Cliffs Natural Resources sells Sonoma coal mine stake in Australia

11 July 2012 (Last Updated July 11th, 2012 18:30)

Cliffs Natural Resources wholly owned subsidiary Cliffs Australia Coal (CAC) will sell its 45% economic interest in the Sonoma coal mine to QCoal Sonoma for $141m.

Cliffs Natural Resources wholly owned subsidiary Cliffs Australia Coal (CAC) will sell its 45% economic interest in the Sonoma coal mine to QCoal Sonoma for $141m.

Under the terms of the definitive share and asset sale agreement, CAC will sell its interests in the Sonoma mine along with its ownership of the affiliated wash plant.

The asset sale is expected to be complete in the fourth quarter of 2012.

Cliffs Australia Coal chairman, president and CEO Joseph Carrabba said the company is making capital allocation decisions through a process focused on driving top-quartile Total Shareholder Return for its shareholders.

"This transaction reinforces our strategy to direct management and capital resources towards long-lived expandable assets where Cliffs has operational control," said Carrabba.

The Sonoma coal mine located in Queensland, Australia, is a joint venture between three other participants JS Sonoma, CSC Sonoma and Watami.

Under the terms of the existing joint venture agreement, each participant can purchase its pro rata share of Cliffs' interest in the Sonoma joint venture based on the terms of the current sale agreement, under which QCoal has made its new offer.

QCoal will purchase those pro rata interests if the participants do not exercise their right to acquire the share within 60 days.

Sonoma Mine Management will be responsible for overseeing the operation with no disruptions.