Cleveland-Cliffs has entered into a definitive agreement to sale all the assets of its Asia Pacific Iron Ore business in Australia to Mineral Resources Limited. Mineral Resources is a leading Australian mining services company with a portfolio of existing mining operations across multiple commodities, including iron ore.
The transaction is supported by the Western Australian government and will reduce the costs to Cleveland-Cliffs of its Koolyanobbing complex. Cliffs announced in March it would end mining at Koolyanobbing and would make its last shipment of ore from the end of June after accepting big discounts on its low-grade ore
The costs associated with the closing of the Australian operations have been reduced by $65-75 million as a result of the sale according to the press release. Previous estimated costs of closure were $200 million.
Lourenco Goncalves, Cliffs’ Chairman, President and CEO said this divesture represented the final step the firm’s US iron ore-centric strategy.
The transaction is expected to close before the end of the second quarter of 2018, subject to certain conditions precedent being achieved. Cliffs CEP stated that the deal is structured as a sale of the following assets and assumption of certain related liabilities: mining tenements, mine facility assets, port assets and the benefit of certain contracts.