Key Challenges for Cliffs' Iron Ore Business in North America
Cliffs Natural Resources (NYSE:CLF) holds the distinction of being the largest producer of iron ore pellets in North America – a position it reinforced with the acquisition of Consolidated Thompson Iron Mines recently. While it also supplies direct-shipping lump and fines iron ore out of Australia and produces a significant amount of metallurgical coal, the North American iron ore business is undoubtedly the company’s mainstay – accounting for almost 60% of Cliffs’ value according to our analysis. In this article, we will try to detail the 2 prominent challenges that can significantly reduce the value of Cliffs’ iron ore business in North America. Cliffs competes with other international mining and natural resources companies like Vale (NYSE:VALE), BHP Billiton (NYSE:BBL) and Rio Tinto (NYSE:RIO). We maintain a $103 price estimate for Cliffs Natural Resources stock, a roughly 15% premium to the market price.
Complete Dependence on the Steel Industry
Iron oreComplete Story »