October 28, 2008
Cliffs Natural Resources Inc. To Idle Three Iron Ore Pellet Furnaces
Cliffs Natural Resources Inc. (NYSE: CLF), a global mining and natural resources company, today reported that it has initiated production curtailments at two of its six North American Iron Ore mines.
Cliffs indicated that the curtailments were necessary to bring production levels in line with demand. Cliffs will temporarily idle two small pellet furnaces at Northshore Mining and one small pellet furnace at United Taconite. Both locations are in Minnesota. On a combined basis, the three furnaces have monthly pellet production capacity of approximately 300,000 tons.
Donald J. Gallagher, president of Cliffs' North American Business Unit, said, "We have seen the steel market soften in recent weeks due to the slowdown in the North American economy. Today, the domestic steel and iron ore industries are better positioned than in the past to weather downturns such as this, and while we regret having to take this action, production and demand must be balanced to meet customer needs and to ensure the continued health of the business."
The idling of the furnaces will begin immediately and result in workforce adjustments at the locations.
Cliffs indicated its Northshore Mining and United Taconite operations have the capacity to produce nearly 6 million tons and 5.5 million tons, respectively, of iron ore pellets per year.
As a result of the curtailment, Cliffs expects 2008 equity production in its North American Iron Ore unit of approximately 23 million tons.
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ABOUT CLIFFS NATURAL RESOURCES INC.
Cliffs Natural Resources Inc., headquartered in Cleveland, is an international mining company, the largest producer of iron ore pellets in North America and a major supplier of metallurgical coal to the global steelmaking industry. The Company operates six iron ore mines in Michigan, Minnesota and Eastern Canada, and three coking coal mines in West Virginia and Alabama. Cliffs is also majority owner of Portman Limited, a large iron ore mining company in Australia, serving the Asian iron ore markets with direct-shipping fines and lump ore. In addition, the Company has a 30% interest in the Amapa Project, a Brazilian iron ore project, and a 45% economic interest in the Sonoma Project, an Australian coking and thermal coal project.
News releases and other information on the Company are available on the Internet at: http://www.cliffsnaturalresources.com or www.cliffsnaturalresources.com/Investors/Pages/default.aspx?b=1041&1=1
This news release contains predictive statements that are intended to be made as "forward-looking" within the safe harbor protections of the Private Securities Litigation Reform Act of 1995. Although the Company believes that its forward-looking statements are based on reasonable assumptions, such statements are subject to risk and uncertainties.
Actual results may differ materially from such statements for a variety of reasons, including: changes in the sales volumes or mix; the impact of other price-adjustment factors on the Company's sales contracts; changes in demand for iron ore pellets by North American integrated steel producers, or changes in Asian iron ore demand due to changes in steel utilization rates, operational factors, electric furnace production or imports into the United States and Canada of semi-finished steel or pig iron; the impact of consolidation and rationalization in the steel industry; availability of capital equipment and component parts; availability of float capacity; changes in the financial condition of the Company's partners and/or customers; rejection of major contracts and/or venture agreements by customers and/or participants under provisions of the U.S. Bankruptcy Code or similar statutes in other countries; events or circumstances that could impair or adversely impact the viability of a mine and the carrying value of associated assets; inability to achieve expected production levels; reductions in current resource estimates; failure to receive or maintain required environmental permits; problems with productivity, labor disputes, weather conditions, fluctuations in ore grade, tons mined, changes in cost factors including energy costs, transportation, mine closure obligations and employee benefit costs; the ability to identify, acquire and integrate strategic acquisition candidates and the effect of these various risks on the Company's future cash flows, debt levels, liquidity and financial position.
Reference is also made to the detailed explanation of the many factors and risks that may cause such predictive statements to turn out differently, set forth in the Company's Annual Report and Reports on Form 10-K and previous news releases filed with the Securities and Exchange Commission, which are publicly available on Cliffs Natural Resources' website. The information contained in this document speaks as of the date of this news release and may be superseded by subsequent events.