UPDATE 1-Cliffs to take $1 bln charge on Thompson Iron buy

Thu Jan 24, 2013 11:30am EST
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* To take non-cash charge in the year-ended Dec. 31

* Shares down 2 percent

By Krishna N Das and Swetha Gopinath

Jan 24 (Reuters) - Cliffs Natural Resources Inc said it would write down the value of Consolidated Thompson Iron Mines Ltd by $1 billion as it expects lower volumes and higher costs in the business bought for more than $4 billion two years ago.

Rival miners Rio Tinto Plc and Vale SA have recorded billion-dollar charges over the past two months on weak demand for commodities such as iron ore, coal and aluminum, and analysts expect BHP Billiton Plc and Anglo American Plc to follow.

"There's been a lot of consolidation in the past two years, commodity prices have moderated and global growth is lower than what people expected," said CRT Capital Group analyst Kuni Chen. "So, you're beginning to see people writing down their investments."

Cliffs, the largest North American producer of iron ore pellets used in making steel, said on Thursday the goodwill impairment charge will be recorded as a non-cash expense for the year ended Dec. 31, results for which will be announced on Feb. 13.

The company's net income for 2011 was $1.62 billion.

Cliffs's shares fell 2 percent to $36.40 in morning trade. The stock has shed 52.9 percent of its value since hitting a year-high of $78.85 in late January last year.   Continued...