An aerial view of the Tilden Mine pit and facility in National Mine is seen. (Cliffs Michigan Mining Co. photo)

ISHPEMING — Despite a revenue drop last year, Cleveland-Cliffs Inc., officials say they expect 2020 to be a “transformational” year.

During a conference call on Thursday, the company reported a fourth-quarter net income of $63 million, or 23 cents per share, down from a profit of $609.5 million, or $1.98 per share in the final quarter of the previous year.

In a news release, the company noted a boost in 2018 profits was caused by a $461 million release of tax valuation allowance and a one-time gain of $228 million after “historical changes in foreign currency translation.”

The company’s fourth-quarter earnings before interest, taxes, depreciation, and amortization, or EBITDA, was $111 million, as compared to $188 million in the fourth quarter of 2018.

Mining and pelletizing pellet sales volume in the fourth quarter of 2019 was 5.8 million long tons, a 10% decrease when compared to the fourth quarter of 2018, a Thursday release states. The decrease was a result of reduced customer demand, partially offset by inter-company sales to the Toledo, Ohio, HBI plant, officials say.

Cliffs’ CEO Lourenco Goncalves, said the company “finished 2019 on an exciting note” with the $1.1 billion AK Steel acquisition that was announced in December.

“Over the past several weeks we have come away captivated by the untapped potential that clearly exists for AK Steel assets and very impressed by the quality of the people on the ground,” Goncalves said. “The opportunity ahead of us is actually bigger than what we first envisioned. With this transformational acquisition we will become a leading supplier of the most sophisticated carbon and stainless steel products to high-end clients, including engineered parts to the automotive industry as a Tier 1 supplier to several different models of cars, SUVs and trucks,” Goncalves said. “On top of that, we will be totally self-sufficient in pellets and rely only on ourselves to get our iron ore feedstock, while preserving our ability to supply customized pellets to other steel mills, as we have been doing so successfully for a long time. The performance of the new Cleveland-Cliffs will be less subject to the volatility of commodity indices and more reliant on fixed-price contracts, which will provide us with much more predictable free cash flow generation.”

Cliffs plans to close the acquisition of AK Steel in the next several weeks, with a special shareholders meeting on March 10. The closing date could be as soon as March 13, Goncalves said.

AK Steel will retain its branding and corporate identity upon closing, but will become a wholly owned subsidiary of Cliffs, officials said.

Cliffs’ progress in its expansion to the newer and environmentally friendly hot briquetted iron, or HBI, is also a reason for optimism, Goncalves said.

The company has invested nearly $1 billion in the effort with the construction on an HBI plant in Toledo, which is expected to be ready in June.

“In 2019 we also made incredible progress in advancing our Toledo HBI project to an ahead-of-schedule completion. We remain on track to start producing and selling this highly sought-after product to the marketplace in the first half of this year. With both the upcoming completion of the acquisition of AK Steel and the Toledo HBI plant coming online, 2020 will be a transformational year for us, and we can’t wait to deliver on all of the potential Cleveland-Cliffs has in store.”

There was no mention of the Empire Mine, which was indefinitely idled in 2016, during the call.

Lisa Bowers can be reached at 906-228-2500, ext. 242. Her email address is lbowers@miningjournal.net.