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Cliffs looks to set records again

March 6, 2012
By JOHANNA BOYLE - Journal Staff Writer (jboyle@miningjournal.net) , Journal Ishpeming Bureau

MARQUETTE - Coming off of a record year in 2011, Cliffs Natural Resources is aiming to make 2012 another record. Growth, however, is not likely to come from the company's North American Iron Ore unit.

Cliffs Executive Vice President and President-Global Commercial Donald Gallagher and Executive Vice President, Legal, Government Affairs and Sustainability P. Kelly Tompkins were in Marquette this morning at the Holiday Inn for the company's annual community reception and update on its operations.

"Were working very hard to be sustainable and improve upon what happened in 2011," Gallagher said. "We're working to make it another record."

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In 2011, the company had a record $6.8 billion in revenues and an operating cash flow of $1.8 billion, a "remarkable" year, Gallagher said. Other accomplishments included acquisitions in Canada, being included in the Fortune 500 and Barron's 500 Top Companies lists, a global reorganization of the company and a return to profitability for the company's North American Coal.

Although as a global company Cliffs is growing, thanks to increased demand from developing countries such as China and the growth of its North American Coal unit, its North American iron ore operations, such as the Empire and Tilden mines in Marquette County, are expected to remain stable.

"Right at this moment, it doesn't appear there is huge growth in North America," Gallagher said. "It doesn't appear a new blast furnace will be built in our lifetime."

In addition, Gallagher addressed the life span of the Empire Mine, one of the main concerns of many of the business and community leaders who attended the breakfast.

"We would dearly love to expand Empire, but the current situation is that we have an agreement with our partner and customer that expires at the end of 2014 and we don't have an extension to that at this point in time. At this moment, barring some change, Empire will be phasing out over a period of time," Gallagher said. "The Empire situation is a challenge, there's no question about that."

Both Tompkins and Gallagher addressed the announcements that came in 2011 that the company would not continue with the renewaFUEL and iron nugget projects.

"We know they (the decisions) have consequences," Tompkins said. "We don't take for granted the communities we work in."

Globally, Cliffs is facing the challenge of meeting increased demand from developing countries like China while dealing with decreased natural resources, such as lower-quality ore.

Johanna Boyle can be reached at 906-486-4401.

 
 

 

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