NEW YORK (AP) — Shares of Cliffs Natural Resources Inc. declined on Thursday as uncertainty surrounds the fate of its Bloom Lake project. Cliffs has been working on expanding the open-pit iron ore mine, which is located in Fermont, Quebec , but the project has gone slower than expected. Morgan Stanley's Evan Kurtz said in a client note that Cliffs currently owns 75 percent interest in Bloom Lake , with Wuhan Iron & Steel owning the remaining stake. Wuhan makes payments to Cliffs for its share of expenses and capital spending, but the analyst says that it appears that some of the payments have been slow and there's been speculation that the China -based company may possibly withdraw from the project. Kurtz said that he has no reason to believe that there are any issues with Wuhan and that slow payment doesn't necessarily mean that no payment has been made. Kurtz said that investors his firm surveyed anticipate that Cliffs will be able to find another partner for the approximately $1.25 billion that is needed to finish the second phase of the project. But Kurtz said that Cliffs may have a tough time finding a new partner on reasonable terms, and investors may not be fully accounting for the impact of escalating freight rates on Bloom Lake's price realizations. The analyst expects the Cleveland company to provide an update on the project when it reports its quarterly results Feb 13 . Kurtz reiterated an "Underweight" rating and reduced Cliffs' price target to $12 from $14 . Cliffs' stock fell 83 cents , or 3.9 percent, to $20.36 in afternoon trading. Shares are down about 45 percent in the past year.
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