Cliffs Natural Resources Inc (NYSE:CLF) disclosed today, March 14 that it would resume the production of iron ore pellet from its Northshore Mining operation in Minnesota before May 15. The company indicated that its decision was based on the domestic demand from its customers for iron ore pellets. Also, the move was in line with its earlier indication of production plans scheduled for later in the year.
Cliffs’ mining ore operation in Northshore consists of a taconite pellet processing facility, as well as a mine in Minnesota. Currently, the facility employs about 540 people. The company said that its Hibbing Taconite mine in Minnesota, Tilden and Empire were operating at normal rates. However, its operations at United Taconite in Minnesota have remained idle for the present.
The mining and natural resources firm said that it expected USIO production volume of 16 million tons, which was in line with its full-year estimation. The company would also maintain its earlier cash production cost of $50 – $55 per ton for the current year 2016. Similarly, Cliffs expects cash cost of goods sold to be between $55 and $60 a ton.
The company’s Chairman, President and CEO, Lourenco Goncalves, said that the sudden spurt in steel hit the American market since last year thus impacting its production levels negatively. Cliffs said that its decision to bring back its dedicated employees to work at its Northshore Mining facility was based on the improvement in its clients’ order books.
The CEO said that its customers’ demand for pellets was approaching normal levels. Northshore Mining was developed last year with the help DR-grade pellets used in DRI production. Goncalves said that it would restart the DR-grade pellets production meant for EAF clients at its Northshore location in May.