Supplying the World’s Steel Makers

Cliffs Natural Resources

The team has remained at the forefront of technology and innovation over the decades, from the first application of electric power in Michigan’s mines to the current use of leading edge GPS and computer systems. Today, the company is a member of the S&P 500 Index and a leading producer of iron ore globally, as well as a significant producer of high- and low-volatile metallurgical coal.

The team operates coal and iron ore mines in North America and an iron ore mining complex in Australia. Cliffs is also in the process of launching a large chromite project in Canada. In addition, the company boasts a research and development facility in Michigan to provide geological interpretation, process mineralogy, mine engineering, mineral processing, and many other modes of support to its global operations.

This R&D division is also utilized by Cliffs customers for simulating blast furnace conditions and for laboratory testing. To successfully carry out such a large scale operation, Cliffs is organized into two groups: a global operations group that oversees the production of the minerals that the company markets and a global commercial group that takes care of sales and delivery of the company’s products.

Mining Operations

Cliffs’ North American operations produce iron ore concentrates and 13 grades of iron ore pellets, including high manganese, standard, and fluxed. Cliffs’ customers use these products in their blast furnaces as a part of the steelmaking process. The team also supplies Asia-Pacific steelmakers with lump iron ore and high quality, fine ore powders.

Cliffs is known for its innovative and advanced approach to iron ore mining, as well as its effective joint-venture management. The company pushes continuous improvement within its iron ore operations and stays open to new ideas and technology that might improve efficiency or the quality of its steel-making products. The team develops geologic models for all Cliffs mines in order to accurately identify the major ore and waste rock types. Computerized block models can also be used to create tonnage and grade estimates, as well as comprehensive mine design and life of mine operating schedules. Periodic drilling programs monitor and guide current iron ore mining operations, and additional pit development is also underway.

The company also mines some of America’s largest and highest quality metallurgical reserves. This high- and low-volatile metallurgical coal is used by the steel, foundry coke, and merchant coke industries. The coal is an important blast furnace injection product in the steelmaking process and helps reduce the amount of coke needed for the production of pig iron. Cliffs also mines thermal coal for use in energy production.

Cliffs directly owns and operates all three of its lucrative North American coal mining complexes. Operations across these mines produced a total of 6.4 million short tons of coal last year, 5 million short tons in 2011, and 3.2 million short tons in 2010. After being mined, these millions of tons are shipped throughout the United States by barge or by train. Coal destined for the global market is shipped out of ports in Louisiana, Alabama, and Virginia.

The business is also in the process of launching a new operation in Northern Ontario, where it recently acquired the largest known chromite deposits on the continent. The team plans to mine the ferrochrome found there and sell it to steelmakers around the globe. The move could have a particular impact on North American steelmakers, because the majority of ferrochrome deposits and production is currently located in the Eastern Hemisphere. Ferrochrome is a critical ingredient in stainless steel, and Cliffs’ new Northern Ontario operation could dramatically reduce Western steelmakers’ reliance on Eastern imports.

Global Expansion

Cliffs’ operations have traditionally been based in North America. In recent times, however, the company has begun to shift its focus toward a more global vision. With a rapidly increasing demand for steelmaking raw materials from the overseas market, the move is sure to be a lucrative one. “The economies of the West are mature and now occupy a larger role in servicing the industrialization of developing nations such as China, India and Brazil,” Cliffs Chairman, President and CEO Joseph A. Carrabba explains in a company website statement. “For more than 160 years, Cliffs Natural Resources capitalized on the build-out of the world’s Western nations, playing a vital role in the American Industrial Revolution. Today, through a number of strategic transactions executed since 2005, we are positioned to capitalize on advancing development around the world.”

The team sees several specific “megatrends” within the commodity industry on which it is intent on capitalizing. First, continued globalization, especially in major emerging economies like China, India, and Brazil, will lead to increased demand. Second, a move toward urbanization within these rising economies will require more housing and infrastructure, increasing the steel intensity rates. Third, an increase in disposable income within these economies will increase construction related to personal services and leisure activities.

Cliffs Natural Resources is carefully positioning the company to successfully meet this anticipated increase in global demand. The team has recently shifted its sales and marketing management structures from a regional approach to an international one. Cliffs’ Global Exploration Group (GEG) is forming partnerships with mining and exploration companies in order to secure resources through both cooperative exploration and direct investment. These new relationships are providing a number of potential opportunities, namely in Australia, New Zealand, Mongolia, and the Americas.

A larger geographical footprint will also require more advanced logistical capabilities, especially since many newly developed mining districts are located further inland – and farther away from established networks – than in the past. As a result, heavy investment in complex-infrastructure-logistics networks will be essential. “We believe the infrastructure component within the mining industry will be the key to unlocking future value for our stakeholders,” the company website reports.

Responsibility

Cliffs’ forward thinking global agenda has led to tremendous growth over the past few years. However, this increased global footprint will require an even greater commitment to corporate responsibility. “Our expansion brings new challenges and new opportunities, including an expectation of uncompromising integrity in our business dealings and conduct toward one another,” the company website insists. “Our commitment to operating in accordance with the highest ethical standards dates back to the founding of the company and has earned Cliffs a reputation for fairness, trust and honesty across the globe.”

Cliffs has a number of programs that the team likes to describe as “words in action.” In other words, the company actually has initiatives to back up its claims of corporate responsibility. Partnering with local communities is a prominent theme in many these programs. For example, Cliffs’ United Taconite operations in Minnesota have developed a unique arrangement between the municipal waste plant, a local farmer, and the community at large. The Western Lake Superior Sanitary District (WLSSD) located nearby needed to safely dispose of its biosolids. Traditionally, this waste would be sent to landfills, but Cliffs stepped in to provide a more environmentally friendly, cost saving, and mutually beneficial alternative. The company uses the biosolids as fertilizer on its tailings basin land and allows a local dairy farmer to grow alfalfa there to feed his cattle. In return, the farmer provides Cliffs with the mulch that the company needs to keep its dust under control and away from the nearby community. This creative partnership saves Cliffs between $30,000 and $50,000 each year.

In another noteworthy example, Cliffs is actively involved in promoting opportunities for indigenous people in Australia. The company has voluntarily partnered with the Western Australia Department of Environment and Conservation (DEC) to create a three year training program – and to improve management of the natural environment around Cliffs’ mining and exploration operations. Cliffs provides both the funding and on-the-job experience that indigenous Australians need to launch a career in conservation and land management, as well as employment opportunities after graduation. The company has also made a commitment to the Australian Employment Covenant (AEC) to provide indigenous people with job-specific training and guaranteed employment beyond that which is offered through the DEC partnership. Cliffs also employs a senior indigenous person to act as an indigenous liaison officer. The officer mentors indigenous trainees and employees and works closely with nearby indigenous communities to resolve any issues surrounding Cliffs’ activities.

Environmental Stewardship is also an important part of the Cliffs mission. “Cliffs recognizes that extraction and processing of the earth’s mineral resources must be accomplished in a responsible manner that minimizes impacts on the environment and the community,” the company website explains. “The company believes that stewardship with proper concern for the environment is an essential element of a successful business strategy and subscribes to the tenets of sustainable development.” This commitment extends to all of the company’s operations around the world and is accomplished with the support of a dedicated team of environmental managers.

Community partnerships and sustainable business practices are core to Cliffs’ operations. In fact, the team believes that these efforts are “earning and maintaining our social license to operate.” And, as Cliffs continues to grow and diversify, an unwavering commitment to the environment and the community will be more important than ever. “The Company’s continued success will depend on our ability to adhere to these sustainable practices throughout our business.”

November 19, 2017, 3:29 AM EST