Cleveland-Cliffs Acquires Remaining Interest in United Taconite
07/15/2008 - Cleveland-Cliffs Inc has acquired United Mining's 30% interest in United Taconite, making it the sole owner of the Eveleth, Minn., iron ore mining and pelletizing operation.
Cleveland-Cliffs Inc has acquired United Mining Co. Ltd.'s 30% interest in United Taconite (UTAC), making it the sole owner of the Eveleth, Minn., iron ore mining and pelletizing operation.
“Strategically, the consolidation of the UTAC minority interest strengthens our core North American Iron Ore business, and together with our Northshore property, gives Cliffs two wholly-owned iron ore assets in North America,” commented Joseph Carrabba, Cliffs’ Chairman, President and CEO. “Moreover, as Cliffs currently manages the operation, there is no integration risk associated with the transaction.”
Consideration will be a mix of cash, stock and iron ore pellets that includes $100 million in cash and 1,529,619 Cleveland-Cliffs common shares. The transaction also includes a provision to supply 1.2 million tons of iron ore pellets over the next five quarters at no cost.
United Taconite is expected to produce 5.2 million tons in 2008 and at Dec. 31, 2007 had proven reserves of 133 million tons. As a result of this transaction, as well as the recently announced expansion project at the Company’s Michigan mines, Cliffs’ total North American Iron Ore equity pellet production will increase to 23 million tons in 2008, and over 24 million tons in 2009.
The acquisition, which does not require regulatory approval, has an effective close date of June 30, 2008.
Headquartered in Cleveland, Ohio, Cleveland-Cliffs Inc. is an international mining company, the largest producer of iron ore pellets in North America and a major supplier of metallurgical coal to the global steelmaking industry. The company operates six iron ore mines in Michigan, Minnesota and Eastern Canada, and three coking coal mines in West Virginia and Alabama. Cliffs also owns 85% of Portman Limited, a large iron ore mining company in Australia, serving the Asian iron ore markets with direct-shipping fines and lump ore. In addition, the company has a 30% interest in the Amapá Project, a Brazilian iron ore project, and a 45% economic interest in the Sonoma Project, an Australian coking and thermal coal project.
