lake, and idle Wabush, another Canadian mine, slashing capital spending and cutting some 500 jobs.

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NEWS RELEASE: Casablanca Capital Backs Lourenco Goncalves To Become CEO of Cliffs Natural Resources And Notifies Company Of Intention To Nominate Majority Slate Of Directors For Election To Board

Says It Believes Yesterday’s Bloom Lake Announcement Does Not Go Far Enough to Address Fundamental Strategic and Structural Changes Needed to Create Value for Shareholders

February 12, 2014 08:30 AM Eastern Standard Time

NEW YORK–(BUSINESS WIRE)–Casablanca Capital LP (“Casablanca”), one of the largest shareholders of Cliffs Natural Resources Inc. (“Cliffs” or “the Company”) (NYSE: CLF), with beneficial ownership of approximately 5.2%, today announced that it is backing Lourenco Goncalves, former CEO of Metals USA, to fill the currently open position of Chief Executive Officer of Cliffs. Casablanca has also delivered a letter to the Company declaring its intention to nominate a majority of directors for election to Cliffs’ Board of Directors at the Company’s 2014 annual meeting of shareholders.

“In spite of its public statements, Cliffs hasn’t engaged us in any meaningful dialogue on the issues we’ve raised or provided a timetable for doing so.”

Goncalves, a 30-year veteran of the metals and mining industry, is standing as CEO candidate, has agreed to be a Casablanca director nominee, and recently made a personal investment of approximately $1 million in Cliffs shares. Goncalves was most recently Chairman, President and CEO of Metals USA.

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UPDATE 2-Miner Cliffs to slash 2014 capital spending, cut 500 jobs – by Nicole Mordant (Reuters U.S. – February 11, 2014)

http://www.reuters.com/

Feb 11 (Reuters) – Under pressure from an activist shareholder, Cliffs Natural Resources Inc said on Tuesday it will slash capital spending, forego a planned expansion at a key Canadian mine and shut another mine in Canada, cutting about 500 jobs.

Cliffs, a Cleveland-headquartered iron ore and coal producer, said it plans to reduce its capital spending in 2014 by more than 50 percent to between $375 million and $425 million as it cuts back its Bloom Lake Mine expansion and idles production at its Wabush Mine.

The miner has recently been targeted by an activist shareholder who wants the company to be broken up and Cliffs to spin out its “riskier” international operations, including the Bloom Lake and Wabush mines, into a separate business from its strong cash-generating U.S. operations.

Cliffs acquired Bloom Lake as part of its takeover of Consolidated Thompson Iron Mines Ltd in 2010 but higher-than-expected costs at the mine have weighed on Cliffs’ earnings. Cliffs delayed a planned expansion in 2012, and a year ago took a $1 billion goodwill writedown related to the Consolidated Thompson deal.

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Cliffs not pulling out of Ring of Fire – by Staff (Sudbury Star – February 1, 2014)

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

A Cliffs Natural Resources spokeswoman is denying a report from an online newspaper that the Cleveland-based company is pulling out of its development in the Ring of Fire.

Cliffs officials continue to talk with representatives of the Government of Ontario and First Nations communities in the area, Patricia Persico said Friday. “We are continuing with our plans as previously stated,” Persico said in an email.

In November of last year, Cliffs halted all technical work including its feasibility study, development and exploration activities for an undetermined period of time. It was a crushing blow to many in Ontario, particularly here in Sudbury where hopes were high after the former Moose Mountain Mine was chosen as the site Cliffs planned to build a $1.8-billion ferrochrome processing plant.

Persico said Cliffs remains supportive of the province’s plan to form a development corporation to finance and develop infrastructure for the Ring of Fire, and intends to participate in future discussions.

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Cliffs Natural Resources Walks Away From Ring of Fire – by James Murray (Netnewsledger.com – January 30, 2014)

http://www.netnewsledger.com/

THUNDER BAY – Breaking News – Cliffs Natural Resources first stepped back from the Ring of Fire officially last November. The company explained in shutting down its operations in Northwestern Ontario that the company was “suspending operations”.

Now it appears the company is taking another big step back from the chromite discovery in Northern Ontario. Cliffs Natural Resources has been facing pressure from an investor who is seeking to break up the company.

Moody’s is saying that would not be beneficial. Moody’s says that Cliffs’ actions in the past twelve months that have including cost cutting spending reductions along with reducing debt levels. Those efforts have resulted in a stronger credit portfolio for Cliffs.

Moody’s reports that Cliff’s Asian-Pacific operations are providing the company with diversification and cash flow to the company which are helping to reduce Cliffs Natural Resource’s $3.9 billion debt load.

Moody’s states in a report reduced on January 28 2014, “Given its strategic objectives for positioning the company for future growth, we believe Cliffs will continue to exhibit a conservative approach to its capital structure and remain focused on cost reduction and managing to a neutral cash flow position while making necessary capital investments.”

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Taconite future looking bright in 2014, 2015 – by John Myers (Duluth News Tribune – December 17, 2013)

http://www.duluthnewstribune.com/

Minnesota’s taconite iron ore producers will make less product in 2013 than they did in 2012, but the downturn looks to be brief.

It appears 2013 will end up with about 38.9 million tons produced and shipped from the Iron Range, according to state estimates. That’s down about 2 percent from 39.7 million tons produced in 2012, said Bob Wagstrom, who tracks taconite production for the Minnesota Department of Revenue.

Most of the difference was spurred by a million-ton drop in production at Cliffs Natural Resources’ Northshore Mining, which idled two production lines for most of 2013 after losing a customer. Some of that loss was buffered by an increase at U.S. Steel’s Minntac plant in Mountain Iron, Wagstrom said, and by continued increasing production by Magnetation, which has several small plants that recover useable ore from old mine waste sites.

“With the exception of Northshore, everybody was right at last year or even a little up for this year,” Wagstrom said. Northshore officials already have announced that they will restart their idled lines in 2014, boosting production. And Wagstrom said that with continued incremental increases by Magnetation and Mesabi Nugget — the state’s first iron nugget plant near Hoyt Lakes — taxable production could total about 40 million tons in 2014, a level not seen since 2000.

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What’s at stake in the Ring of Fire – CBC Radio One – Ontario Today with Rita Celli (November 28, 2013)

http://www.cbc.ca/ottawa/ This mineral deposit is supposed to be a windfall for Ontario with billions of dollars worth of royalties and thousands of jobs. But the biggest mining player has put development on ice indefinitely. What’s at stake in the Ring of Fire for you? Click here to listen to the radio program: http://www.cbc.ca/ontariotoday/2013/11/27/thursday-whats-a-stake-in-the-ring-of-fire/

Mining suspension dubbed ‘Major setback’ – by Rob Learn (North Bay Nipissing News – November 27, 2013)

http://www.northbaynipissing.com/northbaynipissing/

NIPISSING – If Cliffs Resources and the provincial government are playing poker over the Ring of Fire development, Nipissing MPP Vic Fedeli says the mining giant has decided to fold.

“It’s a major blow and a major setback for Ontario,” said the Progressive Conservative member. “…(Cliffs) have closed their Thunder Bay and Toronto offices. This is not a ploy… They have no confidence in this provincial government. They have waited for five years and there is nothing.”

Fedeli’s comments come on the heels of the announcement last week from Cliffs Resources that it was halting all work towards their Ring of Fire plans to develop a chromite mine in what has been called the biggest mining discovery in Canada in a century.

The consequences for Nipissing region could be devastating. “The North Bay area is involved in the exploration, the delineation of the ore body, the design of the mines and supplying the mines should they go forward. This is devastating,” said Fedeli.

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Stop pointing fingers over Cliffs: Matichuk – by Darren MacDonald (Sudbury Northern Life – November 27, 2013)

http://www.northernlife.ca/

Urges major players to co-operate to get Ring of Fire back on track

Greater Sudbury Mayor Marianne Matichuk says she’s hoping for some announcements soon from the provincial government that will help get the stalled Ring of Fire project back on track.

Matichuk said Ontario Premier Kathleen Wynne called her Tuesday afternoon to tell her the province is doing everything it can to deal with the problems delaying the $60-billion project.

“I’ve been assured that they are working on that right now, and we’ll be hearing announcements from the government soon,” Matichuk said at Tuesday’s city council meeting. “I’ve also been assured by Premier Wynne that she will keep our city informed about the progress.

“I told her everybody needs to basically stop pointing fingers, shake hands and start making deals because we need to get this done.”

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Need to see details of Ring deal – by Carol Mulligan (Sudbury Star – November 27, 2013)

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

It’s been a week since Cliffs Natural Resources dropped the bombshell that was not a bombshell — that it was indefinitely suspending work on its Ring of Fire chromite project. You didn’t need a crystal ball to see that one coming although some politicians claimed to have been blind-sided by it.

Bill Boor, who was Cliffs’ vice-president of global ferroalloys but now has a new title, senior vice-president of strategy and business development, had been telegraphing that message for months.

A year ago, Boor cautioned 330 people at a Greater Chamber of Commerce luncheon that several planets would have to align for Cliffs to begin production at its McFaulds Lake mine by 2016.

In March, he told The Sudbury Star that while he understood that the change of leadership after Premier Dalton McGuinty resigned could slow the progress of talks, Cliffs needed to sign a “definitive document” before it could develop its Black Thor deposit.

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Get the Ring back on track – Thunder Bay Chronicle-Journal (November 26, 2013)

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

THE ongoing interest of a number of mining concerns in the vast Ring of Fire region is not what holds public attention today. Neither is it the creation of a development corporation to manage the project or negotiations between the province and First Nations. Rather, it is the sense of lost opportunities that comes with the indefinite departure of the mineral belt’s biggest player. There is a growing suspicion that something is wrong and that the province is not saying so.

Viewed in isolation, the government’s announcement of a development corporation to bring the multi-mineral development on line is a good thing. It suggests the province takes seriously the potential for immense economic development in the North and the province as a whole. The timing is another question. Toronto Star Queen’s Park columnist Martin Regg Cohn, syndicated in this newspaper, writes today that it “now looks like an act of desperation in anticipation of the Cliffs pullout.”

The question is what did the government know about Cliffs’ intentions and when. The company has been sending signals of frustration with the long process of securing permission to operate. Its warnings were seen by some as undue impatience until it abandoned $500 million of preparatory spending and closed its Thunder Bay and Toronto offices and its site camp. Renewed interest by the company with an upswing in the commodities market would greatly relieve many people.

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Tired of Cliffs seeking more public money – by Cody Walter (Sudbury Star Letter – November 25, 2013)

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

For the last two years plus, we’ve been listening to carefully designed propaganda from Cliff’s Natural Resources, attempting to manipulate public opinion and convince taxpayers that we should give them our money. Now Cliff’s has shelved the project indefinitely, and they would have you believe it’s everyone else’s fault. It’s time for a reality check.

Cliff’s cites “difficulty negotiating with First Nations” as a reason for closing up shop. Yes it’s true, that after 500 years of genocidal torment under (continuing) European occupation, Canada’s Indigenous peoples have won the right to be consulted about developments which will affect them. This is a great thing (if more than a little late), and if Cliff’s finds this “difficult,” then I say: “tough luck.”

Cliff’s wants a break on hydro prices? That’s actually unsurprising, because so does everyone else. But if we agree to sell hydro to them below market price, guess who picks up the tab for the difference? That’s right, it’s you and me.

Likewise with the road they wish to build. They want “help” from the government (read: money from working people) to reduce start-up costs and allow them a more profitable business. Is it such a radical notion these days that businesses should cover their own costs?

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