Cliffs to buy Canada's Consolidated Thompson for $4.95 billion
12 Jan 2011
North America's largest producer of iron ore pellets used in steelmaking, Cliffs Natural Resources, yesterday said that it will buy Canada's Consolidated Thompson Iron Mines for C$4.9 billion ($4.95 billion) in cash, in order to meet the booming demand for the ore in Asia.
In its largest acquisition to date, Cleveland-based Cliffs will pay C$17.25, or $17.43, per share, a premium of 30 per cent to Consolidated's closing share price on10 January.
Cliffs expects the transaction to be completed in the second quarter.
Based in Montreal, Canada, Consolidated, which is 19 per cent owned by China's Wuhan Iron & Steel Co, has iron ore mining properties in the well-known Labrador Trough that spans North-Eastern Québec and Western Newfoundland and Labrador.
It controls approximately 580 million metric tons of proven and probable iron ore reserves at an average grade of 30 per cent. In addition, it has over a billion metric tons of measured and indicated resources, with potential additional resources that could be proven after a near-mine drilling program.
Consolidated manages and operates Bloom Lake, an open-pit iron ore mine, and two adjacent development properties, Lamelee and Peppler Lake that are expected to produce 16 million metric tons annually by 2012 after expansion.