Cleveland-Cliffs Inc. (NYSE: CLF) (“Cliffs”) today
announced that it will be resuming construction of its
Hot-Briquetted Iron (HBI) plant in Toledo, Ohio, and accelerating
the restart of its Tilden mining operations in Michigan.
The construction of the Toledo HBI plant was temporarily shut
down on March 20, 2020, and the Company has now begun the process
of remobilizing the workforce to complete the project. Due to
mandatory social distancing and other newly implemented safety
related measures limiting the number of workers allowed to be
present simultaneously on the job, construction is now expected to
be completed in the fourth quarter of this year.
The Tilden mine primarily supplies the Company’s own AK Steel
facilities in Middletown, Ohio and Dearborn, Michigan. The mine was
idled in mid-April, with a restart previously expected in July. The
company now plans to restart Tilden later this month. The earlier
restart of Tilden comes in response to a faster improvement in
steel demand from AK Steel’s clients than initially anticipated,
particularly in the automotive sector.
Cliffs’ Chairman, President,
and Chief Executive Officer Lourenco Goncalves said, “The demand
for our steel, iron ore, and metallics products has recovered
dramatically over the past month, and in light of this, we are
restarting Toledo and Tilden sooner than we originally expected. We
suspended these operations in a way that allowed us to restart as
easily and efficiently as possible, and that is what we will do.
Our footprint is well situated to capitalize on the rapidly
increasing demand from the automotive sector, which is occurring
faster than our most aggressive expectations.”
The Company has also already restarted numerous other previously
idled facilities across the footprint, including Precision
Partners, AK Tube, Mansfield Works, and the Dearborn downstream
facilities, including the PLTCM and the galvanizing line.
About Cleveland-Cliffs
Founded in 1847,
Cleveland-Cliffs is among the largest vertically integrated
producers of differentiated iron ore and steel in North America.
With an emphasis on non-commoditized products, Cliffs is uniquely
positioned to supply both customized iron ore pellets and
sophisticated steel solutions to a quality-focused customer base,
with an industry-leading market share in the automotive industry. A
commitment to environmental sustainability is core to our business
operations and extends to how we partner with stakeholders across
our communities and the steel value chain.
Forward-looking Statements
This release contains statements that constitute
"forward-looking statements" within the meaning of the federal
securities laws. As a general matter, forward-looking statements
relate to anticipated trends and expectations rather than
historical matters. Forward-looking statements are subject to
uncertainties and factors relating to our operations and business
environment that are difficult to predict and may be beyond our
control. Such uncertainties and factors may cause actual results to
differ materially from those expressed or implied by the
forward-looking statements. These statements speak only as of the
date of this release, and we undertake no ongoing obligation, other
than that imposed by law, to update these statements. Uncertainties
and risk factors that could affect our future performance and cause
results to differ from the forward-looking statements in this
release include, but are not limited to: severe financial hardship,
bankruptcy, temporary or permanent shutdowns or operational
challenges, due to the ongoing COVID-19 pandemic or otherwise, of
one or more of our major customers, including customers in the
automotive market, key suppliers or contractors, which, among other
adverse effects, could lead to reduced demand for our products,
increased difficulty collecting receivables, and customers and/or
suppliers asserting force majeure or other reasons for not
performing their contractual obligations to us; uncertainty and
weaknesses in global economic conditions, including downward
pressure on prices caused by the COVID-19 pandemic, oversupply of
imported products, reduced market demand and risks related to U.S.
government actions with respect to Section 232, the USMCA and/or
other trade agreements, treaties or policies; uncertainties
associated with the highly competitive and highly cyclical steel
industry and reliance on the demand for steel from the automotive
industry; continued volatility of steel and iron ore prices and
other trends, which may impact the price-adjustment calculations
under certain of our sales contracts; our ability to successfully
diversify our product mix and add new customers for our Mining and
Pelletizing segment beyond our traditional blast furnace clientele;
our ability to cost-effectively achieve planned production rates or
levels, including at our HBI production plant once we restart
construction activities, and to resume full operations at certain
facilities that are temporarily idled due to the COVID-19 pandemic;
our ability to successfully identify and consummate any strategic
investments or development projects, including our HBI production
plant; the impact of our steelmaking customers reducing their steel
production due to the COVID-19 pandemic, or increased market share
of steel produced using methods other than those used by our
customers, or increased market share of lighter-weight steel
alternatives, including aluminum; our ability to maintain adequate
liquidity, our level of indebtedness and the availability of
capital could limit cash flow available to fund working capital,
planned capital expenditures, acquisitions, and other general
corporate purposes or ongoing needs of our business; our actual
economic iron ore reserves or reductions in current mineral
estimates, including whether any mineralized material qualifies as
a reserve; the outcome of any contractual disputes with our
customers, joint venture partners or significant energy, material
or service providers or any other litigation or arbitration;
problems or uncertainties with sales volume or mix, productivity,
transportation, environmental liabilities, employee-benefit costs
and other risks of the steel and mining industries; impacts of
existing and increasing governmental regulation and related costs
and liabilities, including failure to receive or maintain required
operating and environmental permits, approvals, modifications or
other authorization of, or from, any governmental or regulatory
entity and costs related to implementing improvements to ensure
compliance with regulatory changes; our ability to maintain
appropriate relations with unions and employees; the ability of our
customers, joint venture partners and third-party service providers
to meet their obligations to us on a timely basis or at all; events
or circumstances that could impair or adversely impact the
viability of a production plant or mine and the carrying value of
associated assets, as well as any resulting impairment charges;
uncertainties associated with natural disasters, weather
conditions, unanticipated geological conditions, supply or price of
energy, equipment failures, infectious disease outbreaks and other
unexpected events; adverse changes in interest rates, foreign
currency rates and tax laws; the potential existence of significant
deficiencies or material weakness in our internal control over
financial reporting; our ability to realize the anticipated
benefits of the merger and to successfully integrate the businesses
of AK Steel into our existing businesses, including uncertainties
associated with maintaining relationships with customers, vendors
and employees, as well as realizing the estimated future synergies;
additional debt we assumed or issued in connection with the merger,
as well as additional debt we incurred in connection with enhancing
our liquidity during the COVID-19 pandemic, may negatively impact
our credit profile and limit our financial flexibility; changes in
the cost of raw materials and supplies; supply chain disruptions or
poor quality of raw materials or supplies, including scrap, coal,
coke and alloys; disruptions in, or failures of, our information
technology systems, including those related to cybersecurity; and
unanticipated costs associated with healthcare, pension and OPEB
obligations.
For additional factors affecting the business of Cliffs, refer
to Part II – Item 1A. Risk Factors of our Annual Report on Form
10-K for the year ended December 31, 2019 and our Quarterly Report
on Form 10-Q for the quarterly period ended March 31, 2020. You are
urged to carefully consider these risk factors.
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version on businesswire.com: https://www.businesswire.com/news/home/20200609005244/en/
Investors: Paul Finan Director, Investor Relations (216)
694-6544
Media: Patricia Persico Director, Corporate Communications (216)
650-0168
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