Thomson Reuters






NEW YORK, June 19 (Reuters) - Cliffs Natural Resources Inc
does not expect a flood of new supply in the Great Lakes
iron ore pellet market over the next few years, the company's
chief executive said on Wednesday, playing down concerns
expressed by some analysts.


Credit Suisse and Morgan Stanley both warned earlier this
year that a looming pellet surplus in the Great Lakes region
could hit Cliffs' earnings, sending the miner's shares down
sharply.


But Cliffs' CEO Joseph Carrabba told Reuters on Wednesday
that the extension of its supply contract with Essar Steel
Algoma announced last week suggests that Essar's greenfield iron
ore project in Minnesota could be delayed.


"We see a real tightening," said Carrabba, of the isolated
Great Lakes market. "Clearly, Essar's project is not coming in
the time frame they said."


The first phase of the Essar project is set to start up in
the second quarter of next year, and ramp up to full capacity by
the end of the year, according to the company's website.


A spokeswoman for Essar Steel Algoma, a subsidiary of
India's Essar Group, was not immediately available for comment.
In the release that announced the contract extension, the
company said Cliffs' iron ore would supplement material from the
Minnesota project.


Both AK Steel and US Steel are working on
smaller iron ore projects in the region.


Shares of Cliffs closed down 0.75 percent at $18.45 in New
York on Wednesday.