Cliffs to idle Canada mine, cut spending in 2014
CLEVELAND (AP) — Cliffs Natural Resources Inc. on Tuesday cut its 2014 spending plans to less than half last year's level and said it plans to idle production at a Canada mine.
The Cleveland-based company said it plans to stop operations at the Wabush Scully mine in the province of Newfoundland and Labrador by the end of the first quarter because the mine's costs are too high. The move will result in a charge of $183 million in the fourth quarter and a $100 million charge in 2014.
About 500 employees at the Wabush Scully mine and a Pointe Noire rail and port operation in Québec will be affected. Cliffs had also idled its Wabush mine's Pointe Noire pellet plant in June.
Cliffs also plans to suspend its expansion plan at its Bloom Lake mine in Québec, given the uncertain outlook for iron ore prices. The company may idle activities at Bloom Lake if prices fall too low.
Casablanca Capital LP, which owns about 5 percent of Cliffs stock, has pushed the company to cut costs and spin off the Bloom Lake project and other international assets.
The company anticipates its capital spending of $375 million to $425 million this year. Capital spending was $862 million in 2013.
Cliffs is expected to report its fourth-quarter results on Thursday.
Shares of Cliffs slipped 15 cents to $21.35 in after-hours trading. The stock had increased 92 cents, or 4.5 percent, to close at $21.50 Tuesday, but is off 41 percent in the past 12 months.