Iron ore price reverses to losses as weakening China steel consumption drags
Apparent consumption of five major steel products slipped by 2.1% week-on-week.
Cliffs Natural Resources NYSE:CLF, Paris:CLF was down about 7% in mid-day trading after the Cleveland-based company announced plans yesterday to sell and idle its biomass production facility in Michigan.
Cliffs said it will take a $30 million charge in the third quarter as a result of the decision, while adding it will make efforts to reassign the 30-odd employees of renewaFUEL to other positions in the company.
David Blake, the Cliffs executive overseeing renewaFUEL, provided a rationale for the decision:
“Over recent years Cliffs executed a strategy focused on expanding its portfolio of steelmaking raw material assets. Cliffs continues to successfully grow its core iron mining business with a number of expansion projects underway. With this, it is essential that our management focus and allocation of capital resources be deployed where we can have the most impact for all stakeholders.”
Cliffs acquired renewaFUEL in 2007 and previously operated a pilot plant in Battle Creek, Mich. Construction was completed on the Sawyer facility in early 2011 and the plant went through its commissioning phase during the first half of 2011. The plant delivered its first commercial supply of biofuel cubes to the Marquette Board of Light and Power in mid-July.
Cliffs, the number one US iron ore miner, operates iron ore and coal mines in North America and two iron ore mining complexes in Western Australia. The company also has a 45% economic interest in a coking and thermal coal mine in Queensland, Australia. In addition, Cliffs has a major chromite project, in the pre-feasibility stage of development, located in Ontario, Canada.
