Cleveland-Cliffs Finishes $133M Acquisition of Brazil Company, Stake in Iron Ore Mineadmin
Cleveland-Cliffs Inc., which makes iron ore pellets used to produce steel, said Monday it has completed the purchase of a Brazil-based company for $133 million in cash and gained a 30 percent stake in an ore-rich mine.
The company purchased 100 percent of the shares of Centennial Asset Mining Fund LLC, which is an affiliate of MMX Mineracao e Metalicos SA. Through the transaction, Cleveland-Cliffs acquired the stake in the Amapa Project.
About $350 million of additional capital is needed for the project to become fully operational, which includes $250 million of debt financing, Cleveland-Cliffs said.
Cleveland-Cliffs will be responsible for its 30 percent pro-rata share of capital and provide technical and administrative services.
The money will be used to buy mining equipment, build an ore plant and update rail and port infrastructure to support the project.
The project is expected to have annual production capacity of about 6.5 million tonnes of iron ore concentrate, which is expected to be sold to Gulf Industrial Investment Co., owner and operator of an iron oxide plant in Bahrain.
Production is expected to begin late this year.
Shares of Cleveland-Cliffs fell 30 cents to close at $53.44 on the New York Stock Exchange.
Source: AP via Yahoo! News