Cliffs To Take Billion Dollar Writedown With Iron Ore Fall

Cliffs Natural Resources, the largest U.S. iron ore producer, has said it expects ti take a writedown of $6 billion as iron ore prices continue to slump on the back of softening demand.

According to Bloomberg:

The after-tax non-cash impairment will be taken for the third quarter, the Cleveland-based company said today in a statement. The move doesn’t affect cash flows, and its domestic iron-ore business is more stable, Cliffs said. The shares fell 5.3 percent to $9 at 9:39 a.m. in New York.

Tony Robson, an analyst with BMO Capital Markets, wrote in a note that the news:

[E]ssentially confirms, subject to an upturn in seaborne iron ore and met and thermal coal prices, that the vast bulk of the company’s investments in the last decade prior to the appointment of new CEO Lourenco Goncalves was misspent.

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