Duluth News Tribune reported that the CEO of Cliffs Natural Resources provided a hint of what could be bad news for iron ore workers in the Northland.
Mr Joseph Carrabba analysts said that shutting down production lines at the company’s Iron Range and Silver Bay operations is possible due to lower demand and prices for iron ore.
Mr Carrabba said that “With the lower prices, it’s not advantageous for us right now to ship out of the Great Lakes.”
According to a transcript of the call on cliffsnaturalresources.com, “And we’re not shipping there to break even; we’re actually looking to make money as we do. As we said in the past that shipping, exporting out of the Great Lakes is a spot business for us. When it’s fortuitous for us, we’ll do it. And when it’s not, we won’t.”
Cliffs had revenues of USD 1.5 billion from July through September this year, way down from the same period in 2011, as both global and domestic demand for steel and iron ore has slowed.
The Cleveland based company said that its Q3 earnings report for the year, which saw the global seaborne” price of iron ore including taconite pellets, fall by 36% due in large part to the economic slowdown in China.
The CEO said that “There’s some higher cost lines. The smaller, older lines in North Shore do we idle a few of those lines, as we come through? Do we take a line down in Hibbing? As you can see, the flexibility of the operation is there’s a number of combinations that we can do.”
Cliffs owns and operates North Shore Mining in Babbitt and Silver Bay and United Taconite in Eveleth and is part owner of and operates Hibbing Taconite. The Cleveland-based company also owns the Tilden and Empire mines in Michigan’s Upper Peninsula as well as iron and coal mines in Canada and Australia.
The slowdown has yet to reach production in the Northland. Minnesota’s 6 taconite operations entered 2012 with the highest production and employment levels in nearly a decade.
Mr Sandy Karnowski a spokeswoman from Cliffs’ Duluth office said that “Cliffs is currently assessing production levels for the coming year for all of its operations. We do not typically release production estimates for individual operating facilities. At this time no final production estimates have been completed. As always, any production estimates are subject to change throughout the year based on business conditions.”
Source - www.duluthnewstribune.com
(www.steelguru.com)
