The Board of Directors of
Cliffs Natural Resources Inc.
) has granted its approval to the company's proposed chromite
project, based in the Ring of Fire area of Northern Ontario,
Canada, to move from the pre-feasibility to the feasibility study
phase. Technical and economic evaluations will also be done in the
The company chose Sudbury, Ontario, due to various economic and
technical factors that would best support the viability and success
of the overall project. The project is also expected to provide
jobs during construction and even promises employment opportunities
once it is in operation.
However, the company's final decision on the project is subject
to various approvals. Cliffs is obliged to obtain provincial and
federal environmental assessment approvals and negotiate mutually
acceptable deals with affected First Nations communities. Since the
Ring of Fire lacks proper facilities and infrastructure, Cliffs has
to work with governments regarding this and complete commercial and
technical feasibility studies.
The company needs to complete a few studies, including
feasibility, and other project milestones, following which, it
expects that most of the project's capital requirements would be
fulfilled between 2014 and 2015.
Cliffs is the largest producer of iron ore pellets in North
America. The company remains optimistic regarding its financial
flexibility including its prospects for cash generation and the
opportunities that will fund organic growth projects and return
cash to shareholders.
Cliffs also has a significant presence in the Asia-Pacific
region, where the demand is still robust, lending support to
shipments. However, the prices for commodities have been under
pressure due to the uncertain economic condition.
Cliffs, which competes with
CONSOL Energy Inc.
Alpha Natural Resources, Inc
), currently retains a Zacks #3 Rank, reflecting a short-term (1 to
3 months) Hold rating. Currently, we have a long-term (more than 6
months) Neutral recommendation on the stock.
ALPHA NATRL RES (ANR): Free Stock Analysis
CLIFFS NATURAL (CLF): Free Stock Analysis
CONSOL ENERGY (CNX): Free Stock Analysis Report
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