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Cliffs (CLF) Inks 20-Year Energy Agreement for Michigan Mine
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Cliffs Natural Resources Inc.’s (CLF - Free Report) Tilden Mining Company has entered into a 20-year energy agreement with WEC Energy Group (WEC - Free Report) to receive a steady and affordable source of electric power for the Tilden mine in Michigan.
Cliffs has been operating in the Upper Peninsula of Michigan for decades and the new agreement boosts its ability to continue operations for a number of years. The company’s Tilden mine, which is one of the most operationally efficient manufacturers of pellets for the U.S. steel industry, produces some of the highest quality pellets in the country.
The agreement between Cliffs and WEC Energy ensures consistent and economical energy supply for Upper Peninsula, MI. It will provide the Tilden mine with clean and cost-effective energy, and the residents of the region with reliable energy supply. To supply the required energy, WEC Energy plans to build, own and manage 170 MW of new natural gas capacity in two sites in the Upper Peninsula. Subject to regulatory approvals, the facilities are expected to begin operating in 2019. This is expected before the retirement of the company’s Presque Isle Power Plant.
Shares of Cliffs rose around 5.5% to close at $6.70 on Aug 15.
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.
Cliffs currently holds a Zacks Rank #2 (Buy).
Other equally ranked companies in the mining space include Fortescue Metals Group Limited (FSUGY - Free Report) and Kumba Iron Ore Ltd. (KIROY - Free Report) .
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Cliffs (CLF) Inks 20-Year Energy Agreement for Michigan Mine
Cliffs Natural Resources Inc.’s (CLF - Free Report) Tilden Mining Company has entered into a 20-year energy agreement with WEC Energy Group (WEC - Free Report) to receive a steady and affordable source of electric power for the Tilden mine in Michigan.
Cliffs has been operating in the Upper Peninsula of Michigan for decades and the new agreement boosts its ability to continue operations for a number of years. The company’s Tilden mine, which is one of the most operationally efficient manufacturers of pellets for the U.S. steel industry, produces some of the highest quality pellets in the country.
The agreement between Cliffs and WEC Energy ensures consistent and economical energy supply for Upper Peninsula, MI. It will provide the Tilden mine with clean and cost-effective energy, and the residents of the region with reliable energy supply. To supply the required energy, WEC Energy plans to build, own and manage 170 MW of new natural gas capacity in two sites in the Upper Peninsula. Subject to regulatory approvals, the facilities are expected to begin operating in 2019. This is expected before the retirement of the company’s Presque Isle Power Plant.
CLIFFS NATURAL Price
CLIFFS NATURAL Price | CLIFFS NATURAL Quote
Shares of Cliffs rose around 5.5% to close at $6.70 on Aug 15.
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.
Cliffs currently holds a Zacks Rank #2 (Buy).
Other equally ranked companies in the mining space include Fortescue Metals Group Limited (FSUGY - Free Report) and Kumba Iron Ore Ltd. (KIROY - Free Report) .
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>