Cliffs Asia Pacific Iron Ore, a subsidiary of Cliffs Natural Resources Inc. (CLF), along with Cockatoo Mining, and HWE Cockatoo, a joint venture partner of Cliffs, recently signed a legally binding term sheet with Pluton Resources Limited (PLV). As per the term sheet, Pluton will acquire its interest in the Cockatoo Island mining tenements and certain infrastructure assets of Cockatoo Island joint venture.
The deal is expected to close by late 2012, when the third stage of mining operations on Cockatoo Island gets over and is subject to regulatory and third party approval. Pluton management believes that this acquisition will transform the company into a major iron ore producer.
The consideration payable for the potential acquisition and the available iron ore tonnage as well as the expected environmental rehabilitation costs will be calculated and advised after the completion of due diligence, scheduled to begin shortly.
Cliffs Natural Resources Inc. – formerly Cleveland-Cliffs Inc. – is the largest producer of iron ore pellets and a major supplier of metallurgical coal in North America with shares of 45% and 30%, respectively. The company operates six iron ore mines in Michigan, Minnesota and Eastern Canada as well as three coking coal mines in West Virginia and Alabama.
The three reportable segments of Cliffs are North American Iron Ore, North American Coal and Asia-Pacific Iron Ore. Cliffs' 50% interest in the Cockatoo Island joint venture is currently reported within the company's Asia Pacific Iron Ore business segment.
On the other hand, Pluton Resources, based in Melbourne, Australia primarily engages in the exploration of mineral properties mostly in the domestic regions. It explores for iron, copper, gold, and silver ores. The company holds a 100% interest in the property located in Irvine Island, Western Australia. It also holds a 100% interest in Dove River exploration license and a 60% equity stake in the Cethana tenement located in Tasmania.
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