The Cleveland-based miner's (NYSE:CLF) subsidiaries, which filed for creditor protection in January, are seeking a Quebec court's permission to solicit interest next month in the Bloom Lake mine, the Wabush Mine, and related port and rail assets in Quebec and Labrador, according to a motion filed by monitor FTI Consulting Canada.
Bloom Lake General Partner Ltd. and affiliates such as Cliffs Quebec Iron Mining filed for protection under the Companies' Creditors Arrangement Act amid falling iron ore prices.
Excluded from the sale process are Cliffs' chromite assets in Ontario's Ring of Fire that are in the process of being sold to Noront Resources (TSXV:NOT) for US$20 million.
Parties interested in the assets would be required to submit non-binding letters of intent by May 19. Qualified parties would be invited to submit formal bids by an unspecified date, followed by a possible auction.
The assets being sold include businesses related to the Bloom Lake mine, Wabush Iron Co. Ltd., Wabush Resources Inc., Arnaud Railway Company, the Wabush Lake Railway Company Ltd., and port facilities in Pointe-Noire, Que.
Cliffs has said the court process would buy the owners time to explore restructuring and sale options.
It may also protect the company from the US$700 million of closure costs, mainly from three years of obligation to the Quebec North Shore and Labrador Railroad owned by a Rio Tinto subsidiary, Iron Ore Company of Canada.
Cliffs acquired majority ownership of Bloom Lake — a mine in the iron-rich Labrador Trough that began production in 2010 — as part of its takeover of Consolidated Thompson Iron Mines Ltd. in a $4.9-billion deal that closed in 2011.
It had produced more than six million tonnes of ore annually.Suggest a correction