Cliff's Natural Resources Enters New Supply Agreement With ArcelorMittal

Cliff’s Natural Resources (NYSE:CLF) has entered a long-term commercial supply agreement with ArcelorMittal USA for tailor-made iron ore pellets. Cliff’s will supply ArcelorMittal with iron pellets through 2026.
As quoted in the press release:

The new agreement will replace two existing agreements expiring in Dec. 2016 and Jan. 2017 and fill the entirety of ArcelorMittal’s pellet purchase requirements from the previous contracts. The new commercial agreement includes ArcelorMittal’s total purchases of iron ore pellets from Cliffs up to 10 million long tons and preserves Cliffs’ current position as ArcelorMittal USA’ssole outside supplier of pellets. Accordingly, Cliffs will continue to be the sole pellet supplier of ArcelorMittal’s Indiana Harbor West and Cleveland Works steelmaking facilities, while maintaining the current level of pellet supply to ArcelorMittal’s Indiana Harbor East facility. The new contract also establishes a  minimum tonnage of pellets of 7 million long tons, which is higher than the current minimum level from the two previous contracts combined.

Cliff’s Chairman, President and CEO Lourenco Goncalves said:

Cliffs is pleased to announce a major accomplishment within the execution of our strategy, which is the signature of a new 10-year pellet supply agreement with ArcelorMittal. We arrived at a mutually beneficial agreement, as both companies recognize the importance of bringing sustainable value to our respective businesses. The signing of the new supply agreement confirms what we have always stated regarding the strength of the business relationship between Cliffs and ArcelorMittal USA. The new agreement also removes any remaining uncertainty about Cliffs, and supports our conviction in the bright future of our Company, its employees, its shareholders, and all other stakeholders, including the communities in which we operate.

Click here for the full press release.