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Wednesday, 04 October 2017 12:41

Cleveland-Cliffs buys out U.S. Steel stake in U.P. mining operation

Written by  MiBiz Staff
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Cleveland-Cliffs buys out U.S. Steel stake in U.P. mining operation COURTESY PHOTO

ISHPEMING — Cleveland-based Cleveland-Cliffs Inc. has acquired full control over Tilden Mining Co., an active iron ore mine in Michigan’s Upper Peninsula.

In the deal, Cleveland-Cliffs (NYSE: CLF) agreed to pay $105 million in cash to acquire the remaining 15-percent equity stake held by Pittsburgh, Pa.-based U.S. Steel Corp. (NYSE: X), according to a statement.

The acquisition closed on Sept. 29.

Cleveland-Cliffs now maintains 100-percent ownership of the mine, which employs about 900 people in Ishpeming, located about 15 miles west of Marquette. Tilden mines, concentrates and pelletizes iron ore, as well as maintains a railroad operation in the U.P.

The deal will increase Cleveland-Cliff’s annual sales volume by 1.2 million long tons of pellets and add 55 million long tons of crude ore reserves, according to a statement.  

In a statement, Cleveland-Cliffs Chairman, President and CEO Lourenco Goncalves described the deal to acquire U.S. Steel’s equity stake in Tilden Mining as “a risk free transaction” that will aid the development of a hot briquetted iron (HBI) production facility in Toledo, Ohio.

“With the current strength in the Great Lakes iron ore pellet market and anticipated future demand from our HBI facility, acquiring additional pellet capacity became a top priority for Cliffs,” Goncalves said.

Cleveland-Cliffs, which reported $2.1 billion in sales for the 2016 fiscal year, has managed the Tilden operation since 1974. The company operates mines in Michigan and Minnesota and supplies iron ore to the steel industry in North America.

Other Michigan properties for Cleveland-Cliffs, formerly known as Cliff Natural Resources, include a 73-percent stake in Empire Mine in Palmer, about 15 miles southwest of Marquette. The operation was idled in August 2016. 

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