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NEW YORK (Dow Jones)--Cliffs Natural Resources (CLF) is looking to consolidate
its foothold in Asian markets as part of a plan to push its share of revenue
from international sales above 50%, the company's chief executive said Thursday.
"One of our founding strategies is diversification of markets," Joseph
Carrabba said in an interview. The company's acquisition this year of Canadian
miner Consolidated Thompson Iron Mines Ltd., which had a robust export business,
was done to largely improve access to fast-growing Asian steel markets.
The Cleveland-based company, the largest U.S. iron ore producer, began its
international push in 2005 with its acquisition of Australian iron ore company
Portman Ltd., and in May completed its $5 billion purchase of Consolidated
Thompson. Carrabba said Cliffs is on track to earn half of its revenue from
outside the U.S. by 2013, a departure for a company that used to focus almost
exclusively on North America.
Its latest acquisition brought with it a relationship with Wuhan Iron & Steel
Co., Consolidated Thompson's largest shareholder and China's third-largest
steelmaker.
China's booming steel industry has supported prices for iron ore, a key steel
ingredient, despite sluggish economic growth in Europe and the U.S.
"We're happy to have Wuhan as the stable force" in Cliffs' Chinese customer
base, Carrabba said, which he said totals about 20 companies.
Carrabba said Cliffs would focus on growth at its existing operations rather
than further acquisitions, highlighted by a plan to triple production at the
Bloom Lake facility in Quebec during the next five years.
In addition to its North American iron-ore operations, Cliffs owns coal mines
in the U.S. and Australia and iron-ore interests in Brazil.
The company Wednesday reported second-quarter earnings of $407.7 million, or $
2.92 a share, up from $260.7 million, or $1.92 a share, a year earlier. The
results fell short of Wall Street expectations, however, as costs rose sharply.
Analysts polled by Thomson Reuters had expected a per-share profit of $3.71.
Executives said costs would continue to pose a challenge during the second
half of the year.
Shares of Cliffs were recently down 3.8%, at $90.02 in afternoon trading on
the New York Stock Exchange. The company's shares were up 20% in 2011 through
Wednesday's close.
-By Matt Day, Dow Jones Newswires; 212-416-4986; matt.day@dowjones.com
(END) Dow Jones Newswires
07-28-11 1531ET
Copyright (c) 2011 Dow Jones & Company, Inc.
