COLUMBUS, Ohio (AP) -- The buying spree by Cleveland-Cliffs continued Wednesday with a nearly $10 billion acquisition of Alpha Natural Resources, broadening the one-time Midwest company's international reach as well as its exposure to a global steel industry clamoring to fuel its mills.

Its biggest acquisition to date, the cash-and stock deal will create a company with the largest reserves of iron ore and metallurgical coal in the U.S.

The company will be named Cliffs Natural Resources, and own nine iron ore facilities and more than 60 coal mines in North and South America and Australia.

A global consolidation of the commodities industry has begun to accelerate. The Cleveland-Cliffs deal comes on the heels of major acquisitions by Luxembourg-based ArcelorMittal, the world's largest steelmaker, and Korean steel giant Posco.

Cleveland-Cliffs Chief Executive Joseph Carrabba said the deal shows that U.S. steel is still robust compared with growing international steelmakers.

"It was an old line industry written off as dead that has emerged and been spectacularly successful," Carrabba said.

The boards of both Cleveland-based Cleveland-Cliffs and Abingdon, Va.-based Alpha Natural Resources Inc. approved the deal, in which Alpha shareholders will receive 0.95 Cleveland-Cliffs shares ($105.89 based on the stock's Tuesday closing price) and $22.23 in cash for each share held.

Cleveland-Cliffs shares tumbled nearly 7 percent, or $7.44, to $104.02. The stock, however, is still nearly four times above its 52-week low of $28.20. Alpha's stock's jumped 10.5 percent, or $10.01, to $104.93. Its 52-week low is $15.92.

Based on Cleveland-Cliff's closing price Tuesday, Alpha shareholders will receive $128.12 per share, a 35 percent premium to Alpha's Tuesday close of $94.92. Based on the company's 70.3 million outstanding shares at April 23, the deal is valued at $9.01 billion. In a statement, the companies valued the transaction at $10 billion.

Cleveland-Cliffs will pay $1.7 billion in cash and issue 71 million new shares of common stock to finance the deal, it said. JPMorgan Chase Bank is providing an underwriting commitment for up to $1.9 billion in financing. After the deal closes, Alpha stockholders will own about 40 percent of the combined company, and Cleveland-Cliffs shareholders will own 60 percent.

"Together, Alpha and Cleveland-Cliffs will have the size, the management depth and the mining expertise to compete on the global stage as demand for raw materials continues to increase around the world," Alpha Chairman and Chief Executive Michael Quillen said in a statement

Cleveland-Cliffs acquired metallurgical coal producer PinnOak Resources last year and acquired a 30 percent ownership stake in Brazilian iron ore project Amapa Mine in 2006. It expanded into Australia when it bought iron ore miner Portman Ltd. in 2004.

Those deals, however, pale in comparison to Wednesday's catch.

"We knew they were looking to buy," said Tony Robson of BMO Capital Markets in Toronto, who was looking for deal more in the range of $500 million.

"If they really want to grow the company, they've got to get into more places and more minerals," said steel analyst Charles Bradford of Bradford Research/Soleil Securities.

Carrabba will be CEO of the new company, and Quillen will become non-executive vice chairman.

The transaction is expected to close by the end of the year, subject to shareholder and regulatory approvals. It will add to Cleveland-Cliffs' earnings estimates starting in 2009.

Analysts and executives of both companies do not expect any antitrust issues given the number of companies in the mining industry.

The combined company will have 8,900 workers and expected 2009 revenue of $10 billion, as demand from the steel industry grows. Cliffs Natural Resources would have a reserve base of about 1 billion tons of iron ore and 1 billion tons of metallurgical and steam coal.

The company expects annual sales volume of more than 30 million tons of iron ore and nearly 18 million tons of metallurgical coal, making it one of the largest suppliers to the world's steel industry. It also expects to ship 17 million tons of steam coal, used by utilities to generate electricity.

The price of the U.S. coal used to make the coke that fuels the blast furnaces can go for as much as $250 a ton. Just last year, the cost was closer to $90.

Steelmakers already face pressure from customers -- manufacturers that make everything from automobiles and aircraft to washing machines and refrigerators. Steel producers are doing everything they can to control soaring prices for iron ore, metallurgical coal and scrap steel.

The iron ore business will operate from Cleveland and the coal business from Abingdon, Va.