UPDATE: Deutsche Bank Downgrades Cliffs Natural Resources Following Bloom Lake Decision

In a report published Thursday, Deutsche Bank analyst Jorge Beristain downgraded the rating on

from Buy to Hold, and lowered the price target from $17.00 to $10.00. In the report, Deutsche Bank noted, “Cliffs determined that the potential to reach an agreement with prospective equity partners will not be possible by YE14 for its BL operations. Estimated closure costs to be $650-700m (including take-or-pay contracts) over five years, but is considered to be “worst case scenario”. Closure costs could be lowered and potential offsets could emerge (lower SG&A, reduced capex). Cliffs to rely primarily on US iron ore segment, while it continues to entertain potential sale of Asia Pacific iron ore and NA Coal segments. On reduced volumes (-15%) and lower expected EBITDA (-5%) we downgrade CLF to Hold and cut PT to $10/sh.” Cliffs Natural Resources closed on Wednesday at $8.17.