Cliffs Natural Resources Inc.’s shuttered Bloom Lake iron ore mine in Quebec has attracted interest from several potential acquirers, according to the provincial government’s investment arm.
The interested parties include multinational mining companies and investment funds, said Ryan Dermody, who works as an adviser on natural resources at Investissement Quebec. He declined to identify the would-be buyers and said it’s too early to say when an agreement might be reached.
“There are a few serious contenders who are actively in discussions with Cliffs, and we’re trying to gauge how those negotiations are developing in order for us to best support one of the eventual outcomes,” he said Thursday in a telephone interview from Montreal. “There are a number of alternatives, and one of them would be an acquisition of the assets.”
A Cliffs spokeswoman didn’t immediately respond to a call or e-mail seeking comment. Cliffs (CLF.N 11.94%) jumped 12 percent to $8.72 at the close in New York, the biggest gain since Nov. 21.
Cliffs is rationalizing its operations in the face of a slump in iron ore prices. It announced Jan. 2 the end of production at Bloom Lake, which the Cleveland-based company acquired in 2011 via its $4.2 billion ($3.5 billion U.S.) takeover of Consolidated Thompson Iron Mines Ltd.
COTE-NORD
The mine, located in Quebec’s Cote-Nord region, employed about 600 when operational, according to Investissement Quebec. Cliffs said Jan. 2 only a few people are still working there, carrying out maintenance.
Dermody said the government won’t acquire the Cliffs assets, which also include a rail line and land near the Quebec port of Sept-Iles.
“Bloom Lake is a very important operation for the Cote- Nord, both in terms of employment and the economy,” Dermody said. “The government made the decision to see what we can do in order to support Cliffs” in its decision-making capabilities.
Montreal-based Investissement Quebec provides loans, loan guarantees and equity investments to companies. It had investments of about $2.7 billion as of March 31, including a stake in Quebec miner Stornoway Diamond Corp.
Source: bnn.ca
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