“The sale of Pinnacle and Oak Grove to Seneca Coal marks Cliffs’ exit from the coal business, and represents another very important step in the implementation of our U.S. iron ore pellet-centric, environmentally compliant strategy,” said Lourenco Goncalves, chairman, president and CEO. “We are pleased to have found a buyer that was able to agree on a transaction that not only brings real value to Cliffs shareholders, but will also preserve jobs for the exceptional people at these two mines.”
The deal is structured as a sale of the equity interests of Cliffs’ remaining coal business, which includes the legal entities of Cliffs North American Coal LLC; Pinnacle Mining Co. LLC; Pinnacle Land Co. LLC; Oak Grove Resources LLC; Oak Grove Land Co. LLC; and Beard Pinnacle LLC.
Seneca is affiliated with West Virginia-based ERP Compliant Fuels LLC (ERP). Seneca plans to produce 4.4 million tons of metallurgical coal in 2016 and employ 811 people in West Virginia and Alabama. ERP is engaged in rebalancing the supply of domestic coal through the purchase, reclamation and retirement of 135 mining permits in five states. ERP is actively marketing the sale of Compliant Fuel, which bundles reforestation carbon credits with coal sales, to reduce the rate of growth in atmospheric carbon dioxide. With the Seneca purchase, ERP will operate three underground longwall mines, producing more than 8 million tons of thermal and metallurgical coal annually.
