Cleveland-Cliffs Completes the Sale of its Asia Pacific Iron Ore Assets
August 28 2018 - 9:13AM
Business Wire
Cleveland-Cliffs Inc. (NYSE: CLF) (“Cliffs” or the “Company”)
announced today that it has closed the sale of its Asia Pacific
Iron Ore assets to Mineral Resources Limited (“MRL”). With the
transaction, Cliffs’ previously disclosed costs of closing the
Australian operations were reduced by approximately $85
million. Included in this amount are asset retirement obligations
assumed by MRL.
As a result of the transaction, in the third quarter Cliffs will
be recording a reversal of its currency translation adjustment,
which will result in a positive contribution to net income of
approximately $230 million, or income of approximately $0.75 per
diluted share.
Lourenco Goncalves, Cliffs' Chairman, President and Chief
Executive Officer said, "With the closure of the sale of the
Australian assets, we have now completed our multi-year
transformation back to our roots as a supplier of high-grade iron
units to the Great Lakes steel industry." Mr. Goncalves added: "I
must again thank our APIO team for their crucial role and
contribution to our successful turnaround over the last four years.
This positive attitude and full engagement of our entire workforce
will continue to allow us to be successful as we grow and evolve to
supply high quality metallics to electric arc furnaces.”
About Cleveland-Cliffs Inc.
Founded in 1847, Cleveland-Cliffs Inc. is the largest and oldest
independent iron ore mining company in the United States. We are a
major supplier of iron ore pellets to the North American steel
industry from our mines and pellet plants located in Michigan and
Minnesota. By 2020, Cliffs expects to be the sole producer of hot
briquetted iron (HBI) in the Great Lakes region with the
development of its first production plant in Toledo, Ohio. Driven
by the core values of safety, social, environmental and capital
stewardship, our employees endeavor to provide all stakeholders
with operating and financial transparency. For more information,
visit http://www.clevelandcliffs.com.
Forward-Looking Statements
This release contains statements that constitute
"forward-looking statements" within the meaning of the federal
securities laws. As a general matter, forward-looking statements
relate to anticipated trends and expectations rather than
historical matters. Forward-looking statements are subject to
uncertainties and factors relating to Cliffs’ operations and
business environment that are difficult to predict and may be
beyond our control. Such uncertainties and factors may cause actual
results to differ materially from those expressed or implied by the
forward-looking statements. These statements speak only as of the
date of this release, and we undertake no ongoing obligation, other
than that imposed by law, to update these statements. Uncertainties
and risk factors that could affect Cliffs’ future performance and
cause results to differ from the forward-looking statements in this
release include, but are not limited to: uncertainty and weaknesses
in global economic conditions, including downward pressure on
prices caused by oversupply or imported products, reduced market
demand and risks related to U.S. government actions with respect to
Section 232 of the Trade Expansion Act (as amended by the Trade Act
of 1974), the North American Free Trade Agreement and/or other
trade agreements, treaties or policies; continued volatility of
iron ore and steel prices and other trends, including the supply
approach of the major iron ore producers, affecting our financial
condition, results of operations or future prospects, specifically
the impact of price-adjustment factors on our sales contracts; our
ability to cost-effectively achieve planned production rates or
levels, including at our HBI production plant; our ability to
successfully identify and consummate any strategic investments or
development projects, including our HBI production plant; the
impact of our customers reducing their steel production due to
increased market share of steel produced using other methods or
lighter-weight steel alternatives; risks related to former
international operations, including our ability to successfully
conclude the CCAA process in Canada and to close
our Asia Pacific business in a manner that minimizes cash
outflows and associated liabilities, including, among other things,
our ability to successfully complete the sale of the assets of our
Asia Pacific Iron Ore business and our ability to reach negotiated
settlements with other third parties in Australia; our ability to
successfully diversify our product mix and add new customers beyond
our traditional blast furnace clientele; our actual economic iron
ore reserves or reductions in current mineral estimates, including
whether any mineralized material qualifies as a reserve; our
ability to maintain appropriate relations with unions and
employees; the outcome of any contractual disputes with our
customers, joint venture partners or significant energy, material
or service providers or any other litigation or arbitration; the
ability of our customers and joint venture partners to meet their
obligations to us on a timely basis or at all; problems or
uncertainties with productivity, tons mined, transportation,
mine-closure obligations, environmental liabilities,
employee-benefit costs and other risks of the mining industry; our
ability to reach agreement with our customers regarding any
modifications to sales contract provisions, renewals or new
arrangements; our actual levels of capital spending; our level of
indebtedness could limit cash flow available to fund working
capital, capital expenditures, acquisitions and other general
corporate purposes or ongoing needs of our business; availability
of capital and our ability to maintain adequate liquidity; changes
in sales volume or mix; events or circumstances that could impair
or adversely impact the viability of a mine and the carrying value
of associated assets, as well as any resulting impairment charges;
impacts of existing and increasing governmental regulation and
related costs and liabilities, including failure to receive or
maintain required operating and environmental permits, approvals,
modifications or other authorization of, or from, any governmental
or regulatory entity and costs related to implementing improvements
to ensure compliance with regulatory changes; uncertainties
associated with natural disasters, weather conditions,
unanticipated geological conditions, supply or price of energy,
equipment failures and other unexpected events; adverse changes in
currency values, currency exchange rates, interest rates and tax
laws; and the potential existence of significant deficiencies or
material weakness in our internal control over financial
reporting.
For additional factors affecting the business
of Cliffs, refer to Part I – Item 1A. Risk Factors of our
Annual Report on Form 10-K for the year ended December 31, 2017.
You are urged to carefully consider these risk factors.
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version on businesswire.com: https://www.businesswire.com/news/home/20180828005472/en/
Cleveland-Cliffs Inc.MEDIA CONTACTPatricia Persico,
216-694-5316Director, Corporate CommunicationsorINVESTOR
CONTACTPaul Finan, 216-694-6544Director, Investor Relations
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