TORONTO (miningweekly.com) – US iron-ore and coal producer Cliffs Natural Resources expects to record a loss in the range of about $375-million to $425-million on a pre-tax basis in the fourth quarter after agreeing to sell its Logan County Coal assets, in southern West Virginia, to Coronado Coal II for $175-million in cash, which it will use to repay debt.
Coronado will also assume certain liabilities.
Cliffs chairperson, president and CEO Lourenco Goncalves said on Wednesday that the transaction was another “important step in executing our strategy to transform Cliffs into a stronger, pure-play US iron-ore supplier”.
He noted that the transaction would provide employment opportunities for many of the current Logan County Coal employees to become part of the Coronado Coal team, which he billed as an experienced West Virginia-based coal operator.
Goncalves added that despite Cliffs’ other US coal assets, including the Oak Grove mine, in Alabama, and the Pinnacle mine, also in West Virginia, being unaffected by the transaction, Cliffs was exploring sale options for its other coal assets.
The Logan County Coal assets sale was subject to a number of conditions, including regulatory approvals. The transaction was expected to close by year-end.
Deutsche Bank Securities acted as financial adviser and Hahn Loeser & Parks acted as legal adviser to Cliffs.