Cliffs Natural Resources Inc.
) 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
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
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
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.
), with a Zacks Rank #1(Strong Buy), and
Claude Resources, Inc.
Lake Shore Gold Corp.
), both carrying a Zacks Rank #2 (Buy).
BRIGUS GOLD CP (BRD): Free Stock Analysis
CLAUDE RSRCS (CGR): Free Stock Analysis
CLIFFS NATURAL (CLF): Free Stock Analysis
LAKE SHORE GOLD (LSG): Free Stock Analysis
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