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Cliffs Enters Term Sheet for Potential Sale of Cockatoo Island Assets
09/06/2011 - Cliffs Natural Resources subsidiary HWE Cockatoo and its joint venture partner Cockatoo Mining have entered a term sheet with Pluton Resources Limited to sell its beneficial interest in its Cockatoo Island joint venture.
Cliffs Natural Resources Inc. subsidiary HWE Cockatoo and its joint venture partner Cockatoo Mining have entered a term sheet with Pluton Resources Limited to sell its beneficial interest in the mining tenements and certain infrastructure of its Cockatoo Island joint venture.
Pluton has expressed interest in the assets for potential synergies that the Cockatoo Island operations could have with Pluton's Irvine Island assets in the Kimberly Iron Ore Hub of northern Western Australia.
In consideration, Pluton would assume the liabilities for the environmental rehabilitation of Cockatoo Island when Pluton's mining operations are completed.
The potential transaction is expected to occur at the end of the current stage mining of Cockatoo Island, known as Stage III, which is anticipated to be complete in late 2012. The proposed transaction is subject to completion of due diligence, definitive agreements between all parties, and conditional on regulatory and third party consents.
Cliffs' 50% interest in the Cockatoo Island joint venture is currently reported within the company's Asia Pacific Iron Ore business segment. Cliffs currently receives equity production of approximately 700,000 tons of high-grade fines annually from its share of the joint venture. Cliffs and HWE Cockatoo have previously indicated a plan for operations to cease at Cockatoo Island in late 2012.
Cliffs Natural Resources Inc., an international mining and natural resources company, is a major global iron ore producer and a significant producer of high- and low-volatile metallurgical coal. Cliffs' strategy is to continually achieve greater scale and diversification in the mining industry through a focus on serving the world's largest and fastest growing steel markets.
The company is organized through a global commercial group responsible for sales and delivery of Cliffs products and a global operations group responsible for the production of the minerals the company markets. Cliffs operates iron ore and coal mines in North America and two iron ore mining complexes in Western Australia. The company also has a 45% economic interest in a coking and thermal coal mine in Queensland, Australia, as well as a major chromite project, in the pre-feasibility stage of development, located in Ontario, Canada.
