Cleveland-Cliffs Inc. (CLF - Free Report) announced that its employees in Michigan and Minnesota, represented by the United Steelworkers (USW), have ratified a new four-year labor contract. The contract is effective Oct 1, 2018 through Sep 30, 2022.
The contract covers around 1,800 USW-represented workers at Tilden and Empire mines in Michigan, and United Taconite and Hibbing Taconite mines in Minnesota.
The contract offers the company a competitive cost structure. It also reflects Cleveland-Cliffs’ strong partnership with the USW.
Cleveland-Cliffs, which is among the prominent iron ore mining companies along with BHP Billiton Limited (BHP - Free Report) , Rio Tinto plc (RIO - Free Report) and Vale S.A. (VALE - Free Report) , raised its U.S. Iron Ore volume expectation to 21 million long tons in July. Production volume expectation was maintained at 20 million tons. The company also reduced sustaining capital expectation by $10 million to $75 million for 2018.
In the second quarter, the company’s U.S Iron Ore pellet sales volume was up year over year on increased demand and adaptation of the new revenue recognition accounting standard. Moreover, cash cost of goods sold and operating expense per long ton increased year over year on higher costs related to energy rates, product mix, employee-related expenses, repairs and royalties.
Cleveland-Cliffs, in August, completed the sale of its Asia Pacific Iron Ore assets to Mineral Resources Limited. The company’s previously disclosed costs of closing the Australian operations were reduced by roughly $85 million due to this transaction.
Notably, Cleveland-Cliffs will record reversal of currency translation adjustments in the third quarter resulting from the deal. This is expected to lead to a positive contribution to net income of roughly $230 million or 75 cents per share.
Cleveland-Cliffs Inc. Price and Consensus
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