Cliffs appoints Goncalves CEO after Casablanca proxy win
Cliffs Natural Resources (NYSE:CLF), the US biggest iron ore miner, has named Lourenco Goncalves as new CEO, choosing a candidate backed by Casablanca Capital activist hedge fund, which won control of the board last week.
Goncalves, 55, succeeds Gary Halverson, who held the top position for only six months. A metallurgical engineer with 30 years experience in mining and metals companies, Goncalves was also named chairman of the board, replacing James Kirsch, who is no longer part of it.
New York-Casablanca, with just a 5.2% stake in Cliffs, has argued that Cliffs executives were unprepared for the drop in iron ore and coal prices, allowing cost overruns. The fund has consequently vowed to sell or spin the miner's international operations. One of the first assets to go is said to be Western Australia’s Koolyanobbing mine, acquired in 2008 through Cliffs’ takeover of Australian-listed Portman.
The mine produces about 11 million tonnes of iron ore a year, making it one of Australia’s largest iron ore mines not owned by heavyweights BHP Billiton (ASX:BHP), Rio Tinto (ASX:RIO) or Fortescue Metals (ASX:FMG).
The move aims to refocus Cliffs on its most profitable business segment, made up by five iron ore mines in Minnesota and Michigan, which have benefited from the resurgence of the Detroit auto industry and increased drilling for natural gas.