CLEVELAND, Sept. 27, 2011 /PRNewswire/ -- Cliffs Natural Resources Inc. (NYSE : CLF ) (Paris: CLF) announced today that the Company’s Board of Directors has approved a plan to seek a potential sale and to idle operations at its renewaFUEL biomass production facility in Michigan. Cliffs indicated that the financial impact of the decision is estimated to be an approximately $30 million primarily non-cash, pretax charge in the third quarter of 2011.
The facility, located at the Telkite Technology Park near Sawyer International Airport in Marquette, Mich., was constructed to produce high-energy, low-emission biofuel cubes from sustainably collected wood and agricultural feed stocks. Since initial production the plant has not performed to design capacity, nor at a production level that justifies continued operation.
The renewaFUEL plant currently employs approximately 30 fulltime individuals. Cliffs will make every effort to reassign these employees, where possible, to other positions within the Company.
David Blake, Cliffs’ senior vice president, North American Iron Ore and the Cliffs executive with operational responsibility for renewaFUEL, said, “Over recent years Cliffs executed a strategy focused on expanding its portfolio of steelmaking raw material assets. Cliffs continues to successfully grow its core iron mining business with a number of expansion projects underway. With this, it is essential that our management focus and allocation of capital resources be deployed where we can have the most impact for all stakeholders.”
Cliffs acquired renewaFUEL in 2007 and previously operated a pilot plant in Battle Creek, Mich. Construction was completed on the Sawyer facility in early 2011 and the plant went through its commissioning phase during the first half of 2011. The plant delivered its first commercial supply of biofuel cubes to the Marquette Board of Light and Power in mid-July.
In making the announcement, the Company recognizes the strong working relationship renewaFUEL has had with the Marquette Board of Light and Power, federal, state and county officials and others who have been supportive in getting the renewaFUEL facility sited and constructed. It is important to note that no public funds were used in construction or operation of the renewaFUEL facility.
Mr. Blake added, “While we believe the renewaFUEL business model remains viable, the business is likely to have better prospects with a company more experienced in the area of biofuels that can develop renewaFUEL to its full potential.”
About Cliffs Natural Resources Inc.
Cliffs Natural Resources Inc. is an international mining and natural resources company. A member of the S&P 500 Index, the 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. Driven by the core values of social, environmental and capital stewardship, Cliffs associates across the globe endeavor to provide all stakeholders operating and financial transparency.
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. In addition, Cliffs has a major chromite project, in the pre-feasibility stage of development, located in Ontario, Canada.
News releases and other information on the Company are available on the Internet at: http://www.cliffsnaturalresources.com
'Safe Harbor' Statement under the Private Securities Litigation Reform Act of 1995
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.
Actual results may differ materially from such statements for a variety of reasons, including: the uncertainty or weakness in global economic and/or market conditions, including any related impact on prices; trends affecting our financial condition, results of operations or future prospects; Cliffs’ ability to achieve the synergies and the strategic and other objectives related to the acquisition of Consolidated Thompson; the outcome of any contractual disputes with our customers or significant suppliers of energy, materials or services; our ability to successfully complete the repair and refurbishment work at the Oak Grove Mine in the expected time frame; the amount, and timing of, any insurance recovery proceeds with respect to the Oak Grove Mine; our ability to successfully remediate carbon monoxide levels at the Pinnacle Mine; the outcome of any arbitration or litigation; changes in the sales volumes or mix; the impact of price-adjustment factors on our sales contracts; availability of capital equipment and component parts; the failure of plant, equipment or processes to operate as anticipated; the ability of our customers to meet their obligations to us on a timely basis or at all; events or circumstances that could impair or adversely impact the viability of a mine and the carrying value of associated assets; the business of the acquired companies not being integrated successfully or such integration proving more difficult, time consuming or costly than expected, including the integration of Cliffs Quebec Iron Mining; our ability to obtain any permits, approvals, modifications or other authorization of, or from, any governmental or regulatory entity; the ability to achieve planned production rates or levels; our actual economic ore reserves; reductions in current resource estimates; impacts of increasing governmental regulation including failure to receive or maintain required environmental permits; the ability to maintain adequate liquidity and successfully implement our financing plans; and problems or uncertainties with productivity, third party contractors, labor disputes, weather conditions, natural disasters, tons mined, changes in cost factors, the supply or price of energy, transportation, mine closure obligations and employee benefit costs and other risks of the mining industry.
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 our Annual Report and Reports on Form 10-K, Form 10-Q and previous news releases filed with the Securities and Exchange Commission, which are publicly available on Cliffs Natural Resources' website. The information contained in this document speaks as of the date of this news release and may be superseded by subsequent events. Except as may be required by applicable securities laws, we do not undertake any obligation to revise or update any forward-looking statements contained in this press release.
SOURCE Cliffs Natural Resources Inc.