Cliffs Natural Resources Inc. recently announced that it expects to idle its Wabush Pointe Noire pellet plant within the city of Sept-Iles in Quebec by the end of the second quarter of 2013.
The Company indicated that its decision to idle its iron ore pellet operation is due to high production costs and lower pellet premium pricing which is expected to persist in certain markets during the year.
The Company's current product mix in its Eastern Canadian Iron Ore business segment is comprised of iron ore pellets and concentrate. Cliffs expects to idle production at its Pointe Noire iron ore pellet plant and transition to producing an iron ore concentrate only product from its Wabush Scully mine in the Province of Newfoundland and Labrador by the end of the second quarter in 2013.
For 2013, Cliffs is maintaining its full-year sales and production volume expectations of 9 - 10 million tons out of its Eastern Canada business segment. This is comprised of approximately 3 million tons of both iron ore pellets and concentrate products from its Wabush operation with Bloom Lake Mine making up the remainder of the expected sales volume.
Full-year 2013 cash cost per ton in Eastern Canadian Iron Ore is expected to be $95 - $100, down from the Company's previous expectation of $100 - $105.
For full-year 2013, cash cost per ton at Wabush is expected to be $115 - $120. The Company is maintaining its full-year 2013 Eastern Canadian Iron Ore revenue-per-ton expectation of $120 - $125. This revenue-per-ton expectation is based on the 62% Fe iron ore fines price assumption of $150 per ton used in the Company's Feb. 12, 2013 press release.
The Wabush mine and concentrator are located near the town of Wabush, Newfoundland and Labrador, and the pellet plant and dock facility are located in Pointe Noire, Quebec.
The entire Pointe Noire complex is comprised of a pellet plant, railroad and port. The Company will continue to operate the rail and port operations and proceed with its multi-year investment in the port's expansion that includes a ship loader for large cape-size vessels.
The Pointe Noire shipping facility serves the Company's Wabush and