Can't be much, for Q3 CLF's accounts receivable were extremely low. Just pull up the 10Q. You can bet that any amount that is owed must be paid if they are to receive the iron ore the monitor needs to buy from CLF to get Essar through the winter. You really need to read the report of the Monitor for the CCAA in this matter. Don't need a statement from CLF.
LG has become an expert on the CCAA. What a move with Essar. LG positioned CLF with a minimal account receivable with Essar and then put CLF in the driver's seat on Essar using some of their reorganization financing to buy pellets under CLF's terms which more than likely will involve Essar paying CLF everything that is due, including any lawsuit award.
I read the Report, seems to me they secured $200 million financing, not selling assets, just need to renegotiate debt. Key to the reorganization is to get iron ore supply from CLF because of the high cost of ore from their alternate suppliers. The US courts have ruled in CLF's favor on the contract issues, seems to me that the CCAA can't force the issue, they are going to have to present an acceptable offer.
If MFC will do nothing, why did they file the motion? None of you argument on this matter makes sense. MFC and LG are playing a game here and I think MFC is out of their league.
Ok, so CLF and Essar go to court in December to determine the amount Essar will owe CLF. This action comes after the filing, so does the award go into the bankruptcy or is it outside of it that Essar will have to pay?
$9,000 is the current cost based on fuel prices and you can bet if CLF is supplying NUE, that cost will be much less. As I had stated, I was thinking products would be shipped out of Minneapolis as I had stated, but the state has access to deeper water ports that can handle this freight. Cost after reaching the ports are about the same for seaborne ships and barges at about $9 a ton. CLF has to ship by rail to any port on the Great Lakes as the mines are not on the lake shore.
From the waterways council:
"The Upper Mississippi River provides Minnesota docks access to Great Lakes by way of the Illinois River, the Ohio River System and the ports of the Lower Mississippi and Gulf of Mexico and international market opportunities by way of these deep draft ports. "
9% is ore and minerals, 5% is steel.
to operate a tug and barge is around $9,000 a day which puts the cost at around $5 a ton. The cost to ship ore from Brazil to the US is $35 a ton, so that gives CLF 7 days to move ore down the river. Assuming a barge moves at 10 mph, that would allow them to reach 1600 miles.
You are so easy to set up, from NNAV:
"Steel mills and their customers are fastest growing users of barge transportation in the nation. With many steel mills now working at or close to capacity, barge carriers benefit from the mills' seemingly unquenchable appetite for scrap steel, iron ore, pig iron, coal and coke. Much of this arrives by rail, of course, but barges play an increasingly important role in their transportation.
The Mississippi River and its immediate tributaries handle most of the nation's barge traffic, about 322 million tons of freight per year. The Ohio River system is second, with 238 million tons a year. About two-thirds of this is dry bulk material, as opposed to chemicals, oil and gas, which make up about seven percent. Additionally, substantial numbers of tugs and barges move along the East Coast via the Intercoastal Waterway and, at the other end of the country, in Puget Sound.
From 1994 to 2000, the volume of dry cargo moving by barge grew by almost 60 million tons. Iron and steel commodities grew the fastest, followed by grain. At the present time, coal is the largest single commodity hauled, but it is expected to become second to finished steel shipped by barge to fabricators."
What the BK coal companies will get rid of is the mines that caused them to go BK in the first place, the high cost Canadian and European mines. Just pull up the 10Q of these coal miners and it is easy to see their problems, buying high cost mines during the boom. Then look at Coronado Coal where they limit their purchases of met coal mines to times like today where they can get a good price that insures they make money today.
They were getting their pellets from Vale and the plant was running at a loss. The problem is the amount of time and energy that is required to covert a pellet to a DRI pellet with the removal of silica requiring the most time and energy. CLF's DR low silica pellet solves this problem and will speed up the DRI process. There is suppose to be a large scale sample run from CLF and that should tell Nucor which direction they need to go.
I was looking at the Mississippi River ports and I think they can barge down pellets to Louisiana out of Minneapolis. Since Nucor would be running a JIT inventory, barges could handle their demand. The downside for the Vale supply chain is the huge inventory they have to take on every shipment.
I expect something in December, just like last year. Low cost US mines are much more desirable than the high cost Canadian and European mines.
The current pellet price tells us that the world is oversupplied with pellets, so taking this production off the market will just make the price of pellets rise and the advantage will remain to the local suppliers. The big gainer here will be CLF locking up Nucor as they have been getting their pellets from Vale.
Without the infrastructure, it is totally worthless. But if MFC ever hopes to get another miner in there in the future, they need to keep the infrastructure in place. If they have no plans to sell or work this mine in the future, why go through the legal expenses to fight CLF and tell CLF to take all of their assets.
Not only the rail and the port facilities, Quebec wants the vast prime land holdings at the port that is key to full development of the port.
The Wabush mine is worthless to all except MFC that holds the royalty rights. MFC needs all of the movable assets to stay if they ever hope to get the mine operating at a low enough cost to make a profit. Those assets should be worth $50 million.
I miss read the expansion, thought they went from 8.3 million tons to 30.5, instead it was a 8.3 million ton increase. However, back in 2008, the mine was producing 15 million tons.