Cliffs Natural blames Rio, BHP, Vale for weak iron-ore prices

(Adds CEO and analyst comments)

By Kanika Sikka and Anannya Pramanick

April 29 (Reuters) - Cliffs Natural Resources Inc (NYSE: CLF - news) , which is struggling to cope with oversupply in the iron ore market, blamed industry leaders BHP Billiton Ltd, Rio Tinto Plc and Vale SA for weak prices of the commodity.

The prices are depressed "not by the fact that these guys produce a lot of iron ore, but by the fact that they are saying that they will produce a lot more," Cliffs Chief Executive Lourenco Goncalves said on a call on Wednesday.

The company's shares fell as much as 7.5 percent on Wednesday.

Cliffs, which is focusing on its U.S. iron ore operations, said it was reducing footprints in Australia because of competition from the big three iron ore miners.

Cliffs is looking to sell one of three iron ore deposits in Western Australia and plans to exit the continent altogether.

"I can't wait to get out of Australia," Goncalves said.

Cliffs is also looking to sell its North American coal assets. Goncalves told Reuters that a deal was expected in the next six months.

But Wolfe Research analyst Gordon Johnson said "the idea that someone is going to buy coal assets from Cliffs is highly unlikely," noting that the company has been looking to sell the assets for over a year.

The company's U.S. coal operations include metallurgical coal mines in Alabama as well as three met coal mines in West Virginia that the company agreed to sell for $175 million in December.

Coal is only a small slice of Cliffs' operations, with the iron ore business accounting for more than three-fourths of its revenue.

"Assuming iron ore prices don't rebound significantly from here, it appears (Cliffs) is going to have cash flow issues," Johnson said.

The company had $355.7 million of cash and $2.88 billion of debt at the end of the first quarter.

Cliffs said it had replaced its revolving credit facility with a new $550 million asset-backed lending facility.

Goncalves, who took over as Cliffs' CEO after activist investor Casablanca Capital LP overturned the board last July, blamed the company's previous board for its debt issues.

"It's amazing how badly the board was handling this company."

Cliffs shares were down 6.4 percent at $5.49 in late afternoon trading on the New York Stock Exchange.

The stock had risen about 5 percent earlier in the day after the company reported a surprise quarterly profit on Tuesday. (Writing by Swetha Gopinath; Editing by Savio D'Souza and Kirti Pandey)