CLEVELAND, May 24, 2016 /PRNewswire/ -- Cliffs Natural
Resources Inc. (NYSE: CLF) announced today that
through its subsidiaries it has entered into multiple agreements
with Minnesota Power, a utility division of ALLETE Inc. (NYSE:
ALE). Cliffs will receive $31
million dollars in cash as part of a long-term purchased
power arrangement for its Northshore operation with Minnesota Power
through 2031. The agreements, pending potential regulatory approval
of the sale of utility assets, include certain non-core
operations; transmission assets at United Taconite;
certain land options at United Taconite and Northshore Mining
Company; and transportation rights along the Cliffs Erie rail
assets. Separately, Cliffs has extended its regulated power
arrangements with Minnesota Power for 10 years at its United
Taconite and Babbitt facilities.
Lourenco Goncalves, Cliffs'
Chairman, President and CEO, said, "I am very pleased that we
solidified a strategic relationship with Minnesota Power for
long-term, low cost power which helps us preserve our future
competitiveness. Importantly, the signing of these new agreements
will provide Cliffs with considerable certainty in our energy
management for these operations, and will also enable us to
continue to improve our cash production costs over the
long-term."
"We greatly value our working relationship with Cliffs and
believe strong mining and paper industries are critical to our
region's economic success," said Al
Hodnik, ALLETE Chairman, President and CEO. "These
agreements demonstrate the value of a strong partnership between
Minnesota Power and Northeastern
Minnesota's natural resources industries. These steps can
help Cliffs achieve its goals of remaining competitive, maintaining
regional jobs and further enhancing their products through
technology advances."
Cliffs stated that the supply agreement will not involve any
immediate staff reductions at its Silver Bay Power plant.
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
www.cliffsnaturalresources.com.
About Minnesota Power:
Minnesota Power provides
electric service within a 26,000-square-mile area in northeastern
Minnesota, supporting comfort,
security and quality of life for 144,000 customers, 16
municipalities and some of the largest industrial customers in
the United States. More
information can be found at www.mnpower.com.
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 prices; availability of capital
and our ability to maintain adequate liquidity, in particular
considering borrowing base reductions from the sale of non-core
assets; our level of indebtedness could limit cash flow available
to fund working capital, capital expenditures, acquisitions and
other general corporate purposes or ongoing needs of our business,
which could prevent us from fulfilling our debt obligations;
continued weaknesses in global economic conditions, including
downward pressure on prices caused by oversupply or imported
products, including the impact of any reduced barriers to trade,
recently filed and forthcoming trade cases, 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, including with
ArcelorMittal; uncertainty relating to restructurings in the steel
industry and/or affecting the steel industry; 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 certain of our Canadian
entities that minimizes the cash outflows and associated
liabilities of such entities, including the Companies' Creditors
Arrangement Act (Canada) 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; and problems or uncertainties
with productivity, tons mined, transportation, mine-closure
obligations, environmental liabilities, employee-benefit costs and
other risks of the mining industry. For additional factors
affecting the business of Cliffs, refer to Part I – Item 1A. Risk
Factors of our Annual Report on Form 10-K for the year ended
December 31, 2015. You are urged to
carefully consider these risk factors.
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SOURCE Cliffs Natural Resources Inc.