Cliffs Natural Resources Inc. (CLF), the largest U.S. iron-ore producer, sought creditor protection in Canada for its Bloom Lake operations in Quebec after being unable to find a buyer.
Bloom Lake General Partner Ltd. and certain affiliates started restructuring proceedings in Montreal under Canada’s Companies’ Creditors Arrangement Act, Cliffs said in a statement on Tuesday.
Cliffs has suspended production at Bloom Lake amid a slump in iron-ore prices and for several months has been looking at options to sell some of its Canadian assets.
A bankruptcy filing for Bloom Lake may limit the cost of closing the operation, which Cliffs estimated in November would be as much as $700 million. The Cleveland-based company purchased Bloom Lake as part of a $4.3 billion takeover of Consolidated Thompson Iron Mines Ltd. in 2011.
Cliffs shares jumped as much as 10 percent after they resumed trading following the announcement. They later pared most of those gains and were up 0.1 percent at $7.23 at 1:51 p.m. in New York. The stock is down 63 percent over the past 12 months.
Bloom Lake attracted interest from several potential acquirers including multinational mining companies and investment funds, the investment arm of the Quebec government said earlier this month.
To contact the reporter on this story: Tim Loh in New York at tloh16@bloomberg.net
To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net Tina Davis
https://www.bloomberg.com/news/2015-01-27/cliffs-seeks-creditor-protection-for-quebec-iron-ore-mine.html