Cleveland-Cliffs Announces Acquisition of PinnOak Resources, Major Metallurgical Coal Producer

    CLEVELAND, June 14 /PRNewswire-FirstCall/ -- Cleveland-Cliffs Inc
 ("Cliffs") (NYSE:   CLF) today announced that it has agreed to acquire
 PinnOak Resources, LLC, and its subsidiary operating companies, for $450
 million in cash plus approximately $150 million in debt. PinnOak is a
 privately owned domestic producer of high-quality, low-volatile
 metallurgical coal. Payment of 25 percent of the cash portion will be
 deferred until December 31, 2009. The transaction is expected to close
 within 60 days and is subject to regulatory clearances.
     "This acquisition represents an attractive expansion opportunity for
 our Company. When combined with our Australian coking and thermal coal
 operation, the Sonoma Project, the Company will control a 10 million ton
 position, with the majority being for export," commented Joseph A.
 Carrabba, Cleveland-Cliffs chairman, president and chief executive officer.
 "It marks yet another step in the execution of our strategy to deepen
 Cliffs' exposure to faster growing international markets and further
 diversify its mineral sales."
     The transaction is expected to increase Cliffs' 2008 revenues by
 approximately $400 million and add approximately $100 million in EBITDA.
 Due to customer transition issues, full-year 2007 revenues are expected to
 be approximately $300 million. The transaction will have minimal earnings
 impact to Cliffs in 2007 as it covers acquisition and integration costs.
     PinnOak's operations include two complexes comprising three underground
 mines -- the Pinnacle and Green Ridge mines in southern West Virginia, and
 the Oak Grove mine near Birmingham, Alabama. Combined, the mines have the
 capacity to produce in excess of seven million tons of premium-quality
 metallurgical coal annually.
     The Pinnacle complex, located in Pineville, West Virginia, comprises
 the Pinnacle and Green Ridge properties. In operation since 1969, Pinnacle
 produces a high-quality, low-volatile metallurgical coal and boasts the
 only longwall plow system in the United States. The Green Ridge mine,
 opened in 2004, also produces a premium-quality product. Coal from both
 mines is processed by the Pinnacle Preparation Plant and then shipped to
 the customer via the Norfolk Southern rail line and exports from the port
 of Norfolk, Virginia.
     Located in Adger, Alabama, the Oak Grove mine has been in operation
 since 1975 producing high-quality, low-volatile, very low-sulfur product,
 which is in high demand due to its excellent coking characteristics.
 Processing from this mine is done at the Concord Preparation Plant and
 product is transported domestically by rail, barge or truck. International
 shipments initiate from the port of Mobile, Alabama.
     Approximately 80 percent of PinnOak's total 2007 production is slated
 for the international steel market, with the balance committed to
 integrated steelmakers in the United States. The company produced
 approximately 3.9 million tons of coal in 2006 and has current estimated
 reserves of 140 million tons.
     "We are excited to welcome the PinnOak team to the Cliffs organization
 as they provide a depth of experience and an additional growth platform
 consistent with the Company's strategic objectives," Carrabba added.
     To be added to Cleveland-Cliffs' e-mail distribution list, please click
 on the link below:
     http://www.cpg-llc.com/clearsite/clf/emailoptin.html
     Cleveland-Cliffs Inc, headquartered in Cleveland, Ohio, is the largest
 producer of iron ore pellets in North America and sells the majority of its
 pellets to integrated steel companies in the United States and Canada.
 Cleveland-Cliffs Inc operates a total of six iron ore mines located in
 Michigan, Minnesota and Eastern Canada. The Company owns 80 percent of
 Portman Limited, a large iron ore mining company in Australia, serving the
 Asian iron ore markets with direct-shipping fines and lump ore. It also has
 a 30 percent interest in the Amapa Project, a Brazilian iron ore project,
 and a 45 percent economic interest in the Sonoma Project, an Australian
 coking and thermal coal project.
     News releases and other information on the Company are available on the
 Internet at: http://www.cleveland-cliffs.com
     This news release contains predictive statements that are intended to
 be made as "forward-looking" within the safe harbor protections of the
 Private Securities Litigation Reform Act of 1995. Although the Company
 believes that its forward-looking statements are based on reasonable
 assumptions, such statements are subject to risk and uncertainties. There
 can be no assurance that the transactions contemplated in connection with
 the acquisition of PinnOak will be consummated.
     Actual results may differ materially from such statements for a variety
 of reasons, including: market forces that negatively impact the domestic
 and international low-volatile metallurgical coal markets; changes in
 global demand for low-volatile metallurgical coal by integrated steel
 producers due to changes in steel utilization rates; operational factors;
 availability of capital equipment and component parts; availability of
 float capacity and other transportation issues; changes in the financial
 condition of the Company's partners and/or customers; rejection of major
 contracts and/or venture agreements by customers and/or participants under
 provisions of the U.S. Bankruptcy Code or similar statutes in other
 countries; inability to achieve expected production levels; failure to
 receive or maintain required environmental permits; problems with
 productivity, labor disputes, weather conditions, fluctuations in coal
 grade, tons mined, changes in cost factors including energy costs,
 transportation and employee benefit costs; and the effect of these various
 risks on the Company's future cash flows, debt levels, liquidity and
 financial position.
     Reference is also made to the detailed explanation of the many factors
 and risks that may cause such predictive statements to turn out
 differently, set forth in the Company's Annual Report and Reports on Form
 10-K and previous news releases filed with the Securities and Exchange
 Commission, which are publicly available on Cleveland-Cliffs' website. The
 information contained in this document speaks as of the date of this news
 release and may be superseded by subsequent events.
 
 

SOURCE Cleveland-Cliffs Inc

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