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Cleveland-Cliffs Inc. (CLF) - free report >>
Kumba Iron Ore Ltd. (KIROY) - free report >>
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Cliffs (CLF) Announces Tentative Labor Agreement with USW
Cliffs Natural Resources Inc. (CLF - Free Report) declared that it has reached a tentative agreement on a 3-year labor contract with the United Steelworkers (“USW”). The contract will be effective from Oct 1, 2016.
The new agreement will cover roughly 2,000 of the Cliffs’ USW-represented workforce in the Tilden and Empire mines, MI as well as the United Taconite and Hibbing Taconite mines, MN. The company is expected to benefit from a competitive cost structure upon finalization of the contract.
The USW local union members are yet to ratify the agreement. No other details regarding the contract will be disclosed before the approval.
CLIFFS NATURAL Price
CLIFFS NATURAL Price | CLIFFS NATURAL Quote
Shares of Cliffs fell around 2.2% to close at $5.77 on Aug 26.
Cliffs’ adjusted earnings of 6 cents per share and sales of $496.2 million for the second quarter of 2016 topped the respective Zacks Consensus Estimate. The company raised its 2016 sales volume guidance for its U.S. Iron Ore division from 17.5 million long tons to 18 million long tons. The production volume guidance for 2016 has also been raised by 500,000 long tons to 16.5 million long tons.
Cliffs remains focused on reducing debt. Its total debt fell around 4% year over year to $2.7 billion at 2015 end and further reduced to $2.5 billion at the end of the last reported quarter. In the second quarter of 2016, the company paid off the remaining balance of the outstanding equipment loans of $23 million. These measures will also help reduce Cliffs’ interest expenses.
Management has lowered its interest payment guidance from $220 million to $200 million for 2016. The company also received $31 million in cash as part of a long-term purchased power arrangement with Minnesota Power in the quarter.
Cliffs currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the mining space include Fortescue Metals Group Limited (FSUGY - Free Report) , Coeur Mining, Inc. (CDE - Free Report) and Kumba Iron Ore Ltd. (KIROY - Free Report) , all holding a Zacks Rank #2 (Buy).
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