The 'BBB-' rating on Cliffs Natural Resources Inc. reflects what Standard&Poor's Ratings Services considers the company's "fair" business risk profile and "intermediate" financial risk profile. These assessments reflect its good domestic market position in the North American iron ore market, high barriers to entry, and significant cash flow generating ability throughout a cyclical downturn. However, our rating also incorporates the highly cyclical nature of iron ore, given its exposure to steel industry conditions, significant customer concentration, and somewhat high cost structure. In addition, the rating incorporates our expectation that Cliffs will maintain a somewhat aggressive growth strategy relative to acquisitions, in an effort to expand and diversify its earnings base away from iron ore. The company recently acquired
