• CLF6.42+5.07%

Cliffs Natural Resources Inc. Watchlist

6.42+0.31(+5.07%)

NYSEFri, Jan 30, 2015 4:03 PM EST

Cliffs Natural Resources Inc (NYSE: CLF) has fallen 30 percent this week as news that its Bloom Lake Mine is going through restructuring, along with the decline in iron ore prices, has lowered expectations on the company's profitability. More than 43 percent of the company's shares are being shorted and the steep weekly decline shows the risks of investing in a heavily shorted stock.

In a statement, Cliffs Natural Resources said that the company will restructure its Canadian Bloom Lake iron ore mine, saying the business has stopped generating revenue and can no longer meet its financial obligations. A bankruptcy filing for Bloom Lake may limit the cost of closing the operation, which Cliffs natural resources estimated in November would be as much as $700 million.

Lourenco Goncalves, Chairman, President and Chief Executive Officer of Cliffs Natural Resources said, "For several months, we have been seeking equity investors and exploring sale options for Bloom Lake including working collaboratively with Investissement Québec. We support the decision by the directors of the Bloom Lake Group to conduct a restructuring process under the supervision of the Court."

Further driving down the stock is the decline in the value of iron ore. Prices of the steelmaking ingredient closed at $62.70 per ton on Wednesday, its lowest price in six years.

Cliffs Natural Resources closed Thursday at $6.11, down 7.70 percent.

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