According to Reuters,
Cliffs Natural Resources Inc.
) and Anglo American Plc. are set to divest their Amapa iron ore
operation in Brazil to a single entity. Ohio-based Cliffs stated
that the value of Amapa will be adjusted to reflect the fair
value of its investment. The companies did not disclose the value
of the deal.
Cliffs holds a 30% stake in the Amapa mine while the rest is
owned by Anglo American. Cliffs expects to incur a charge of
around $380 million to $420 million related to the divestiture
for the year ended December 31, 2012.
Cliffs, in November 2012, announced its decision to halt
production at two of its U.S. iron ore operations, Northshore
Mining in Minnesota and Empire Mine in Michigan. The company also
announced that it will delay portions of its Bloom Lake Mine
Phase II expansion in Quebec. The company took these steps to
adjust its 2013 operating plans for its North American iron ore
businesses to align with expected sales volumes.
Cliffs released its third-quarter 2012 results in October
2012. The company posted earnings of 59 cents per share in the
quarter, down 85.8% from $4.15 reported in the year-ago quarter.
Declining iron ore prices and higher costs led to the slump in
earnings. Earnings from continuing operation came in at 61 cents
a share in the quarter. By that measure, it largely missed the
Zacks Consensus Estimate of $1.05.
Sales for the quarter came in at $1,544.9 million, down 26%
from $2,089.1 million in the prior-year quarter, missing the
Zacks Consensus Estimate of $1,742 million. The decline in
revenues resulted from a 36% year-over-year drop in seaborne iron
ore pricing and higher labor, mining and maintenance costs.
Cliffs, which competes with
CONSOL Energy Inc.
Alpha Natural Resources, Inc.
), currently retains a short-term Zacks #5 Rank (Strong Sell).
Currently, we have a long-term (more than 6 months) Underperform
recommendation on the stock.
ALPHA NATRL RES (ANR): Free Stock Analysis
CLIFFS NATURAL (CLF): Free Stock Analysis
CONSOL ENERGY (CNX): Free Stock Analysis
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