North American Iron Ore Industry

Out of the tumult of recent years, Cleveland-Cliffs has emerged as the North American steel industry's leading iron ore supplier. In North America, three-quarters of the integrated steel mills are located around the south shores of the Great Lakes. This gives the major domestic iron ore producers in Minnesota, Michigan and Eastern Canada, a cost advantage over seaborne imports. In 1990, US steelmakers owned 85% of their iron ore supplies through outright or equity ownership. Today, the figure is on the order of 51%.

Cleveland-Cliffs has changed its corporate strategy from mine manager to mine owner. On December 1, 2003, it became the biggest iron ore owner in North America when it purchased 70% of the EVTAC mine in Minnesota. CCI now controls 26% of the North American iron ore supply followed by US Steel, the traditional leader, with 24%.

Core Report LLLL looks at the North American iron ore industry in light of Cliffs' expansion, the cost competitiveness of the individual mining properties and the delivered costs and prices for North American ore to all major US and Canadian steel mill markets. It examines the supply/demand parameters for the industry, presents a detailed cost breakdown for all North American iron ore properties (FOB-mine and delivered Lower Lakes), analyzes the iron ore pricing situation and determines the competitiveness of domestic versus foreign ore. Information on each mine includes its ownership arrangements, effective capacity, input costs and usage rates, labor productivity, transportation costs and commitments of mine partners. Historical operating rate data is presented as well as forecasts to the year 2005.

This study was prepared in conjunction with Dr. Peter J. Kakela of Michigan State University.

Core Report LLLL, is provided to WSD subscribers as part of their regular annual service. The price for non-subscribers is $2,000.