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Cliffs' iron ore shipments dip in first quarter

Cleveland-Cliffs Inc. on Wednesday reported first-quarter iron ore shipments were down compared to 2006. However, company officials expect steel and iron ore demand to remain strong this year. In the first quarter this year, the Cleveland-based i...

Cleveland-Cliffs Inc. on Wednesday reported first-quarter iron ore shipments were down compared to 2006.

However, company officials expect steel and iron ore demand to remain strong this year.

In the first quarter this year, the Cleveland-based iron ore supplier shipped 2.6 million tons of iron ore from its North American mines, compared to 2.9 million tons during the same period last year.

Iron ore pellet production at Hibbing Taconite slipped from 2 million tons in the first quarter of 2006 to1.2 million tons in 2007 because its water supply froze, which forced the plant to shut down from mid-February to mid-March.

Production at the Tilden Mine in Upper Michigan declined to 1.4 million tons from 1.7 million tons due to unscheduled equipment repairs.

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United Taconite production was up about 200,000 tons, to 1.2 million tons, compared to 2006, and Northshore Mining Co. produced 1.3 million tons, the same as in 2006.

Total pellet production at the six mines was 7.4 million tons, compared to 8 million tons in the first quarter of 2006.

Due to a financial accounting standards examination, the company still has not filed its 2006 annual report.Its complete 2007 first-quarter financial results were not made public Wednesday.

The time needed to complete the examination and file the company's 2006 annual report isn't known, said Joe Carrabba, Cleveland-Cliffs chief executive officer and president.

However, the company remains committed to financial transparency, he said.

Cliffs' six mines are projected to produce more than 35 million tons of iron ore pellets in 2007, with Cliffs' share of that at 22 million tons. Production at its Portman iron ore operation in Australia is expected to be 8.4 million tons.

A settlement in world pellet prices for 2007 is projected to increase Cliffs' average pellet sales by 63 cents a ton compared to 2006.

As of March 31, Cliffs had $118.8 million in cash and cash equivalents, compared to $351.7 million on Dec. 31, 2006.

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In March, Cliffs acquired 30 percent interest in a Brazilian ore operation for an initial investment of $133 million. In 2007, Cliffs plans to spend$240 million on the project.

The company also plans to invest $96 million this year for a 45 percent interest in an Australian coal project.

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