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Cliffs takes $2B in charges on acquisition, delays

CLEVELAND (AP) -- Cliffs Natural Resources Inc. said Thursday that it will record a series of charges in its fourth-quarter results that total about $2 billion.

The largest of these is a $1 billion non-cash charge related to expectations of lower volumes and higher costs from its acquisition of Consolidated Thompson Iron Mines Ltd.

Cleveland-based Cliffs bought the company in 2011 for about $5.09 billion. A delay in the expansion of Consolidated Thompson's Bloom Lake open-pit iron ore mine also contributed to the write down, Cliffs said.

Cliffs also said that it expects to incur $100 million to $150 million of other charges related to its Eastern Canadian iron ore business. In addition, the company said it expects to record an impairment charge of $365 million related to the recently approved sale of its 30 percent stake in a Brazilian mining operation.

And Cliffs expects to record $542 million in non-cash valuation allowances related to two of its deferred tax assets. The allowances are based on lower long-term pricing assumptions and the related effects on profitability and expected future tax payments.

Citi analyst Brian Yu backed his "Buy" rating for Cliffs stock, saying that the write off shouldn't come as a surprise to investors. He noted that the company's shares were already trading down after announcing the Boom Lake mine expansion delay and cutting its 2013 iron ore shipment forecast in November.

In afternoon trading, shares of Cliffs fell $1.12, or 3 percent, to $36.06. The stock has changed hands between $28.05 and $78.85 in the past 52 weeks.