The Rising Influence of Rising Affluence

[DewDiligence]

…then we'll know if CLF can be cost competitive.

CLF sells iron products to two distinct markets, and it’s important to distinguish between them. They sell iron-ore pellets mined in the upper Midwest to US steelmakers, and they sell iron ore per se mined in Quebec and Australia for the seaborne market. CLF’s production costs are relatively high at the US mines, but they are selling to what is essentially a captive market. CLF’s production costs are lower in Australia and they eventually will be lower in Quebec, although it has taken longer than expected to make the cost cutting a reality.

I don’t think there’s any question whatsoever about the company’s survival. CLF could probably receive attractive bids right now from BHP, RIO, and VALE if the BoD decided to throw in the towel on remaining independent.