Cliffs Natural Resources boosted iron ore sales 15 percent during the second quarter, another sign that the company and the industry as a whole may be on the mend, officials said Thursday.
Cliffs — which runs United Taconite, Hibbing Taconite and Northshore Mining on Minnesota's Iron Range — reported ore sales of $569 million. Profits for the quarter that ended June 30 more than doubled to $77 million compared with the same period a year ago.
The uptick was welcome news for Cliffs, which struggled mightily with the global industry downturn of the last two-and-a-half years. The Ohio-based company exited several coal businesses and idled its Minnesota taconite plants for months in an effort to restructure amid a shifting landscape.
But beginning last year, Cliffs benefited from increases in global taconite prices and welcomed a host of new orders from steel producers. In August 2016 it reopened its United Taconite plant in Forbes, Minn., and that same month began building a new adjacent processing plant. That $75 million Mustang "superflux" iron-pellet plant opened in May.
"Our second quarter results clearly demonstrate the true power of our U.S. iron ore business, in which we have unrivaled operational, commercial, logistical and quality advantages," said CEO Lourenco Goncalves in a statement. "Even as iron ore prices in Asia dropped substantially during the second quarter, these unique advantages enabled us to achieve earnings before taxes and depreciation margins that are at the peak of the industry in the United States."
Goncalves said Cliffs will expand again, this time by building a new "HBI" iron-ore briquette plant in Toledo, Ohio. Minnesota and six other states had been possible contenders for the project.
Goncalves said the new plant in Ohio "will enable Cliffs to supply high-quality, customized HBI as feedstock to select electric arc furnace steelmakers. As electric arc furnaces become Cliffs' clients, we expect the earnings power of U.S. iron ore will carry over to this new business."
Iron ore that is processed into HBI briquettes is considered high value because the briquettes have a higher concentration of iron and can be processed in the more efficient electric arc furnaces.