Cliffs Natural Resources (NYSE:CLF) announced that underground mining operations at its Oak Grove mine in Alabama, have now resumed after being stopped abruptly 2 weeks ago - after the mine was hit by severe weather, including a tornado storm on April 28th.  The iron ore giant competes with other international mining and natural resources companies like Vale (NYSE:VALE), BHP Billiton (NYSE:BBL) and Rio Tinto (NYSE:RIO).
The mine, which contributes between 0.9 million tons and 1.4 million tons of metallurgical coal to the company’s North American coal business segment, saw significant damage to its preparation plant and overland conveyor system. With the extent of damage to the aboveground systems yet to be understood by Cliffs, the raw coal, which is mined, will be stockpiled at the mine-site.
We tried to explain the overall contribution of the mine’s operations, and how any disruption can affect Cliffs’ total value in our article titled, "Can Cliffs’ North American Coal Operations Weather the Storm?" As the amount of coal that can be produced and sold from this mine over the rest of the year is uncertain, the company has decided to delay announcing the outlook for its North American coal business segment.
We currently have a $102 price estimate for Cliffs Natural Resources stock, implying a premium to market price.
- Cliffs Announces Underground Mining Resumes at Oak Grove Mine Following Severe Weather in Alabama, Cliffs Press Releases, May 9 2011
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