The currently produce DRI pellets and supply a few small steel companies in the Great Lakes region. In order for them to expand, they need to overcome the logistics around the problems and expense in shipping. It is going to take a joint effort between them and a main steel producer like Nucor to work it out.
You know, you should really team up with the Bare Ax Man and take your Captain and Tennille show on the road. I am really running out of singing duos unless Barry Manalow teams up with Elton John.
Humm, shipments of iron ore on the Great Lakes have doubled since Q1, seaborne iron ore prices have improved and met coal prices have been improving. Q1 CLF made 2 cents a share which included expensing some of the cost to build inventories, what makes anyone believe they are going to make less in Q2?
Coal mines will be sold and the Canadian assets will be gone, all I can say is that it will be done in 2015...
Carraba is a board member at Newmont, Key Corp, Aecon and Timken Steel.
Kirsch is a board member at Rayonier Advanced Materials.
Neither of them have an 8 to 5 job, but I think they are getting paid more than they are worth.
It happens every year, everyone attacks CLF's balance sheet and ignore the inventory build that is needed to replenish their customer's inventories ahead of the next frozen lake season.
In Q1, their slowest quarter, they managed to build inventories by $400 million, service their debt, reduce their debt and post a 2 cent a share profit.
NUE's problem is they have steel mills all over the country, each serving a regional area. I cuts down on shipping cost of the finished product and provides for better logistics to receive and process scrap steel as the key input. Unfortunately, this causes problems for supplying DRI pellets as you need volume to bring down the unit shipping cost. All of this considered, it is going to take a joint action between NUE and CLF to come up with a solution and I think it will happen.
Where I live now they have special eagle tours around the calving season. It appears the eagles love to eat the after birth and the ranchers provide perches for them to attract them to their fields. Anyway, kind of on the same line as beaver.
Think of it this way, at $1.5 billion and Quebec's participation, they could easily produce iron ore for under $50 a ton delivered to China. What steel company would not like a $50 a ton price locked in for 15 years?
With Quebec's participation, that means someone can buy it for $800 million to $1.6 billion and Quebec will buy the rail and port facilities separately.
Furthermore, the unions at Wabush have been notified by the court that all pensions will be cancelled eliminating future liabilities on CLF.
Yes CLF will get most of the money. The reason is simple, CLF is a secured creditor here and will receive all the money off the sale of their security up to the court approved lien amount. Basically, the sale of the mines, rails and port facilities will go to CLF, the sale of the equipment will go to the secured lien holders….
When I first moved to NC, I couldn't find where they sold liquor. Drove around and saw ABC stores, thought they were children learning stores! This went on for a couple months before I found out that ABC was the state run liquor stores. For a couple more months I got away with telling my wife I was headed down to look at the latest learning toys for the kids.