NEW YORK (TheStreet) -- Cliffs Natural Resources (CLF) shares are up 11.38% to $6.53 in afternoon trading on Tuesday after a Quebec official said that his government is prepared to purchase a rail line and port facilities that service a now shuttered iron ore mine that Cliffs owns in the Canadian province.
The Quebec government taking over the transportation infrastructure at the Bloomfield Lake mining site is expected to lower the mine's operating costs by as much as $20 per ton, according to Bloomberg. Economy Minister Jacques Daoust said that the government is also considering purchasing a 20% stake in the mine itself.
Cliffs shuttered the mine, which the company purchased in 2011, in January, sacrificing 600 jobs in a region in Quebec that is experiencing 10.7% unemployment. Falling oil prices and the mine's lack of profitability led the company to close the mine earlier this year, Bloomberg reported.
With the purchase, the government would own a 20 mile rail line that connects the mine to a mainline railway.
TheStreet Ratings team rates CLIFFS NATURAL RESOURCES INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate CLIFFS NATURAL RESOURCES INC (CLF) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself."