Cliffs wraps up INR Energy deal

CLIFFS Natural Resources has closed its $US757 million acquisition of the met and thermal coal operations of INR Energy.
Cliffs wraps up INR Energy deal Cliffs wraps up INR Energy deal Cliffs wraps up INR Energy deal Cliffs wraps up INR Energy deal Cliffs wraps up INR Energy deal

Cliffs’ Oak Grove mine. Courtesy Cliffs Natural Resources.

Donna Schmidt

The deal, which was announced early last month, included the Powellton and Chilton-Dingess underground metallurgical coal mines, the Toney Fork No. 2 surface operation and several development mines.

Part of the transaction was a coal preparation and processing plant as well as a new 110-car unit-train batch-weight loadout facility with CSX railroad access.

“This acquisition is expected to incrementally add approximately 68 million tons of metallurgical coal reserves and 51 million tons of thermal coal reserves to Cliffs' current reserve base,” Cliffs said.

“In addition, the transaction will increase Cliffs' global coal production capacity to over 9 million tons in 2011 and 11 million tons in 2012.”

The producer confirmed its original statement that the costs of the deal would be financed via its available liquidity, including cash on hand and a $600 million credit facility.

Future results from the INR operations will be reported as part of Cliff’s North American Coal business segment.

The producer said in July that the INR reserve base would increase Cliffs' total global reserve base to more than 175Mt of metallurgical coal and more than 57Mt of thermal coal.

Also, it noted, all of INR’s operating and near-term development mines were fully permitted for life of mine, which equates to approximately one-third of the reserve base.

Under its long-term operating plans, Cliffs does anticipate a need to bring additional newly permitted mines online prior to 2017.

The company indicated that the INR mines expected 2010 production would be divided equally between metallurgical and thermal coal products.

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