Friday, July 27, 2007
Jul. 27, 2007 (McClatchy-Tribune Regional News delivered by Newstex) --
Improved iron ore pellet pricing and sales helped Cleveland-Cliffs (NYSE:CLF) Inc. reach a record $547.6 million in revenue in the second quarter.
It was another impressive quarter for the iron ore supplier that holds ownership and manages three iron ore mines in Minnesota and two in Michigan.
Last year, Cleveland-Cliffs recorded $486.2 million in revenue during the second quarter.
'In addition to delivering solid results in the quarter, we continued to increase our presence as a global mining company with a definitive agreement to acquire PinnOak Resources LLC, including its three metallurgical coal mines, as well as an agreement with QCoal for a 45 percent economic interest in the Sonoma Coal Project in Australia,' said Joseph Carrabba, Cleveland-Cliffs' chairman, president and chief executive officer. 'Our North American franchise remains a strong core for the business as we continue to execute our strategy to diversify products and Cliffs' geographical reach.'
The company also holds majority ownership in an Australian iron ore operation.
Sales of iron ore pellets in North America during the quarter were 5.4 million tons, an 11 percent increase compared to 4.9 million tons in the second quarter of 2006.
North American revenues were up 10 percent to $359.8 million, compared with $327.9 million last year. Sales margins were up 3 percent to $104.4 million.
Iron ore pellet production at Cliffs' North American plants was 9.5 million tons in the quarter. Last year, second quarter production was 8.6 million tons.
The Tilden Mine in Michigan's Upper Peninsula topped all Cliffs' mines in the quarter with 2.3 million tons of iron ore pellets. Hibbing Taconite produced 2.1 million tons; Northshore Mining Co., 1.3 million tons; and United Taconite, 1.4 million tons.
Construction is under way at Northshore Mining Co. in Silver Bay to restart an idled pellet furnace. Beginning in 2008, the additional furnace would boost production by 800,000 tons annually.
Company officials say its North American mines are projected to run near or at capacity through 2007, producing about 35 million tons of iron ore pellets.
Strong domestic demand, continued consolidation within the U.S. steel industry and growth in Asian steel production are forecast, which would be favorable for Cleveland-Cliffs, Carrabba said.
Operating revenue for the second quarter slipped to $115.9 million, compared with $116.4 million in 2006, primarily because of additional expenses for current and future growth.
LEE BLOOMQUIST can be reached weekdays at (800) 368-2506, (218) 744-2354 or by e-mail at
lbloomquist@duluthnews.com. Newstex ID: KRTB-0055-18474615
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