Ohio-based Cliffs said the deal, which was made up of cash as well as the assumption of liabilities, is pending regulatory approval and should be completed by the end of the year.
The miner expects to record a loss on the sale of between $375 million and $425 million pre-tax for the fourth quarter. It confirmed it will likely use the transaction’s proceeds to repay debt obligations.
“I am very pleased to be able to sell these assets to Coronado Coal, an experienced West Virginia-based coal operator,” said Cliffs Chairman, President and Chief Executive Officer Lourenco Goncalves. “This transaction is another important step in executing our strategy to transform Cliffs into a stronger, pure-play U.S. iron ore supplier.”
The companies said that opportunities will be available for many current Logan County Coal employees to become part of the Coronado Coal team.
Cliffs’ Oak Grove coal mine in Alabama and Pinnacle coal operation in West Virginia are not impacted by the sale. The producer said that it will continue to explore sale options for its other coal assets.
Deutsche Bank Securities acted as financial advisor and Hahn Loeser & Parks LLP acted as legal advisor to Cliffs Natural Resources on the transaction.