(Adds details on cuts, context)
May 27 Cliffs Natural Resources Inc,
which is fighting an activist investor who wants to split up the
company and replace its chief executive, said on Tuesday it will
cut 2014 capital spending by $100 million, or 25 percent, as it
deals with weak seaborne iron ore and metallurgical coal prices.
The U.S.-based iron ore and coal producer said capital
expenditures this year will now be between $275 million and $325
million as it focuses on financial discipline at a time of
Cliffs said it expects seaborne iron ore and metallurgical
coal prices to remain weak in the near term, which will reduce
revenue in most of the company's business segments.
"The long-term supply contracts in U.S. iron ore, Cliffs'
largest and most profitable business segment, will significantly
mitigate the impact of lower seaborne iron ore prices on
consolidated revenues," the company said in a statement.
About 75 percent of the spending cut will be in Cliffs'
Eastern Canadian iron ore and North American coal operations.
Even before Tuesday's announcement, Cliffs had said its
capital spending in 2014 would be 55 percent lower than it was
New York hedge fund Casablanca Capital wants Cliffs to spin
off its assets outside the United States, arguing that they
weigh on the company's profitable Great Lakes business.
Casablanca also wants Lourenco Goncalves, the former chief
executive of Metals USA, to replace Gary Halverson as Cliffs
CEO. Halverson, a former Barrick executive, was appointed CEO in
(Reporting by Nicole Mordant in Vancouver, editing by Meredith
Mazzilli and Peter Galloway)