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July 10, 2012 /PRNewswire/ -- Cliffs Natural Resources Inc. (NYSE: CLF) (Paris: CLF) announced today that its wholly owned subsidiary, Cliffs Australia Coal Pty Ltd, has entered into a definitive share and asset sale agreement to sell its 45% economic interest in the Sonoma joint venture coal mine located in
Queensland, Australia to QCoal Sonoma Pty Ltd (QCoal). The assets to be sold include Cliffs' interests in the Sonoma mine along with its ownership of the affiliated wash plant. Upon completion of the transaction, Cliffs expects to collect approximately AUD$141 million in cash proceeds. The Company anticipates the transaction to close during the fourth quarter of 2012.
In addition to QCoal, the Sonoma joint venture is comprised of three other participants: JS Sonoma Pty Ltd, CSC Sonoma Pty Ltd and Watami (Qld) Pty Ltd. Subject to terms of the existing joint venture agreement, each participant has the right to acquire their pro rata share of Cliffs' interest in the Sonoma joint venture on the terms and conditions of the sale agreement under which QCoal has made its offer to acquire. The participants have 60 days from the date the notice is given to accept the offer. To the extent that the other participants do not exercise their right to acquire their pro rata share of Cliffs' interest, QCoal will acquire those pro rata interests.
Joseph Carrabba, Cliffs' chairman, president and chief executive officer, said, "Cliffs continues to make capital allocation decisions through a process focused on driving top-quartile Total Shareholder Return for our shareholders. This transaction reinforces our strategy to direct management and capital resources towards long-lived expandable assets where Cliffs has operational control."
Cliffs purchased its 45% economic interest in Sonoma in 2007. On a 100% basis, Sonoma's 2011 production and sales volumes totaled 3.5 million and 3.1 million metric tons of coal, respectively. The product mix was approximately two-thirds thermal coal and one-third metallurgical coal. The existing mine manager, Sonoma Mine Management, will continue to be responsible for overseeing the operation with no disruptions.