At these prices, buying is low risk. Just the bond buyback will see CLF adding cash without increasing total long term debt or selling a single asset.
Once you totally shut down a mine and restore the land as per plan filed with the Minister of Mines, it takes up to 2 years to bring the mine back. CLF needs to have a fully operating mine in order to sell it when iron ore prices turn positive. By not totally shutting down the mine tells me CLF has some type of plan in the works.
Suspending operations at BL and keeping 80 employees to maintain assets.
Bond buyback to retire long term debt at a 35% discount.
Generating $500 million in cash off the bond buyback without increasing total debt.
My opinion is that the Nucor deal to JV Bloom Lake is still on, not going to start production until the upgrades are in place.
At least they are keeping on maintenance workers which means the mine will be full operational unlike Wabush where they are proposing to remove all buildings, rail and flood the mine.
There were other reasons for the run up, the China interest rate cut was just part of it, look closer.
Just think how much debt CLF could retire at 40 cents on the dollar. $1.3 billion bond purchase could totally wipe out all of CLF's long term debt.
Good buy, we are back to day traders controlling the price move. High volume and big price swings. With the Chinese rate cut and stimulus spending, iron ore has bottomed. BHP making spending cuts is an indication that the over production may be ending as share holders are adding pressure to the company.
I am all for buying these bonds back at a discount. CLF should stop all dividends and use that money to buy back more bonds.
Come on guys ignore these impostors, this is not dow5000, look close it is dow50,000! Most likely Solarman playing with you all!
$10 is much better than the iron ore producers that are taking a $50 hit, really don't see a problem here!
You are correct as I have mentioned in the past, there is no secret why CLF dominates the US market, they set the price to the steel mills based on cost of the major producers to provide iron ore pellets delivered to the mills not the current spot price. There just isn't the margins for the majors to produce pellets and deliver them to the US mills under a JIT inventory system.