The American iron ore mining company, Cleveland-Cliffs, has announced that it has entered into a definitive agreement for the sale of substantially all of the assets of its Asia Pacific Iron Ore business to Mineral Resources Limited, a leading Australian mining services company with a portfolio of existing mining operations across multiple commodities, including iron ore.
As a result of the transaction, Cliffs’ previously disclosed costs of closing the Australian operations are expected to be reduced by approximately US$65-75 million based on Mineral Resources assuming certain obligations and Cliffs reaching negotiated settlements with other third parties. The transaction is supported by the Western Australian government.
Lourenco Goncalves, Cliffs’ Chairman, President and Chief Executive Officer said, “The sale of these assets to Mineral Resources marks Cliffs’ exit from the Australian iron ore business and represents the final step in the implementation of our US iron ore-centric strategy.
“We are pleased to have reached agreement on a transaction that not only brings real value to Cliffs shareholders, but also represents the potential for continued job opportunities for employees in Western Australia who would be impacted by the pending closure of the Koolyanobbing complex.”
Mr. Goncalves commended the Cliffs’ Australian team for an outstanding job achieving great safety, production and quality results over the years and also maintaining a positive attitude and accomplishing Cleveland-Cliffs’ operating objectives over the last few years “in spite of the many headwinds the direct-ship iron ore industry has faced during this period.”
The transaction is expected to close before the end of the second quarter of 2018, subject to certain conditions precedent being achieved.