Cliffs CEO Positive at State of the Company Lunch

Baihly Warfield
April 07, 2017 09:17 AM

Cliffs Natural Resources CEO Lourenco Goncalves brought a positive outlook to Iron Range leaders at Thursday's State of the Company lunch at the Minnesota Discovery Center in Chisholm. 

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It's a milestone year for the company. They have been mining for 170 years now. And Goncalves said the most recent one, 2016, was good He said 2017 looks like it will be even better. 

"We are here to make money. We are here to take care of business. We are here to take care of the people that work in the business. We are here to support the businesses that surround our business. We are here to make it grow," Goncalves said. "That's the reason why we are here for 170 years."

He also gave an update on ongoing projects at Minnesota mines. The $70-million Operation Mustang at United Taconite is coming along. That will allow Cliffs to make custom pellets for its customer, Arcelor Mittal. 

"We broke ground; we started construction," Goncalves said. "We are now approaching commissioning, and very soon, we are going to be delivering mustang pellets to Arcelor Mittal."

That's one of the ways Goncalves said his company is on the forefront of the steel industry. He also touted success in reducing Cliffs' debt. As of February 2017, it was at $1.2 billion. Goncalves said it will be $700 million by December 2017. 

That's even lower than what Goncalves had been expecting. 

"We are in the strongest position among steel and mining companies in the U.S," Goncalves said. 

With the trend continuing toward Direct Reduced Iron pellets, Goncalves wants to build another facility that can produce those. He said he continues to hope it will be in Minnesota. 

"We are going to have HBI/DRI production. Trust me on that. Because we will," Goncalves said. "With a little more help from Minnesota, I would have already started here."

He said they are not in the state to do business, then send the money elsewhere. 

"I am a competitor. I'm not a guy that likes to accommodate," Goncalves said. "I do not cut deals that are not good for my company, for my people, for my employees, for my communities, for the places that I participate in."

His strategy going forward is to protect the core business and further expand the customer base. 

Goncalves said Cliffs' 170-year history speaks for itself, so he is focusing on the next 100 years. 

"I don't cut deals for tomorrow. I'm preparing the next generation of Cliffs employees," Goncalves said. 

On politics, Goncalves told the crowd he considers Canada and Mexico friends, so he supports NAFTA, although he does think it could use updating. However, he has opposed the Trans-Pacific Partnership from the beginning. 


Baihly Warfield

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