Reports related to this article:
Project(s): View 2 related projects in PECWeb
Plant(s): View 3 related plants in PECWeb
en
Researched by Industrial Info Resources (Sugar Land, Texas)--With an impending change in leadership, Cliffs Natural Resources Incorporated (NYSE:CLF) (Cleveland, Ohio) produced a third-quarter 2013 revenue of $1.5 billion, about the same as the third quarter of 2012. The international mining and natural resources company attributed the flat-line to the increase in global seaborne iron, lower market prices for coal products, and iron ore sales. Consolidated sales margins increased 76% to $349 million. This was due to lower cost rates across all segments.
Industrial Info is tracking $2.6 billion in projects for Cliffs, including the expansion of the Bloom Lake iron ore mine in Fermont, Quebec. The proposed $600,000 expansion will double the production of iron ore concentrate to 16 million tons per year on the current 30 million-ton-per-year open pit mine by early 2014. However, the project is running late. If the project progresses as planned, a second expansion will increase this production to 24 million tons per year by 2017. The company is currently pending final approval on the second expansion.
"We are pleased with the third quarter's operating and financial results," said Chairman of the Board James Kirsch in a press release. "During the quarter, we cut costs across the board, improved year-over-year sales margin, and lowered our full-year capital expenditures outlook. We have made good progress and have even greater investment and operational opportunities in our future. Ultimately, we will be driven by strategies that create the best options to deliver value to shareholders."
U.S. iron ore decreased in volume to 6.3 million tons, but these lower cost rates produced higher revenue per ton by 2%, up to $112.67 per ton. However, overall revenue for the segment was a mere $782.4 million, about $13.6 million less than the same period in 2012. A major customer's force majeure, and subsequent loss of contract, was a large contributor to lower revenue in this segment.
Wabush Mine in Newfoundland increased product sales, resulting in a 9% hike in volume for the Eastern Canadian Iron Ore segment. The mine sold an additional 1.1 million tons of ore concentrate and pellets in the quarter, boosting sales, while Bloom Lake Mine was stagnant. The segment brought in $284.2 million in revenue, much-needed growth compared to the 2012 revenue of $253.1 million.
Asia Pacific iron ore also saw an increase to $301.7 million in the third-quarter; however, volumes decreased due to Cockatoo Island's inactivity. 2012 revenue for the segment was $254.2 million and the increase is likely due to the higher market pricing and an absence of low-grade tons sold in the previous year.
North American coal saw a large decline in revenues, bringing in $178.3 million, down from the $241.8 million in 2012. Lower sales at Oak Grove Mine in Alabama were the driving force. Last year in the third quarter, the mine experienced an influx of catch-up commitments from the preceding severe weather.
An oil spill at the Pointe Noire port in Eastern Canada cost $18 million in casualty loss, and a $16 million rail contract gone south contributed to the miscellaneous expenses for the quarter; however, an insurance recovery of $6 million helped to offset these in a small way.
"Looking forward, the company expects China to maintain its healthy steel-making pace, driven by broader economic growth and the positive impact of domestic lending policy reforms," the press release said. "Robust Chinese steel production is expected to remain a source of healthy demand for Cliff's Eastern Canadian Iron Ore and Asia Pacific Iron Ore businesses. Cliffs also anticipates the demand for the U.S. iron ore and North American coal businesses to remain healthy, despite lower year-over-year steel production in North America."
The company expects to maintain sales production in all markets except Eastern Canadian iron ore. In this segment it will increase production by about 500,000 tons for 2013.
For more information, visit Industrial Info's Metals & Minerals Database.
View Plant Profile - 1028441 1029179 1069140
View Project Report - 300007150 300056779
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Industrial Info is tracking $2.6 billion in projects for Cliffs, including the expansion of the Bloom Lake iron ore mine in Fermont, Quebec. The proposed $600,000 expansion will double the production of iron ore concentrate to 16 million tons per year on the current 30 million-ton-per-year open pit mine by early 2014. However, the project is running late. If the project progresses as planned, a second expansion will increase this production to 24 million tons per year by 2017. The company is currently pending final approval on the second expansion.
"We are pleased with the third quarter's operating and financial results," said Chairman of the Board James Kirsch in a press release. "During the quarter, we cut costs across the board, improved year-over-year sales margin, and lowered our full-year capital expenditures outlook. We have made good progress and have even greater investment and operational opportunities in our future. Ultimately, we will be driven by strategies that create the best options to deliver value to shareholders."
U.S. iron ore decreased in volume to 6.3 million tons, but these lower cost rates produced higher revenue per ton by 2%, up to $112.67 per ton. However, overall revenue for the segment was a mere $782.4 million, about $13.6 million less than the same period in 2012. A major customer's force majeure, and subsequent loss of contract, was a large contributor to lower revenue in this segment.
Wabush Mine in Newfoundland increased product sales, resulting in a 9% hike in volume for the Eastern Canadian Iron Ore segment. The mine sold an additional 1.1 million tons of ore concentrate and pellets in the quarter, boosting sales, while Bloom Lake Mine was stagnant. The segment brought in $284.2 million in revenue, much-needed growth compared to the 2012 revenue of $253.1 million.
Asia Pacific iron ore also saw an increase to $301.7 million in the third-quarter; however, volumes decreased due to Cockatoo Island's inactivity. 2012 revenue for the segment was $254.2 million and the increase is likely due to the higher market pricing and an absence of low-grade tons sold in the previous year.
North American coal saw a large decline in revenues, bringing in $178.3 million, down from the $241.8 million in 2012. Lower sales at Oak Grove Mine in Alabama were the driving force. Last year in the third quarter, the mine experienced an influx of catch-up commitments from the preceding severe weather.
An oil spill at the Pointe Noire port in Eastern Canada cost $18 million in casualty loss, and a $16 million rail contract gone south contributed to the miscellaneous expenses for the quarter; however, an insurance recovery of $6 million helped to offset these in a small way.
"Looking forward, the company expects China to maintain its healthy steel-making pace, driven by broader economic growth and the positive impact of domestic lending policy reforms," the press release said. "Robust Chinese steel production is expected to remain a source of healthy demand for Cliff's Eastern Canadian Iron Ore and Asia Pacific Iron Ore businesses. Cliffs also anticipates the demand for the U.S. iron ore and North American coal businesses to remain healthy, despite lower year-over-year steel production in North America."
The company expects to maintain sales production in all markets except Eastern Canadian iron ore. In this segment it will increase production by about 500,000 tons for 2013.
For more information, visit Industrial Info's Metals & Minerals Database.
View Plant Profile - 1028441 1029179 1069140
View Project Report - 300007150 300056779
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
