The company said it had halted underground operations at the mine and was working on a remediation plan with the US Mine Safety and Health Administration, which included the flooding of the impacted section.

Cliffs has also issued force majeure notices to its affected customers.

“While there is not absolute certainty the remediation plan will lower reading levels to a point that allows production to resume, it is anticipated that the planned actions will produce the desired results,” the producer said, adding that, based on the current remediation plan, it expected Pinnacle would resume production on or about July 1.

Cliffs also said that it expected that its Oak Grove operation in Alabama, which received overland conveyor and preparation plant damage in a severe storm, should once again produce salable coal during the latter part of the fourth quarter.

“At this time, underground operations are fully functional and the company is stockpiling raw coal in anticipation of completing the repair and refurbishment work at the preparation plant over the next five to seven months,” officials noted.

An expected insurance settlement related to the severe weather should cover the capital needed for the preparation plant repairs.

As a result of the issues at Pinnacle and Oak Grove, Cliffs has cut its whole-year guidance for the North American coal business from 6.5 million tons in sales to approximately 5.1Mt. Revenue per ton is anticipated to be $US125-$130.