Cliffs Natural Resources is selling off coal assets in West Virginia as the mining company continues to shift more toward a pure, iron ore supplier. Cliffs will take a pre-tax loss of $375 million to $425 million on the sale in the four quarter. It will use proceeds from the $175 million sale to Coronado Coal II LLC to pay down debt.
"This transaction is another important step in executing our strategy to transform Cliffs into a stronger, pure-play U.S. iron ore supplier," said Chairman and CEO Lourenco Goncalves.
The mining sector is getting hammered by falling commodity prices as the global economy slows, with China standing out. Cliffs said in October that it would take a charge of about $6 billion to write down the value of its seaborne iron ore and coal assets. It had bought aggressively into mining operations in Canada before commodity sales began to weaken noticeably.
Shares of Cliffs Natural Resources Inc., based in Cleveland, have fallen almost 70 percent over the past year.
The assets being sold are located in Logan County, about 70 miles southwest of Charleston. Cliffs said it will continue to shop around its remaining coal assets, including the Pinnacle mine in West Virginia and the Oak Grove mine in Alabama, but that the sale announced Wednesday will not affect them.
The deal is targeted to close by the end of the year. Shares rose almost 2 percent before the opening bell.