Cliffs restructures Bloom Lake iron ore mine, seeks creditor protection
Cliffs Natural Resources (NYSE:CLF) has decided to restructure its Canadian Bloom Lake iron ore mine and seek creditor protection for it after it was unable to find a buyer for the Quebec-based operation.
“The decision to seek protection under the CCAA was based on a thorough legal and financial analysis of the options available to the Bloom Lake Group,” Cliffs said in a press release. “The Bloom Lake Group is no longer generating any revenues and is not able to meet its obligations as they come due.”
Cliffs’ move mirrors the path followed by U.S. Steel, which sought creditor protection for its struggling Canadian operations in September.
The Cleveland-based miner's decision aims to fully exit higher-cost operations and focus only on its iron ore business in the U.S. As most of its peers, Cliffs has been struggling as a consequence of tumbling prices for iron ore and metallurgical coal, triggered by a slowdown in the Chinese steel industry.
The iron-ore miner has been refocusing lately as it faces declining commodity prices. On Monday, Cliffs said it had cancelled its dividend to focus on repaying debt.
Previously the company agreed to sell its Logan County Coal assets in West Virginia to Coronado Coal II LLC for $175 million in cash last year, an attempt to pare down its U.S. coal operations to focus on its core iron-ore products.
The company stock was down 3% in afternoon trading Tuesday after the announcement.