US-based miner Cliffs Natural Resources Inc. has announced that it is considering the closure of its Bloom Lake iron ore mine in Canada amid falling iron ore prices. On Tuesday, November 18, the iron ore price for 61.5 percent Fe content declined to a five-year low, standing at $71/mt CFR China.
Cliffs Natural Resources previously stated that the company needed an investment of $1.2 billion for a second-phase expansion which would make the Bloom Lake mine profitable. The company now estimates, in the event of a closure, costs to be in the range of $650 million to $700 million in the next five years.
Additionally, Cliffs' Canadian subsidiary recently lost an arbitration claim they filed against a former Bloom Lake customer relating to the August 2011 termination of an iron ore sales agreement. As a result, Cliffs will pay damages amounting to approximately $71 million.