In late 2011, when iron ore prices were peaking, Cliffs acquired Bloom Lake. The company, which now has a market valuation of about $2.2 billion, paid $4.9 billion for the Canadian asset, or over double the present value of the entire company.

Casablanca Capital's Lourence Goncalves, now Cliff's chairman and CEO, has a unique opportunity to refocus on Cliffs' most profitable business segment and lead the company on a "new strategic path" of real diversification by selling Bloom Lake and entering into a joint venture with KWG Resources to develop it's Canadian Chromite project. Cliff's former CEO, Joseph Carrabba blessed the purchase of Consolidated Thompson Iron Mines in 2011. Even without hindsight, it is very doubtful that Goncalves would have done the same. Will Casablanca Capital focus on short-term activities to push Cliffs shares higher and exit its position in the company, or endorse a longer term plan with their shareholders in mind?

Given Cliffs' size, it is possible that a large competitor would be interested in acquiring some or all of the company's assets. ArcelorMittal (MT) is about ten times the size of Cliffs, Rio Tinto (RIO) is about 30 times the size and BHP Billiton (BHP) is over fifty times larger. Such peers could easily afford acquiring the Asian assets or the Canadian assets, and even the whole company. Teck Resources Ltd. has been eager to get into iron ore for many years, but has not found a good entry point. The question remains, will Cliff's be able to sell Bloom Lake and it's met coal operations at reasonable prices? Teck might be more interested in Cliffs’ Australian assets, which are closer to China. Casablanca is very eager to sell the Australian operations but they only have about seven years of life left.

Noront Resources Ltd. wants to buy Cliffs Chromite project, “If we don’t get a call from the new [Cliffs] management, we’ll be phoning them,” chief executive Alan Coutts said. He cautioned that Noront would not pay anything close to $500 million, which is roughly what Cliffs has spent in the area. But at the right price, he thinks Noront could buy the assets with the support of its key backers (Resource Capital Funds and China's Baosteel Group).

If Casablanca somehow manages to sell Bloom Lake, or the met coal operations or the Australian assets, at reasonable prices, there is a case for Cliffs to keep it's undeveloped $500M investment in the Canadian Ring of Fire Chromite project rather than going through with a fire sale.

Last month's Ontario Divisional Court set aside a decision reached by the Ontario Mining and Lands Commissioner last September that denied Cliffs an easement for a road to reach its Black Thor chromite deposit atop the mining claims of a rival company, KWG Resources. However, this is only one battle in a major war to keep Ontario's chromite in Canadian hands and maximize a sustainable price for downstream chromite and stainless steel products produced in Sudbury and throughout Ontario.

The logical next step would be for KWG to appeal the Ontario Divisional Court decision. Should KWG win that appeal, expect Cliffs to appeal again. Even if KWG does not initiate an appeal, which would be unwise for many reasons, the Division Court explained that at the next stage, KWG could oppose Cliffs easement application or ask for conditions that would protect its legitimate interests in its mining claims.

KWG's proposed natural gas based chromite reducer to produce enriched iron chromium pellets, along with the ONTC proposed James Bay Port Authority for rail infrastructure could deliver a highly world competitive chromite product price.

Under Casablancas direction, Cliffs could find themselves in a win-win situation by embrasing KWG as a junior partner as originally intended, only giving up a small percentage of the total chromite project revenue.

• The ferrochrome market is a direct fit in Cliffs diversification model
• The $3.3B chromite mine, concentrator, north south ore transport infrastructure all-weather road and Capreol ferrochrome smelter would be vastly 'slimmed down' and Cliffs capital investment limited to part of the mine and ore crushers only
• Cliffs and KWG would form a joint venture and sit down together at Ontario's Development Corporation table to promote a version of the transportation authority model that is empowered to issue bonds and otherwise raise project financing on capital markets at no cost to taxpayers for the transport infrastructure with east west road support to mines and communities and ONTC railway extentions
• With infrastructure guaranteed by government, PPP, technological grants and outside investors would step in to finance the remaining part of the mine, pipeline and chromite reducer
  
• Ontario's condition of a mineral lease that further processing of what is mined must be completed in Canada would be met with the 'New Production Method', processing chromite ore into the metalized iron and chrome used in stainless steel making, by using natural gas rather than electricity in Ontario
• The new chromite project would propose chromite fines coming from Big Daddy, Black Thor and Black Horse via a $600M slurry pipe north south to Nakina. From there, reduced iron chromium pellets would venture on towards Thunder Bay via the revitalized ONTC to new gas fired stainless steel mills within Ontario and a small proportion to conventional world ferrochrome and stainless steel mill markets

Casablanca, it's your move because you can expect the Black Horse will move to check the minister, his queen and their attorney general's divisional court rook.