BUSINESS

Cliffs Natural Resources sued by Bank of Nova Scotia for breaching debt terms

03/19/2015 12:31 EDT | Updated 05/19/2015 05:59 EDT
TORONTO - Cliffs Natural Resources Inc. (NYSE:CLF) says it has been sued by the Bank of Nova Scotia (TSX:BNS) for more than US$52.6 million over allegations that the iron ore producer didn't meet some of its debt terms.

The company says in a regulatory filing that the debt obligations in question relate to equipment loans at its Bloom Lake mine in Quebec.

The Cleveland-based company filed for creditor protection for its Bloom Lake mine back in January, saying the project no longer generates revenues and can't meet its financial obligations.

Cliffs recently suspended operations at the mine — owned by Bloom Lake General Partner Ltd., in which Cliffs has a controlling stake — amid falling iron ore prices.

In its defence, the company says it is current on all of its payment obligations under the equipment loans agreement.

Cliffs acquired a majority stake in the Bloom Lake mine when it took over Consolidated Thompson Iron Mines Ltd. for $4.9-billion in 2011. The mine once produced more than six million tonnes of ore a year.