Iron ore miner Cliffs Natural Resources Inc. (NYSE: CLF) announced Thursday that it will reopen its United Taconite mine north of Duluth, Minnesota, in August, two months ahead of its previously announced October reopening. The company’s decision was attributed to a new contract with the Canadian division of United States Steel Corp. (NYSE: X) to supply iron ore pellets to the steelmaker for the second half of 2016.
On May 31, Cliffs announced that it had struck a 10-year deal with steelmaker ArcelorMittal (NYSE: MT) to supply the company’s U.S. steel works with iron ore pellets. Cliffs reportedly will supply a minimum of 7 million long tons annually to ArcelorMittal through the life of the deal.
Cliffs raised its 2016 iron ore pellet sales volume from 17.5 million long tons to 18 million and raised its production volume estimate from 16 million long tons to 16.5 million. A long ton is equal to 2,240 pounds.
Cliffs Chairman, CEO and President Lourenco Goncalves said:
The vast majority of the steel companies in North America are currently enjoying stronger order books, and their demand for high quality iron ore pellets from a reliable supplier is increasing. With that, Cliffs’ business continues to gain very positive momentum, with the improvement of the existing business with our long established clients and the addition of new ones.
United Taconite employs about 450 workers.
Analysts at Macquarie raised their rating on Cliffs from Neutral to Outperform Friday morning and nearly doubled their price target from $4.00 to $7.50.
Shares of Cliffs traded up about 4.3% in the late morning Friday, at $5.32 in a 52-week range of $1.20 to $5.83.