The Board of Directors of Cliffs Natural Resources Inc. (CLF) has granted its approval to the company’s proposed chromite project, based in the Ring of Fire area of Northern Ontario, Canada, to move from the pre-feasibility to the feasibility study phase. Technical and economic evaluations will also be done in the feasibility study.
The company chose Sudbury, Ontario, due to various economic and technical factors that would best support the viability and success of the overall project. The project is also expected to provide jobs during construction and even promises employment opportunities once it is in operation.
However, the company’s final decision on the project is subject to various approvals. Cliffs is obliged to obtain provincial and federal environmental assessment approvals and negotiate mutually acceptable deals with affected First Nations communities. Since the Ring of Fire lacks proper facilities and infrastructure, Cliffs has to work with governments regarding this and complete commercial and technical feasibility studies.
The company needs to complete a few studies, including feasibility, and other project milestones, following which, it expects that most of the project's capital requirements would be fulfilled between 2014 and 2015.
Cliffs is the largest producer of iron ore pellets in North America. The company remains optimistic regarding its financial flexibility including its prospects for cash generation and the opportunities that will fund organic growth projects and return cash to shareholders.
Cliffs also has a significant presence in the Asia-Pacific region, where the demand is still robust, lending support to shipments. However, the prices for commodities have been under pressure due to the uncertain economic condition.
Cliffs, which competes with CONSOL Energy Inc. (CNX) and Alpha Natural Resources, Inc. (ANR), currently retains a Zacks #3 Rank, reflecting a short-term (1 to 3 months) Hold rating. Currently, we have a long-term (more than 6 months) Neutral recommendation on the stock.
ALPHA NATRL RES (ANR): Free Stock Analysis Report
CLIFFS NATURAL (CLF): Free Stock Analysis Report
CONSOL ENERGY (CNX): Free Stock Analysis Report
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