Cliffs to Cut Metallurgical Coal Production
04/13/2009 - Cliffs Natural Resources announces plans to cut back met coke production at its mines in West Virginia and Alabama in its effort to align production with demand.
Cliffs Natural Resources Inc. is taking a number of steps at its mines in West Virginia and Alabama as part of its continued effort to align 2009 production with customer demand. The company said the moves were prompted by continuing softness in the demand for metallurgical coal used by the steel industry.
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Cliffs’ Pinnacle, Green Ridge No. 1 and Oak Grove mines produce metallurgical coal for the steel industry.
Metallurgical coal demand has been reduced as the steel industry has cut back production as a result of the global economic slowdown.
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In Alabama, Cliffs’ wholly owned subsidiary Oak Grove Resources, LLC will also reduce operating levels, which will result in the layoff of about 65 employees at its Oak Grove mine and Concord Prep Plant.
“We are making these production adjustments due to the reduced demand for metallurgical coal in the United States and throughout the world,” said Don Gallagher, President of Cliffs Natural Resources’ North American Business Unit. “As we go forward, we will continue to review our operating levels to ensure that we balance our production and inventory with customer demand.”
The company noted the announced production adjustments will put the current 2009 annual operating rate at approximately 2.2 million tons.
Cliffs Natural Resources Inc., an international mining and natural resources company, is the largest producer of iron ore pellets in North America, a major supplier of direct-shipping lump and fines iron ore out of Australia and a significant producer of metallurgical coal. Cliffs has a $1.88 billion (€ 1.42 billion) market capitalization as of March 30, 2009, and at the end of 2008, had $3.6 billion in revenues and $940 million in operating income.
Cliffs Natural Resources is organized through three geographic business units, including the North American business unit, which comprises six iron ore mines owned or managed and two coking coal mining complexes. The Asia Pacific business unit comprises two iron ore mining complexes in Western Australia and a 45% economic interest in a coking and thermal coal mine in Queensland, Australia. The Latin American business unit includes a 30% interest in the Amapá Project, an iron ore project in the state of Amapá in Brazil, as well as a number of smaller greenfield projects not yet in production.
Cliffs has been actively executing a strategy designed to achieve scale in the mining industry and focused on serving the world’s largest and fastest-growing steel markets.
