US miner Cliffs Natural Resources takes $1.4-bn write-down news
25 January 2013

Cliffs Natural Resources Inc, the largest US iron ore producer, said yesterday that the company will take $1.4-billion write-down mostly related to its 2011 acquisition of Canadian miner Consolidated Thompson Iron Mine Ltd.

Cliffs said a statement that it will include $1.4 billion of non-cash impairment charges and $542 million of non-cash deferred tax assets in its fourth quarter results, expected to be announced on 13 February.

Approximately $1 billion of write-down is related to Consolidated Thomson, which is primarily due to the project's less-than anticipated long-term volumes and higher capital and operating costs, as well as delay of phase-2 expansion of the Bloom Lake mine.

An amount of up to $150 million of charges is related to Cliffs' Eastern Canadian Iron Ore business, while $365 million pertains to the company's recent sale of its 30-per cent interest in Brazilian iron ore operation Amapa.

An additional non-cash valuation allowances related to two of the company's deferred tax assets including mineral resource rent tax in Australia and alternative minimum tax in the US amount to $542 million. These are primarily driven by lower long-term pricing assumptions and their impact on profitability and expected future tax payments, Cliffs said.

Cleveland-based Cliffs is an international mining company and a major iron ore producer. The company operates iron ore and coal mines in North America and iron ore mines in Western Australia. It also has a major chromite project in the feasibility stage of development in Ontario, Canada.





 search domain-b
  go
 
US miner Cliffs Natural Resources takes $1.4-bn write-down