* Goldman Sachs analyst cuts price target to $20 from $24

* Cites bleak outlook for steelmaking material

* Shares fall more than 47 percent so far this year

March 19 (Reuters) - Shares of Cliffs Natural Resources Inc fell 7 percent on Tuesday after Goldman Sachs cut its price target for the iron ore producer, citing a bleak outlook for the steelmaking material.

The global investment bank lowered its 2013 to 2015 price forecasts for iron ore by an average of 8 percent, prompting mining analyst Sal Tharani to lower his price target on shares of Cleveland-based Cliffs to $20 from $24.

Tharani also maintained his "sell" rating on the stock in a research note published on Tuesday.

Iron ore prices are expected to fall over the next three years as new supplies come into production and demand for the steelmaking material softens in China.

"In our view, Cliffs is not only suffering from weak iron ore fundamentals but also company specific issues - most prominent is its inability to control costs at its Bloom Lake mine," said Tharani, referring to an Eastern Canadian mine operated by the company.

Cliffs has delayed an expansion at the Quebec iron ore project, touted as a crucial growth driver, and costs at the mine have been higher than expected.

The miner also took at $1 billion impairment charge in the fourth quarter related to its C$4.07 billion ($3.96 billion)takeover of Consolidated Thompson Iron Mines Ltd, which gave it control of Bloom Lake.

Shares have fallen more than 49 percent so far this year.

"We believe that market sentiment on the stock will remain negative until there is clarity on how the Bloom Lake costs will be brought under control," said Tharani.

Goldman Sachs is calling for the iron ore market to enter a structural surplus in 2014 as slower growth in Chinese steel production coincides with increases in seaborne iron ore supply and domestic Chinese iron ore production.

The investment bank now forecasts an average iron ore price of $139 per tonne in 2013, down from an previous estimate of $144 per tonne. Goldman Sachs expects prices to slip to $115 per tonne in 2014 and then to $80 per tonne in 2015.

Shares of Cliffs, which also produces coal and ferroalloys, were down 6.9 percent at $20.27 on Tuesday afternoon on the New York Stock Exchange.