Thomson Reuters






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Oct 27 (Reuters) - Cliffs Natural Resources Inc
reported a third-quarter loss, hurt by a $5.7 billion writedown
of its coal and iron ore assets amidst declining prices.


The non-cash impairment charge of $5.7 billion includes $4.5
billion related to the assets at its Bloom Lake iron ore mine in
Quebec.


"Despite continued cost-cutting progress at Bloom Lake,
Phase I is not feasible. By the end of this year, we will have a
solution for Bloom Lake," Chief Executive Lourenco Goncalves
said in a statement.


Cliffs said earlier this month it would write down the value
of its coal and iron ore assets due to weak prices, putting it
in breach of debt covenants.


Coal prices have halved over the past three years, while
iron ore prices have dropped about 40 percent this year alone
due to excess supplies and sluggish steel demand from China.


The company, whose customers include ArcelorMittal SA
, said on Monday it expects 2014 capital expenditure to be
at the low end of its previous forecast of $275- $325 million.


Cliffs, which supplies steelmakers around the world,
maintained its 2014 forecast for U.S. and Asia-Pacific iron ore
production and sales.


The company produces various grades of iron ore pellets,
which are used in blast furnaces in steel making.


Cliffs said it would not be providing 2015 sales guidance
for Bloom Lake as a "definitive decision on the future of this
mine has not been made".


The company acquired Bloom Lake as part of its takeover of
Consolidated Thompson Iron Mines Ltd in 2010 but
higher-than-expected costs at the mine have weighed on Cliffs'
earnings.


The company's total revenue in the third quarter fell 16
percent to $1.30 billion, hurt by a 32 percent reduction in
market pricing for iron ore and a 17 percent drop in pricing for
metallurgical coal.


New York-based hedge fund Casablanca Capital, which owns 5.2
percent of Cliffs, won a proxy battle with the company in
August. Subsequently, Goncalves was made the CEO of Cliffs.


Net loss attributable to Cliffs shareholders was $5.88
billion, or $38.49 per share, in the third quarter ended Sept.
30, compared with a profit of $117.2 million, or 66 cents per
share, a year earlier.


According to Thomson Reuters I/B/E/S, the company's adjusted
loss was 23 cents, much bigger than the average analyst estimate
of a loss of 4 cents.


The miner's shares, which closed at $9.24 on Monday, have
fallen 64 percent this year.


As of Oct. 15, more than 44 percent of Cliffs' outstanding
shares have been sold short by investors, according to Thomson
Reuters data.

(Reporting By Tanvi Mehta in Bangalore; Editing by Maju Samuel)