Newly-named Cliffs Natural Resources Inc. (NYSE:CLF) is slowing production at two of its Minnesota iron ore mines in order "to bring production in line with demand." Three furnaces capable of producing 300,000 tons of pellets a month will be shut down. That’s an annualized reduction of nearly 30% at the two locations and about 16% of total North American annual production.
The company said the shutdown will begin immediately and will "resultin workforce adjustments at the locations." The president of thecompany’s North American business unit attributed the shutdown to lowersteel production resulting from the slowdown in the North Americaneconomy.
Cliffs has scheduled a shareholder vote on its proposed merger withAlpha Natural Resources (NYSE:ANR). Alpha shareholders are alsoscheduled to vote on the offer next month.
Maybe slowing production isn’t so bad. The interests of shareholdersare often different than those of employees and local economies.Cliffs shares are up 2% at $22.69.
October 28, 2008