Feb. 18--Officials at Cliffs Natural Resources last week gave a recap of their 2013 business and a look-ahead to 2014, when the mining company expects increased demand for iron ore with a growing U.S. economy.
In its quarterly report and conference call with industry analysts, Cliffs officials said they expect "accelerating economic growth in the United States to support domestic steel production and thus demand for steelmaking raw materials" such as taconite.
For 2014, Cliffs is maintaining its full-year sales and production volume expectation of 22 million to 23 million tons from its U.S. iron ore business, up from about 21 million tons in 2013. Much of that increase will come from a return to full production at Northshore Mining in Silver Bay.
The company said it is producing taconite pellets for about $70 per ton at its U.S. operations and selling them for about $110 per ton. The company said it expects to see overseas sales of iron ore to average about $128 per ton and that it expects demand from China to remain strong.
Cliffs is one of Minnesota's major taconite iron ore producers. It owns and operates Northshore Mining in Silver Bay and Babbitt and United Taconite in Eveleth and Forbes. It also is co-owner and operator of Hibbing Taconite and owns and operates the Tilden/Empire taconite operation in Michigan'sUpper Peninsula.
On Oct. 13, Cliffs reported fourth-quarter and full-year results for 2013, including a 3 percent decrease in revenue from 2012, although the company said the year ended with a solid fourth quarter. Cliffs reported full-year revenues of $5.7 billion, down $181 million, saying results were "driven by slightly lower global iron ore sales volumes and significantly lower market pricing for metallurgical coal products."
For the full year, Cliffs recorded net income attributable to Cliffs' shareholders of $414 million, or $2.37 per diluted share, compared with a net loss of $899 million, or $6.32 per diluted share, in 2012.
The company also announced last week that Gary B. Halverson, 55, formerly president and chief operating officer, has been appointed as president and CEA, effective immediately. He also serves as a director on Cliffs' board of directors. Halvorson said the company is working to cut costs and increase shareholder value.
Company officials, who have come under fire in recent months by a vocal investor group to cut costs and raise dividends, on Friday issued an open letter to its shareholders that they were working hard to accomplish those goals but would not react to all of the demands made by Casablanca, the New York-based hedge fund that now owns about 10 percent of Cliffs' shares.
Company officials said they are working to become a "leaner and more efficient'' company but that Casablanca is urging too many changes, such as selling off foreign assets, too fast.
Earlier this month the company announced it was closing its Wabush iron ore mine and processing operations in Newfoundland and Labrador, Canada's third largest iron ore operation, because of high operating costs. The company also said it was indefinitely suspending its efforts to develop a chromite mine in Canada and cutting in half new spending on expanding its Bloom Lake iron ore mine in Quebec.
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