Key Challenges for Cliffs' Iron Ore Business in North America

Trefis submits: Cliffs Natural Resources (CLF) has been reinforcing its position as the largest producer of iron ore pellets in North America. It is also a major supplier of direct-shipping lump and fines iron ore out of Australia. Moreover, in recent years it has forayed into the coal business and is today a significant producer of metallurgical coal.

Trefis submits: Cliffs Natural Resources (CLF) is an international mining and natural resources company. It is the largest producer of iron ore pellets in North America and a major supplier of direct-shipping lump and fines iron ore out of Australia. It is also a significant producer of metallurgical coal.

Trefis submits: Cliffs Natural Resources (NYSE:CLF) could be looking at another good year in 2011. After ending 2010 on an extremely profitable note, the company could get another helping hand from rising global iron ore prices. Cliffs looks poised to capitalize on its position as the largest producer of iron ore pellets in North America.

Trefis submits: Cliffs Natural Resources (NYSE:CLF) has been able to leverage its position as the largest producer of iron ore pellets in North America to forge long-standing relationships with some of the largest steel manufacturers in the world.

Trefis submits: Cliffs Natural Resources (NYSE:CLF) announced that underground mining operations at its Oak Grove mine in Alabama, have now resumed after being stopped abruptly 2 weeks ago - after the mine was hit by severe weather, including a tornado storm on April 28th.

Trefis submits: The world's number two iron ore miner, Rio Tinto (NYSE:RIO), will cut its existing iron prices for the Chinese steel mills by 2%-3% for the third quarter. The new pricing will put Rio’s 62% Pilbara Blend fines at $168.85 per tonne for the Q3 compared to $171.35 during Q2, 2011. We estimate that during 2011, the average realized iron ore price for Rio Tinto will be around the $100 per tonne.

For the second week in a row, an overpriced Canadian acquisition has come back to haunt the global mining giant that made it. Last week, Rio Tinto Ltd. axed its chief executive as it announced up to US$11-billion of writedowns tied to its acquisition of Alcan Inc. On Thursday, the bad news came from Cliffs Natural Resources Inc., which plans to write off US$1-billion of goodwill from its takeover of Consolidated Thompson Iron Mines Ltd.

Trefis submits: The average iron-ore price realized by Rio Tinto (NYSE:RIO) has increased historically through 2008 driven by Chinese demand for iron ore and a continuous rise of international sea freight but declined in 2009 due to the economic crisis. Backed by strong global demand post-crisis, Rio’s average iron-ore price increased to $101 per ton in 2010.