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Cliffs Divests Remaining Met Coal Assets
12/23/2015 - Iron ore producer Cliffs Natural Resources Inc. has exited the coal business, closing on a deal to sell its remaining metallurgical coal mines, the company has announced.
In a statement, Cliffs said it closed on the US$268 million equity sale with Seneca Coal Resources LLC on 22 December. Under the deal, Seneca is assuming all of the liabilities of the Pinnacle Mine in West Virginia and Oak Grove Mine in Alabama. Additionally, Seneca has agreed to pay an earn out that could be worth up to US$50 million through 2020.
"The sale of Pinnacle and Oak Grove to Seneca Coal marks Cliffs' exit from the coal business, and represents another very important step in the implementation of our U.S. iron ore pellet-centric, environmentally compliant strategy,” said Cliffs chairman and CEO Lourenco Goncalves in a statement.
“We are pleased to have found a buyer that was able to agree on a transaction that not only brings real value to Cliffs shareholders, but will also preserve jobs for the exceptional people at these two mines," he said. “This transaction was only made possible due to the high quality of our people at the coal mines, and I wish them the very best as they move forward with Seneca Coal."
Seneca Coal Resources is affiliated with West Virginia-based ERP Compliant Fuels LLC and plans to produce 4.4 million tons of metallurgical coal in 2016.
ERP is actively marketing the sale of "compliant fuel,” which bundles reforestation carbon credits with coal sales, to reduce the rate of growth in atmospheric carbon dioxide. As part of its operations, it is rebalancing U.S. coal supplies through the purchase, reclamation and retirement of 135 mining permits in five states.
"The sale of Pinnacle and Oak Grove to Seneca Coal marks Cliffs' exit from the coal business, and represents another very important step in the implementation of our U.S. iron ore pellet-centric, environmentally compliant strategy,” said Cliffs chairman and CEO Lourenco Goncalves in a statement.
“We are pleased to have found a buyer that was able to agree on a transaction that not only brings real value to Cliffs shareholders, but will also preserve jobs for the exceptional people at these two mines," he said. “This transaction was only made possible due to the high quality of our people at the coal mines, and I wish them the very best as they move forward with Seneca Coal."
Seneca Coal Resources is affiliated with West Virginia-based ERP Compliant Fuels LLC and plans to produce 4.4 million tons of metallurgical coal in 2016.
ERP is actively marketing the sale of "compliant fuel,” which bundles reforestation carbon credits with coal sales, to reduce the rate of growth in atmospheric carbon dioxide. As part of its operations, it is rebalancing U.S. coal supplies through the purchase, reclamation and retirement of 135 mining permits in five states.
