American mining company Cliffs Natural Resources is set to reduce its 2014 full year capital expenditure by 50% year-on-year to between $375m and $425m, by cutting down on project expansion at Bloom Lake mine in Québec.
The company's full year capital spending for 2013 was about $862m.
Cliff Natural Resources president and CEO Gary Halverson said that this planned reduction is an important step.
"Bloom Lake's ore body is well-suited for a global market that increasingly values quality and diversification of supply, but it also requires time and capital to be properly developed, built out, and operated to realise its full potential," Halverson said.
As per the full year 2013 results, Cliff Natural is expecting Bloom Lake mine's output to be 5.5Mt to 6.5Mt from the first phase this year, with the current commodity prices.
However, the company stated that it would call off the operations of phase one if pricing remained down for an extended period of time.
Besides suspending the phase two expansion, the company has also altered the project's tailings and water management strategy to further aid the spending reduction.
"Given the wide range of outlooks for iron ore prices, we reduced our 2014 capital expenditures at Bloom Lake mine as we evaluate the best alternatives for this asset as part of our overall focus on enhancing value for shareholders."
Meanwhile, Cliff Natural is planning to halt works at Wabush Scully mine in Newfoundland and Labrador by the end of the first quarter of this year, citing the reasons as high costs and economic viability.
As previously disclosed, Cliff Natural's idled Wabush mine's Pointe Noire pellet plant in June 2013.
Approximately 500 employees are said to be be impacted by the action at the Wabush Scully mine and the Pointe Noire rail and the port operation in Québec.
With the developments at Wabush mine, Cliff Natural Resources expects idle costs of about $100m this year, alongside impairment and write-off charges of $183m, which will be included in the fourthquarter 2013 results.