I have three problems with the majority of what I have heard on both the Noront Hub and the Freewest Hub with regards to Cliffs Natural Resources.
The first is that they are an experienced chromite/fero-chorome producer. Looking through their website and last years financial reports I found no evidence of Cliffs producing a single tonne Chorimum of let alone enough to be considered one of the most experience chormite miners in the world. They do purchase Ferochrome from South Africa, which to me would explain their interest in the Ring of Fire not to be responsible for setting up a mine but as potential opportunity to purchase ferrochrome from a stable guaranteed producer at their back door.
The second problem I have is the talk of Cliffs as a Major mining company, a mid tier producer and operator, but with 10 operable mines 6 Iron ore 4 Coal of which 2 they are minority owners of , it is hard to put them in a list with Teck let alone Vale or Xstrata. In 2008 Cliffs produced 31.1 tonnes of Iron pellets for themselves and 12.5 million tonnes of Iron pellets for the steel manufactures who the operate mines for and 3.1 million tonnes of coal. To put this in perspective Heamersley Iron in Australia produced 95.5 million tonnes of Iron ore pellets and Antelope mine in the US produced 32 million tonnes of coal (both mines are owned by Rio).
The third is this statment in the 2008 Cilffs finacial report. Now I realize that the recession was not nearly as bad as feared,but mining companies tend to be very slow when it comes to changing conservative mind sets.
"Although we currently have adequate liquidity, if the current global economic crisis extends beyond 2009, we may have difficulty maintaining adequate liquidity.
Based on our current borrowing capacity and the actions we have taken in response to the global economic crisis to conserve cash, we have adequate liquidity and expect to fund our business obligations from available cash, current operations and borrowing under our current credit facilities. However, if the current economic crisis deepens into a long term downturn, it is possible that we will face liquidity issues that will negatively impact our cash flow or borrowing capacity. In such circumstances, we may be forced to access higher cost forms of capital."
