Cleveland, Ohio-based mining company Cliffs Natural Resources Inc. announced Wednesday that net income in Q2 2012 was $258 million, down from $409 million in Q2 2011. A decline in sales margins had the largest impact on earnings as consolidated revenues fell 10 percent to $1.6 billion due to lower year-over-year pricing.
Joseph A. Carrabba, Cliffs' chairman, president and chief executive officer, said, "While the current pricing environment is softer year over year, the underlying fundamentals supporting Cliffs' long-term strategy remain intact. We will continue to execute our expansion plans at Bloom Lake Mine. Cliffs has the potential to build an iron ore business in Eastern Canada rivaling our legacy US Iron Ore operations in size and scope. This business will also have full access to the seaborne market and developing economies around the world."
Q2 US iron ore pellet sales volume was 5.4 million tons, compared with 5.8 million tons sold in Q2 of 2011. The decrease was attributed to the timing of vessel shipments. Meanwhile, revenues per ton slipped 13 percent to $119.51. On the other hand, Q2 Eastern Canadian iron ore sales volume registered a 41 percent increase to 2.4 million tons.
Cliffs' North American coal sales volume in Q2 2012 was 1.5 million tons, a 21 percent increase from the 1.3 million tons sold in the prior year's comparable quarter. The increase was primarily driven by significantly higher year-over-year sales volume from Cliffs' low-volatile metallurgical coal mines, which achieved meaningfully higher year-over-year production volumes.