From the SMH:
The fifth biggest iron ore business in Australia is in limbo today, after an apparent boardroom coup saw a hedge fund take control of American company Cliffs Natural Resources this morning.
…Activist hedge fund Casablanca Capital has led that campaign, and claimed overnight that it had taken control of the Cliffs board at a meeting of the miners’ shareholders over night…Casablanca has long urged the Cleveland-based Cliffs to raise its dividend and sell foreign assets…
Cliffs mines about 11 million tonnes of iron ore per year across three deposits near Koolyanobbing in Western Australia…Cliffs recently reported the local assets as having production costs of about $US53 per tonne during the June quarter, which is more expensive than the $A49 to $A52 per tonne range that Atlas reported for the same quarter, and the $A34.03 per tonne production cost that Fortescue reported.
Here’s the UBS grade discounted break even chart:
Perhaps the prospect of some corporate action and/or mine closures is what has boosted other miners today. It will be fascinating to see if Casablanca can find a patsy or if the mines will be run in receivership.
