Boston, MA 09/29/2014 (wallstreetpr) – Cliffs Natural Resources Inc (NYSE:CLF)’s Australia mines are drawing bids from various producers, such as Mount Gibson Iron Limited (ASX:MGX) and MFS Intermediate Income Trust (NYSE:MIN)
Rising Speculations
Bloomberg reported in an article that the U.S.-based producer of iron ore has drawn the interest of others in the industry. According to people familiar with the matter, some Australian producers have raised their bids for Cliffs Natural Resources Inc (NYSE:CLF)’s Australian mines. The company’s mines located in Western Australia are expected to be valued at approximately $876 million, equivalent to A$1 billion. However, the sources declined to be identified because of the confidentiality of the case and also mentioned that as of now, no formal talks have been initiated in this regard. In addition, there has been no statement from CLF suggesting that it is seeking to put out the mines for sale.
Assets On Sale
Activist investor Casablanca Capital LP has been under pressurizing Cliffs Natural Resources Inc (NYSE:CLF) to sell-off some of its mines. In August, the company had divested its stake in Zenyatta Ventures Ltd., its Canadian graphite mine. Apart from this, the company is also seeking to sell its majority holding in a Canada-based nickel venture, which is partnered by First Point Minerals Corp.
In July, Casablanca Capital had won over a proxy fight that lasted for six months, and it introduced some of its own names in the Board of Directors list of the company. A month later, Lourenco Goncalves was assigned the position of the Chief Executive Officer of Cliffs Natural Resources Inc (NYSE:CLF). He soon announced that he seeks to sell the company’s foreign mining assets, as well as its coal projects in the U.S.
Prices of iron ore have been declining, falling 42% this year, marking a five-year slump after Australian miners surged low-cost output. The move has spurred a global surplus because of the slow growth rate in China. It is expected that the surplus would further increase three-folds by 2015.
