CLEVELAND, Dec. 22, 2015 /PRNewswire/ -- Cliffs Natural
Resources Inc. (NYSE: CLF) has closed the sale of its
remaining coal business, Pinnacle Mine in West Virginia and Oak Grove Mine in
Alabama, to Seneca Coal Resources,
LLC. Cliffs values the transaction at closing at $268 million based on Seneca Coal assuming all
liabilities of the business. Additionally, Seneca Coal may pay
Cliffs an earn out of up to $50
million contingent upon the terms of a revenue sharing plan
which extends through the year 2020.
Lourenco Goncalves, Cliffs'
Chairman, President and Chief Executive Officer said, "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
US iron ore pellet-centric, environmentally compliant strategy. 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." Mr. Goncalves added: "I commend the Cliffs' coal operations
team for an outstanding job achieving great safety, production and
quality results, preserving the value of our coal business in light
of the many headwinds the industry has faced over this past year.
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."
Cliffs said that the transaction closed upon signing of the deal
on Dec. 22, 2015. The Company stated
that the deal structure is a sale of the equity interests of
Cliffs' remaining coal business which includes the legal
entities of Cliffs North American Coal LLC; Pinnacle Mining
Company, LLC; Pinnacle Land Company, LLC; Oak Grove Resources, LLC;
Oak Grove Land Company, LLC; and Beard Pinnacle, LLC.
About Cliffs Natural Resources Inc.
Cliffs Natural Resources Inc. is a leading mining and natural
resources company in the United
States. The Company is a major supplier of iron ore pellets
to the North American steel industry from its mines and pellet
plants located in Michigan and
Minnesota. Cliffs also operates an
iron ore mining complex in Western
Australia. Driven by the core values of safety, social,
environmental and capital stewardship, Cliffs' employees endeavor
to provide all stakeholders operating and financial transparency.
News releases and other information on the Company are available at
http://www.cliffsnaturalresources.com.
About Seneca Coal
Seneca Coal Resources, LLC is affiliated with West Virginia based ERP Compliant Fuels, LLC
("ERP"). Seneca plans to produce
4.4 million tons of metallurgical coal in 2016 and employ 811
people in West Virginia and
Alabama. ERP is engaged in
rebalancing the supply of domestic coal through the purchase,
reclamation, and retirement of 135 mining permits in 5 states. 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. With the Seneca purchase ERP will operate three
underground longwall mines, producing over 8 million tons of
thermal and metallurgical coal annually.
Forward-Looking Statements
This release contains statements that constitute
"forward-looking statements" within the meaning of the federal
securities laws. As a general matter, forward-looking statements
relate to anticipated trends and expectations rather than
historical matters. Forward-looking statements are subject to
uncertainties and factors relating to Cliffs' operations and
business environment that are difficult to predict and may be
beyond our control. Such uncertainties and factors may cause actual
results to differ materially from those expressed or implied by the
forward-looking statements. These statements speak only as of the
date of this release, and we undertake no ongoing obligation, other
than that imposed by law, to update these statements. Uncertainties
and risk factors that could affect Cliffs' future performance and
cause results to differ from the forward-looking statements in this
release include, but are not limited to: trends affecting our
financial condition, results of operations or future prospects,
particularly the continued volatility of iron ore and coal prices;
availability of capital and our ability to maintain adequate
liquidity; uncertainty or weaknesses in global economic conditions,
including downward pressure on prices caused by oversupply or
imported products, reduced market demand and any change to the
economic growth rate in China; our
ability to reach agreement with our iron ore customers regarding
any modifications to sales contract provisions, renewals or new
arrangements; our ability to maintain appropriate relations with
unions and employees and enter into or renew collective bargaining
agreements on satisfactory terms; the impact of our customers
reducing their steel production or using other methods to produce
steel; our ability to successfully execute an exit option for our
Canadian Entities that minimizes the cash outflows and associated
liabilities of such entities, including the CCAA process; our
ability to successfully identify and consummate any strategic
investments and complete planned divestitures; our ability to
successfully diversify our product mix and add new customers beyond
our traditional blast furnace clientele; the outcome of any
contractual disputes with our customers, joint venture partners or
significant energy, material or service providers or any other
litigation or arbitration; the ability of our customers and joint
venture partners to meet their obligations to us on a timely basis
or at all; the impact of price-adjustment factors on our sales
contracts; changes in sales volume or mix; our actual levels of
capital spending; our actual economic iron ore reserves or
reductions in current mineral estimates, including whether any
mineralized material qualifies as a reserve; events or
circumstances that could impair or adversely impact the viability
of a mine and the carrying value of associated assets, as well as
any resulting impairment charges; the results of prefeasibility and
feasibility studies in relation to projects; impacts of existing
and increasing governmental regulation and related costs and
liabilities, including failure to receive or maintain required
operating and environmental permits, approvals, modifications or
other authorization of, or from, any governmental or regulatory
entity and costs related to implementing improvements to ensure
compliance with regulatory changes; our ability to cost-effectively
achieve planned production rates or levels; uncertainties
associated with natural disasters, weather conditions,
unanticipated geological conditions, supply or price of energy,
equipment failures and other unexpected events; adverse changes in
currency values, currency exchange rates, interest rates and tax
laws; risks related to international operations; availability of
capital equipment and component parts; the potential existence of
significant deficiencies or material weakness in our internal
control over financial reporting; problems or uncertainties with
productivity, tons mined, transportation, mine-closure obligations,
environmental liabilities, employee-benefit costs and other risks
of the mining industry; and the risk factors identified in Part I -
Item 1A of our Annual Report on Form 10-K for the year ended
December 31, 2014. The information
contained herein speaks as of the date of this release and may be
superseded by subsequent events. Except as may be required by
applicable securities laws, we do not undertake any obligation to
revise or update any forward-looking statements contained in this
release.
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SOURCE Cliffs Natural Resources Inc.