Boston, MA 10/18/2013 (wallstreetpr) – Cliffs Natural Resources Inc (NYSE:CLF) is likely to reports its 3Q13 earnings on October 24, 2013. CLF is facing irregular issue in its Chromite mining and smeltering project in Ontario. The mining and smelting project is at an advanced stage in all the defined deposits. Chromite, is a key input for the manufacturing of stainless steel materials and helps company to diversify its product basket. The current product basket includes iron ore and coal. It has got deposits (assets) in Canada and the United States.
The Chrome deposit is placed in the remote reaches of Canada. The $3.3 billion project is facing issues in terms of infrastructure and logistics facility which is forcing CLF to derail the exploration process in all the defined deposits which company has. The deposit in Canada has no connecting roads and the nearest city is of Thunder Bay.
In order to explore the resources, management has proposed the construction of road and for doing same; it has entered into conditional agreement for financial assistance with the Ontario government. The proposed, connecting roads would need to pass through the KWG resources. It is to be believed, that KWG resources, refused the permission or proposal for the road projects, as it would hamper KWG’s mining projects. On the other hand, KWG is also planning to construct road or railway facility for the transportation of its product basket.
It is presumed that railroads are expensive to construct and develop, but they are fairly economical in the longer term period. It is proved that transporting materials via road is costly as compared to rail. The cost of transportation of ore cost 83% more if routed through road as compared to the rail network. CLF has stopped all further work on the chrome ore deposits till the time issues pertaining to infrastructure facility is not resolved.
