NEW YORK, July 13 (Reuters) - Shares of Cliffs Natural Resources Inc (CLF) rose 2 percent on Wednesday after the iron ore and coal miner said it was doubling its quarterly cash dividend.

In early trading on the New York Stock Exchange, Cliffs was $1.87, or 2 percent, higher at $96.63.

Late on Tuesday, the company said its board approved a 100 percent increase to its quarterly cash dividend to 28 cents per share.

"Despite the substantial increase in the size of the cash payout, we believe that the company will have ample cash to pay down debt, further increase the dividend, or pursue acquisitions," analyst Anthony Young of Dahlman Rose & Co said in a research note.

Young said he would not be surprised to see Cliffs pursue acquisitions as soon as 2012. "We anticipate that the company will generate $2.0 billion in free cash flow in 2012 and possibly more in 2013," he wrote.

Dahlman Rose reiterated its "buy" rating on Cliffs shares with a $120 price target. (Reporting by Steve James, editing by Gerald E. McCormick)