Cliffs the newest victim of iron ore price slump: to take $6bn charge

Cliffs is in talks with steel makers about selling a stake in its Bloom Lake mine in Canada, among other assets.

Cliffs Natural Resources Inc. (NYSE:CLF), the largest iron ore producer in the U.S., said Friday it expects to take a $6-billion charge to write down the value of some assets in the third quarter due to weak prices for its two key commodities: iron ore and coal.

The Cleveland-based mining and natural resources company, cut to junk by Standard & Poor's last week, said the impairment is tied to expected lower long-term pricing and the difficult market for seaborne iron ore and metallurgical coal compared with its more stable U.S. iron ore business.

After attempting a comeback since ending September at a more than 5-year low of $77.50 a tonne, the steel-making commodity sank again yesterday amid Australian and Brazilian miners announcing they will continue to rise output even as top consumer China imports less.

So far this year iron-ore prices have fallen by more than 40%. Prices for metallurgical coal, another steelmaking ingredient,