Sold: Cleveland Cliffs sale of Australia assets

New Cliffs Natural Resources logo. Scanned from e-mail October 10, 2008. CB.

ISHPEMING — In its attempt to consolidate its operations to North America, Cleveland-Cliffs Inc. announced Tuesday that it has closed the sale of its Asia Pacific Iron Ore assets to Mineral Resources Limited.

With the transaction, Cliffs’ previously disclosed costs of closing the Australian operations were reduced by about $85 million. Included in this amount are asset retirement obligations assumed by Mineral Resources, according to Cliffs’ statement.

Cliffs’ Chairman, President and Chief Executive Officer Lourenco Goncalves said closing the sale of the company’s Australian assets allows the company to return to its roots “as a supplier of high-grade iron units in the Great Lakes steel industry.”

“I must again thank our APIO team for their crucial role and contribution to our successful turnaround over the last four years,” Goncalves said. “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.”

As a result of the transaction, in the third quarter Cliffs will be recording a reversal of its currency translation adjustment, the release states, which will result in a positive contribution to net income of roughly $230 million, or income of about 75 cents per diluted share.