Cliffs Restarts Wabush Plant
Cliffs Natural Resources Inc. (CLF) announced that it has restarted its Wabush Scully mine situated in the town of Wabush, Canada. Cliffs had temporarily halted productions and evacuated employees from the Wabush Scully mine owing to the forest fires in the region.
Cliffs stated that it regarded safeguarding its nearly 500 employees and their families from this fast spreading wildfire as a priority. Cliffs also joined the Wabush authorities to work with volunteers and equipment to create a firebreak. The company also provided food and lodging facilities in Wabush and Fermont.
The town of Wabush withdrew its emergency evacuation order and reduced the threat level back to an evacuation alert. Cliffs called back its workers on July 1, and the mine is now fully operational.
Cliffs had also temporarily suspended the environmental assessment activities for its Chromite Project in the “Ring of Fire” region of Northern Ontario on Jun 12 due to certain unresolved issues. The issues that led to the suspension included delayed approval of the Terms of Reference for the provincial Environmental Assessment (EA) process, unresolved land surface rights issues and unfinished agreements with the Government of Ontario among others. Once these issues are resolved, Cliffs will go ahead with the project.
Suspending productions may affect Cliff’s financials and this production halt comes after the company suffered lower profit on a reported basis in first-quarter 2013. Though earnings beat the Zacks Consensus Estimate, sales missed the same. Also, lower iron ore pricing, partly due to oversupply in the industry, continues to challenge international mining and natural resources of the company.
The prices for commodities are expected to remain under pressure due to the uncertain economic environment. Cliffs also contends with higher labor and mining costs.
However, Cliffs remains optimistic about its financial flexibility, including its prospects for cash generation and opportunities that will fund organic growth projects and return cash to shareholders. It also has a significant presence in the Asia-Pacific region, where demand is still robust.
Cliffs currently retains a Zacks Rank #3 (Hold).
Other companies in the mining industry worth considering are Brigus Gold Corp. (BRD), with a Zacks Rank #1(Strong Buy), and Claude Resources, Inc. (CGR) and Lake Shore Gold Corp. (LSG), both carrying a Zacks Rank #2 (Buy).
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Read the Full Research Report on CGR
Read the Full Research Report on BRD
Read the Full Research Report on LSG
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