Cliffs Natural Resources Inc (NYSE:CLF)’s Chromite project stalled, Vale SA (NYSE:VALE)
Cliffs Natural Resources Inc. (NYSE: CLF) announced that Cliffs Chromite Ontario Inc, its affiliate, will be temporarily suspending environmental assessment activities for the company’s Chromite Project located in Ontario, Canada. CLF’s decision to suspend these activities temporarily has been attributed to delays related to land surface rights, the environment assessment process as well as various negotiations with the Ontario province.
The Company is organized via a global commercial group. This group is responsible for the sales and delivery of its products. The global operations group is responsible for production of the minerals that are marketed by the Company.
Another mining company has been in the news lately. Vale SA (NYSE:VALE), though in a different part of the world. Close two years ago, Brazil declared that by 2020, it intends to wean itself from fertilizer imports. The country acknowledged its inability to be able to meet the domestic demand for potassium, but said that its objective was to become self-sustaining in phosphates and nitrogen and that it wanted to significantly reduce its dependency on foreign Potash Corp/Saskatchewan. Taking into consideration that the country is one of the largest potash consumers in the world, importing 90 percent of its requirements might prove to be a massive blow to international producers
Over the past 30 years, Brazil has successfully transformed itself into a bread-basket, and has been feeding the world since. It has been able to achieve this feat by increasing its farm inputs dramatically. The government now wants to seal off that loop. It has been pressurizing the industry to triple its spending on its domestic fertilizer capacity over a period of five years.
Vale to the rescue
Why exactly would any country want to grow less reliant on imports? Apart from the regular national security arguments, competitiveness comes into the picture. It can be very time consuming and expensive to transport nutrients from ports to inland farms. This is exactly why Brazilian farmers have been losing out to countries such as the United States. In order to address this issue, the Brazilian government has wheedled miner Vale SA (NYSE:VALE) in which it has a majority share, to invest in phosphates and potash. Now, VALE’s investment plan calls for $8.8B in spending on fertilizers over a period of five years.