Cleveland-Cliffs Inc. entered into a definitive agreement for the sale of substantially all of the assets of its Asia Pacific Iron Ore business to Mineral Resources Ltd., an 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 $65 million to $75 million based on mineral resources assuming certain obligations and Cliffs reaching negotiated settlements with other third parties.
“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,” said Cliffs’ Chairman, President and Chief Executive Officer Lourenco Goncalves. “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.”
The transaction is expected to close before the end of the second quarter of 2018. Cliffs said in a news release that the deal is structured as a sale of mining tenements, mine facility assets, port assets and the benefit of certain contracts along with assumption of certain related liabilities.