Cliffs to Temporarily Idle Iron Ore Production at Its US Operations

Cliffs Natural Resources (NYSE:CLF) announced that it is temporarily idling iron ore production at its Minnesota-based mining operation by December 1.
As quoted in the press release:

The Company stated that until its domestic customers’ blast furnace capacity utilization rates improve, existing customer demand will be satisfied from its current pellet inventory.
Cliffs anticipates that both Northshore and United Taconite operations will be temporarily idled through the first quarter of 2016. During that time frame, Cliffs will continue to operate Hibbing Taconite in Minnesota, as well as the Tilden and Empire mines inMichigan, at normal rates. The Company will assess and adjust its production plans as market conditions improve.
Cliffs is maintaining its previous cash production cost per ton expectations for 2015, and for 2016 is lowering its cash production cost expectation to $50 – 55 per ton and its cash cost of goods sold expectation to $60 – $65 per ton. The cash cost of goods expectation includes $9 million per month of idle costs for the Northshore and United Taconite mines.
Cliffs’ Northshore Mining iron ore operation is comprised of a mine and a taconite pellet processing facility located in Minnesota. The operation employs approximately 540 employees. Cliffs will maintain minimal staffing during the temporary idle for basic maintenance duties and for on-going work to support the DR-grade pellet trials.

Lourenco Goncalves, chairman, president and CEO of Cliffs, commented:

The historic high tonnage of foreign steel dumped into the U.S. continues to negatively impact the steel production levels of our domestic customers. As our pellet inventory at both Northshore and United Taconite is adequate to meet current customer demand, we will be able to optimize our working capital and cash flow by temporarily idling production at Northshore. Our pellet inventory is currently at a seasonally, historic high level. As a result, we are taking this action to work off our pellet inventory pending receipt of our customers’ tonnage requirements for 2016 which have not been finalized.

Click here to read the full Cliffs Natural Resources (NYSE:CLF) press release.