The company’s North American coal sales volume was 2.1 million tons, a 36% increase from the 1.5Mt sold in the previous year’s comparable quarter.
The increase was driven by significantly higher sales volumes from Cliffs’ Oak Grove and Pinnacle mines.
During 2012’s second quarter sales volumes were unfavourably hit by Oak Grove’s preparation plant only coming into full operation after repairs needed due to the severe weather damage that occurred in 2011.
Consequently, time was needed to rebuild the inventory at export terminals.
Also, Pinnacle Mine’s sales and production volume improved year-on-year due to increased production and customer demand.
While production was up, second quarter revenues per ton were down 13% to 104.89.
The decrease was primarily driven by lower year-on-year market pricing for metallurgical coal products.
This was partially offset by favourably priced annual and carryover contracts and a product mix made up of higher quality metallurgical coal products.
Cliffs cut cash costs per ton by 20% to $88.12 from $110.72 in the year ago quarter.
The second quarter 2013 cash cost per ton benefited from improved fixed cost leverage from the increased sales volumes, lower maintenance spending and employment related expenses, and an overall focus on improving the operation’s cost structure.
Looking ahead, Cliffs believes its two largest end markets is expected to remain stable.
For the remainder of the year the company expects modest US economic growth, which will help support North American steelmaking utilization rates.
In China year-to-date average crude steel production is trending higher over the previous year, contributing to increased seaborne iron ore imports.
Coal, though, is only part of the Cliffs story.
Overall the company reported 2013 second quarter revenues of $1.5 billion and net income attributable to common shareholders of $133 million.
“During the quarter I’m pleased to say we paid down debt by $110 million and made meaningful progress in lowering our SG&A [selling, general and administrative] and exploration expenses,” Cliffs’ president and CEO Joseph Carrabba said.
