Cliffs Natural Resources to Sell Quebec Iron Ore Mine

Cliff Resources is looking to exit its Easter Canadian iron ore operations that could see the closure of its Bloom Lake mine in Quebec.

"Despite the continued interest of the prospective equity partners in Bloom Lake and in its high quality ore, the potential investment is not achievable within a time frame acceptable to Cliffs, said Lourenco Goncalves , Cliffs' Chairman, President and Chief Executive Officer. “ With expansion no longer viable, we have shifted our focus to executing an exit option for Eastern Canadian operations that minimizes the cash outflows and associated liabilities."

The investment to develop the Bloom Lake Phase 2 project was estimated to cost $1.2 billion. The decision to pull out of the project would save Cliffs between $520 million to $570 million as estimated closure costs are expected to be in the range of $650 million to $700 million in the next five years.  

Cliffs Loses Arbitration Case

Cliffs recently reported that Cliffs Quebec Iron Mining Limited, along with Bloom Lake General Partner Limited and The Bloom Lake Iron Ore Limited Partnership, lost an arbitration claim they filed against a former Bloom Lake customer relating to the August 2011 termination of an iron ore sales agreement.

The arbitrators found in favor of the former customer and awarded it damages of approximately $71 million as well as court costs and interest from the date of termination of the offtake agreement in August 2011. Cliffs Quebec is currently reviewing the award to determine appropriate next steps.

Cliffs Plans To Sell Ring of Fire Interests

Earlier this year Cliffs Natural Resources indicated that it was considering alternatives for its Black Thor and Black Label properties in the Ring of Fire including sell it to interested parties.

The Ring of Fire has been termed a multi-generational mining project in the James Bay Lowlands about 500 km north of Thunder Bay. However delays in building much needed energy and transportation infrastructure has cast doubt upon the feasibility of mining in the area.

In November, 2013 Cliffs announced it had suspended work in the Ring of Fire because it was frustrated by the slow pace of infrastructure development which make mining activity viable. Subsequently, Cliffs' shareholders voted out the previous board and elected members who were opposed to expending money in developing the Ring of Fire. Recently, Cliffs has spoken to KWG Resources a mining exploration company that also has properties with chromite deposits in the area about a possible sale.

About Cliffs Natural Resources Inc.

Cliffs Natural Resources Inc. is a leading mining and natural resources company. The Company is a major iron ore producer in the Great Lakes region and a significant producer of high-and low-volatile metallurgical coal in the U.S.  Additionally, Cliffs operates iron ore mines in Eastern Canada and an iron mining complex in Western Australia. Driven by the core values of social, environmental and capital stewardship, Cliffs' employees endeavor to provide all stakeholders operating and financial transparency. News releases and other information on the Company are available at: http://www.cliffsnaturalresources.com