- AustraliaNorth AmericaWorld
Investing News NetworkYour trusted source for investing success
- Lithium Outlook
- Oil and Gas Outlook
- Gold Outlook Report
- Uranium Outlook
- Rare Earths Outlook
- All Outlook Reports
- Top Generative AI Stocks
- Top EV Stocks
- Biggest AI Companies
- Biggest Blockchain Stocks
- Biggest Cryptocurrency-mining Stocks
- Biggest Cybersecurity Companies
- Biggest Robotics Companies
- Biggest Social Media Companies
- Biggest Technology ETFs
- Artificial Intellgience ETFs
- Robotics ETFs
- Canadian Cryptocurrency ETFs
- Artificial Intelligence Outlook
- EV Outlook
- Cleantech Outlook
- Crypto Outlook
- Tech Outlook
- All Market Outlook Reports
- Cannabis Weekly Round-Up
- Top Alzheimer's Treatment Stocks
- Top Biotech Stocks
- Top Plant-based Food Stocks
- Biggest Cannabis Stocks
- Biggest Pharma Stocks
- Longevity Stocks to Watch
- Psychedelics Stocks to Watch
- Top Cobalt Stocks
- Small Biotech ETFs to Watch
- Top Life Science ETFs
- Biggest Pharmaceutical ETFs
- Life Science Outlook
- Biotech Outlook
- Cannabis Outlook
- Pharma Outlook
- Psychedelics Outlook
- All Market Outlook Reports
Cleveland-Cliffs Kangaroo Hops Out of Australia
The Ohio-based company has decided to focus on operations in the US, and has finalized an agreement to sell its Australian assets to ASX-listed company Mineral Resources.
US iron ore miner Cleveland-Cliffs (NYSE:CLF) has finalized its exit from the land down under as part of a new US-focused strategy.
In an announcement on Tuesday (June 12), the Ohio-based company said it has finalized an agreement with Australian company Mineral Resources (ASX:MIN) to sell its Asia-Pacific operations.
The American company will be handing over the keys to its Koolyanobbing complex in the Wheatbelt region of Western Australia, which includes the operating deposits of Windarling and Mount Jackson as well as a processing plant on site.
The company will no doubt be glad to offload the Australian assets, after they contributed US$71 million to the US$84-million net loss reported in the first quarter of 2018. The costs associated with the Western Australian operations were to do with “unusual charges related to the closure of the mine.”
The operations had previously produced 11 million tonnes of iron ore a year, but profitability took a hit with changes to Chinese regulations on steel.
According to local media, iron ore exports from the Koolyanobbing operation accounted for 75 percent of tonnage passing through the Port of Esperance, meaning closure of the mines could lead to flow-on unemployment in the region.
The sale of Koolyanobbing will save Cleveland-Cliffs a significant portion in costs associated with winding up operations.
“As a result of the transaction, Cliffs’ previously disclosed costs of closing the Australian operations (approximately US$90 million) 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,” says the company, noting that the sale is supported by the state government.
Cleveland-Cliffs President and CEO Lourenco Goncalves said the sale marks the end of the company’s operations outside the US.
“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,” he said.
The transaction will close before the end of June, and the deal is structured in such a way that new owner Mineral Resources will be assuming certain related liabilities around the tenements, facilities, port assets and contracts still in place.
Cleveland-Cliffs will now operate exclusively in the US, with five iron ore mines in Michigan and Minnesota, and a planned hot briquetted iron production plant in Toledo, Ohio.
Koolyanobbing buyer Mineral Resources has a number of iron ore assets in the Pilbara region at the other end of Western Australia from its new asset in the Wheatbelt, and is also heavily involved in support services around mining.
Mineral Resources had another acquisition lined up in the proposed takeover of Pilbara-focused Atlas Iron (ASX:AGO), but that’s up in the air after fellow Australian miner Fortescue Metals (ASX:FMG) snapped up almost 20 percent of the smaller company and signaled its intention to block the plan.
On Tuesday, Cleveland-Cliffs’ share price was trading up 0.69 percent in New York at US$8.78, while Mineral Resources was trading down 6.64 percent on the Australian Securities Exchange at AU$17.29.
Don’t forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.
The Beginner’s Guide to Investing in Gold (Australia Edition)
Ready to invest in gold? Our beginner's guide makes it simple to get started.
Download your investing guide today.
Learn About Exciting Investing Opportunities in the Gold Sector
Your Newsletter Preferences
Scott has a Master's Degree in journalism from the University of Melbourne and reports on the resources industry for INN.
Scott has experience working in regional and small-town newsrooms in Australia. With a background in history and politics, he's interested in international politics and development and how the resources industry plays a role in the future.
Investing News Network websites or approved third-party tools use cookies. Please refer to the cookie policy for collected data, privacy and GDPR compliance. By continuing to browse the site, you agree to our use of cookies.
Scott has a Master's Degree in journalism from the University of Melbourne and reports on the resources industry for INN.
Scott has experience working in regional and small-town newsrooms in Australia. With a background in history and politics, he's interested in international politics and development and how the resources industry plays a role in the future.
Learn about our editorial policies.