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Nov. 19, 2012 /PRNewswire/ -- Cliffs Natural Resources Inc. (NYSE: CLF) (Paris: CLF) announced today a decision to delay portions of its Bloom Lake Mine Phase II expansion in
Quebec and idle a portion of its production at two of its U.S. iron ore operations, Northshore Mining in
Minnesota and Empire Mine in Michigan. The Company is adjusting its 2013 operating plans for its North American iron ore businesses to align with expected sales volumes. These production decreases are driven by increased iron ore pricing volatility and lower North American steelmaking utilization rates.
Joseph A. Carrabba, Cliffs' chairman, president and chief executive officer, said, "Disciplined capital allocation is core to our operating strategy and reducing higher cost production will enhance our financial flexibility in both the short and longer term. Despite today's announcement, we are still committed to our investments in
Canada and believe Bloom Lake will deliver significant long-term value over time."
Eastern Canadian Iron OreAt Bloom Lake Mine in
Eastern Canada, Cliffs is suspending certain components of the Phase II expansion, including the completion of the concentrator and load out facility. As a result, construction related to these activities will cease and third-party contractors will be demobilized effective immediately. Pre-stripping activities to develop the working faces of Bloom Lake's ore body, supporting both Phase I and Phase II mine development will continue. Also, Cliffs will continue its environmental projects related to completing Bloom Lake's water and tailings management system and ore storage facility. Depending on market conditions, Cliffs expects to complete Phase II construction in early 2014.
The delay of Bloom Lake's Phase II construction decreases Cliffs' Eastern Canadian Iron Ore 2013 sales volumes to 9 - 10 million tons from the previous expectation of 13 - 14 million tons. In 2013, the Company expects to achieve an annualized run rate of approximately 7 million tons for Bloom Lake's Phase I facility.