Cleveland, Ohio-based Cliffs Natural Resources Inc. has announced that it is further reducing its expected 2014 capital spending range by approximately 25 percent, or $100 million, to $275-325 million.
Cliffs indicated that the lower full-year capital spending range is a sustainable level to support the company's full-year production volume and cash cost expectations as well as safety and environmental obligations. The capital spending reduction is driven by the recent volatility in seaborne iron ore and metallurgical coal pricing. The company's long-term US iron ore supply contracts, Cliffs' largest and most profitable business segment, will significantly mitigate the impact of lower seaborne iron ore prices on consolidated revenues.
As SteelOrbis previously reported, in February this year Cliffs had already announced more than a 50 percent reduction in 2014 capital spending, lowering its capital spending range to $375-425 million, compared to its 2013 capital spending of $862 million.