.gif?width=220&height=200&mediaprotectionhash=b13da841472e6e7ed500ee35df2a350aaf53d75246118b33ea2095cc7e9a3fc4&ext=.gif)
Cliffs Declares Force Majeure on Coal Shipments from Pinnacle
04/03/2008 - Cliffs North American Coal declares force majeure on coal shipments from its Pinnacle Mine, as the longwall plow is currently mining through a sandstone intrusion into the coal seam, causing coal production to slow down significantly.
Cleveland-Cliffs Inc.’s Cliffs North American Coal, LLC subsidiary has declared force majeure on coal shipments from its Pinnacle Mine in Pineville, W.Va.
Cliffs indicated the longwall plow is currently mining through a sandstone intrusion into the coal seam, which has caused coal production at the mine to slow down significantly. The slowdown has also resulted in reduced shipments.
“As always, safety of employees is our first priority,” said Joseph A. Carrabba, Cliffs’ Chairman, President and CEO.
The company said the sandstone intrusion is a continuation of the same geology that slowed production at Pinnacle Mine in August 2007. “While disappointed to find the same geologic condition in the current section of the mine as the previous section, the discovery provides useful information on the fault direction and slope for use in our mine planning for the rest of 2008 and the future,” said Carrabba.
“We estimate that we are currently 25% through the fault area and our North American Coal team is diligently working to move the plow forward through this difficult mining. At this time, we believe we will be in difficult mining for 60 to 90 days.”
The company said the fault area accounts for approximately 1200 feet of the approximately 10,000-foot coal section being mined, and that the longwall plow has progressed approximately 300 feet since first encountering the area in mid-March. Cliffs also indicated that prior to encountering the adverse geologic conditions it had already begun development on the next coal section in its mine plan and expects to avoid similar conditions in this next section.
As a result of the current mining conditions at Pinnacle Mine, Cliffs said its total metallurgical coal production forecast for 2008 will be impacted by approximately 100,000 tons for every 30 days of mining in the fault area.
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 80% 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.
