Shares in Cleveland-Cliffs have seen a significant surge of 20% after the company relayed its intention to enter the rare earths mining industry along with its Q3 earnings report. CEO Lourenco Goncalves highlighted the company's renewed focus on the potential of their mining assets to contribute to the rare earths industry. Following a thorough examination of their mining sites, the company believes that their locations in Minnesota and Michigan hold the most potential.
If the company successfully produces rare earths, it will further align Cleveland-Cliffs with America's larger strategy to achieve material independence, as they previously accomplished in steel production.
At present, most of the world's rare earths are produced in China, which recently moved to limit exports. In response to this, as well as ongoing trade tensions with China, the Trump administration has been encouraging a reduction in reliance on Chinese-sourced minerals. Shares of US rare earths companies have risen sharply. Similarly, Cleveland-Cliffs shares were buoyed after President Trump and Australia's Prime Minister, Anthony Albanese, met to discuss a rare earths agreement.
In addition to the announcement about their rare earths ambitions, Cleveland-Cliffs reported a smaller-than-expected loss for the third quarter. The adjusted loss of $0.45 per share performed slightly better than predictions from analysts surveyed by Visible Alpha. The company's revenue increased by 3.6% to reach a total of $4.73 billion, although this fell below forecasts.
CEO Goncalves signaled this performance as evidence of the recovery in demand for automotive-grade steel manufactured in the US, following the revised trading environment implemented by the Trump administration. As part of this announcement, Cleveland-Cliffs also revised downwards its predictions for full-year capital expenditures to $525 million, and selling, general & administrative (SG&A) costs to $550 million.