Cliffs Natural Resources Inc (NYSE:CLF) recently revealed plans to resume its mining activities in the Northshore mine in Minnesota.
Click Here For More Market Exclusive Updates & Analysis
The company plans to resume the production of iron ore pellet in the mine on May 16 this year. The decision was made due to increasing demand for iron ore pellets by domestic customers. The company’s mining operations in Minnesota provide jobs for about 540 workers who work in the mines as well as the taconite pellet processing factory. Cliffs also owns the Hibbing Taconite mine that is also located in Minnesota and has been operating at normal capacity.
Some of the other mines owned by the company include the Empire and Tilden mines situated in Michigan. Taconite operations were only suspended in Michigan. Lourenco Goncalves, the President and CEO of Cliffs stated that the firm’s production levels for clients suffered the impact of unfairly traded steel, and this has affected the domestic steel industry since 2015. The situation therefore negatively affected demand for the company’s products. Luckily there was some level of control on the unfairly traded steel thanks to the announcement of preliminary duties.
Normal levels of pellet demand have been seen in the increase in client order books. Normal production levels are thus expected from the company. Cliffs also revealed plans to restart the manufacture of DR-grade pellets that are produced for EAF clients along with the reboot of the Northshore operations. The production of the DR-grade pellets also took place at the Northshore mines where they were part of the DRI production.
Investors had a positive reaction to the announcement as Cliffs shares rose 6.5% today to $2.70. The mining company had previously announced that the cash production cost in 2016 would be between $50 and $55 per ton. It also estimated the cash cost of products between $50 and $60 per ton. Some of Cliffs’ rivals that have better ratings include Gold Standard Ventures Corp GSV, Franco-Nevada Corporation (NYSE:FNV) and AngloGold Ashanti Limited (ADR) (NYSE:AU).
