CLEVELAND – Cliffs Natural Resources Inc. (NYSE:CLF) has filed for creditor protection for its Bloom Lake mine, whose operations were recently suspended amid fall iron ore prices.
The Cleveland-based company says Bloom Lake General Partner Ltd., in which it has a controlling stake, filed for protection Tuesday under the Companies’ Creditors Arrangement Act. It says the mine is no longer generating revenues and can’t meet its financial obligations.
Cliffs says the court process buys the owners time to explore restructuring and sale options.
It may also protect the company from the US$700 million of closure costs, mainly from three years of obligation to the Quebec North Shore and Labrador Railroad owned by a Rio Tinto subsidiary, Iron Ore Company of Canada.
FTI Consulting Canada has been appointed monitor.
Cliffs acquired majority ownership of Bloom Lake — a mine in Quebec’s Labrador Trough that began production in 2010 — as part of its takeover of Consolidated Thompson Iron Mines Ltd. in a $4.9-billion deal that closed in 2011.
It had produced more than six million tonnes of ore annually.
Cliffs recently said it would eliminate the dividend it pays to shareholders and redirect about US$92 million of cash to reducing debt owed by the iron ore and coal producer.