| Cliffs Natural Ends Pellet Agreement with Essar Algoma | |
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Cliffs Natural Resources Inc. CLF declared that it has ended its pellet sale and purchase agreement with Essar Algoma, effective Oct 5, 2015. According to Cliffs Natural, Essar Algoma violated multiple clauses under the agreement, thus leading the company to terminate the contract. However, the company may consider continuing the supply of pellets to Essar on terms in line with a just-in-time iron ore supply arrangement.
Cliffs Natural is the largest producer of iron ore pellets in North America. The company reported strong second-quarter 2015 results, with a net income of $60 million versus a net loss of $2 million in the year-ago quarter. The company has implemented a strategic capital allocation plan to ensure the optimum utilization of cash. Further, Cliffs Natural remains focused on deleveraging its balance sheet.
In August, the company successfully closed a previously announced tender offer which enabled it to reduce its debt by $125 million along with an $18 million reduction in interest expense until maturity. Further, it achieved a $56 million equity value creation through discount capture.
However, Cliffs Natural has been significantly challenged by declining iron ore pricing. Seaborne iron ore prices remain under pressure, thereby weighing on the company’s revenues. The current uncertain macroeconomic environment, including the slowdown in Europe, may impact the company’s operations and results.
Moreover, for 2015, Cliffs Natural reduced its full-year sales and production volume expectation by 1.5 million tons to 19 million tons of iron ore pellets. This reflects the current low capacity utilization rates among U.S. steel makers, mainly due to heavy imported steel penetration.
Zacks Rank
Cliffs Natural currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the mining space include Fortescue Metals Group Limited FSUGY, Vale S.A. VALE and Primero Mining Corp. PPP, all carrying a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report VALE SA (VALE): Free Stock Analysis Report CLIFFS NATURAL (CLF): Free Stock Analysis Report PRIMERO MINING (PPP): Free Stock Analysis Report FORTESCUE METAL (FSUGY): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
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CLIFFS Natural Resources
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PRODUCER |
CODE : CLF |
ISIN : US18683K1016 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
CLIFFS Natural Res is a iron producing company based in United states of america. CLIFFS Natural Res produces iron, coal in Australia, in Brazil and in Canada, and holds various exploration projects in Canada. Its main assets in production are WABUSH MINE, EMPIRE AND TILDEN MINES, HIBBING TACONITE, NORTHSHORE MINE, UNITED TACONITE, OAK GROVE MINE, GREEN RIDGE MINE and PINNACLE MINE in Canada, AUSTRALIAN IRON ORE and SONOMA in Australia and AMAPA in Brazil and its main exploration properties are MT JACKSON J1 in Australia and DIAGNOS, WAWA, FREEWEST, MC FAULD'S LAKE, MACFADYEN, WAWA CLAIMS and BIG DADDY in Canada. CLIFFS Natural Res is listed in France, in Germany and in United States of America. Its market capitalisation is US$ 3.4 billions as of today (€ 3.1 billions). Its stock quote reached its highest recent level on May 16, 2008 at US$ 99.17, and its lowest recent point on January 15, 2016 at US$ 1.20. CLIFFS Natural Res has 297 400 968 shares outstanding. |