When Will Cliffs Become A Pure Play U.S. Iron Ore Mining Company?

-0.35%
Downside
20.07
Market
20.00
Trefis
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CLF
Cleveland-Cliffs

Ever since activist hedge fund Casablanca Capital took control of Cliffs’ board in a proxy contest victory around two years ago, the company management has been working towards its long-term objective of converting the company into a purely U.S.-focused iron ore miner. The U.S. iron ore operations are the company’s most profitable business segment and the company management prefers focusing solely on these operations in the long term. Cliffs’ Eastern Canadian iron ore operations filed for bankruptcy towards the end of 2014 and the company completed the sale of its U.S. coal mining operations towards the end of 2015. The company does not intend to spend on developing fresh reserves at its depleting Koolyanobbing mine, which constitutes the company’s Asia Pacific Iron Ore operations. As a result, the company’s Asia Pacific Iron Ore operations will cease production in 2019, assuming annual production continues at 2016 rates, as illustrated by the graph shown below.

Thus, Cliffs should become a pure play U.S.-focused iron ore producer by 2020.

Pure Play U.S. Iron Ore Producer

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Have more questions about Cliffs Natural Resources? See the links below.

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Cliffs Natural Resources

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