When Will Cliffs Become A Pure Play U.S. Iron Ore Mining Company?
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.
[trefis_forecast ticker=”CLF” driver=”1976″]
Thus, Cliffs should become a pure play U.S.-focused iron ore producer by 2020.
Have more questions about Cliffs Natural Resources? See the links below.
- What Is Cliffs Natural Resources’ Fundamental Value Based On 2015 Results?
- What Is Cliffs Natural Resources’ Revenue And EBITDA Breakdown?
- How Has Cliffs Natural Resources’ Revenue Composition Changed Over The Last 5 Years?
- By What Percentage Did Cliffs Natural Resources’ Revenue & EBITDA Decline Over The Last 5 Years?
- By What Percentage Can Cliffs Natural Resources’ Revenue & EBITDA Change Over The Next 3 Years?
- How Do Cliffs Natural Resources’ Margins Compare With Those Of Iron Ore Mining Giants Such As Rio Tinto And Vale?
- Why ArcelorMittal Is The Most Important Customer For Cliffs’ U.S. Iron Ore Sales
Notes:
See More at Trefis | View Interactive Institutional Research (Powered by Trefis)