Cleveland-Cliffs has acquired United Mining’s 30% interest in United Taconite (UTAC), an iron ore mining and pelletising operation located in Eveleth, Minnesotta, USA. Cliffs previously owned a 70% interest in the joint venture and after completing the purchase now has 100% ownership. As a result of this transaction, as well as the recently announced expansion project at the company’s Michigan mines, Cliffs’ total North American iron ore equity pellet production will increase to 21 Mt in 2008 and some 22 Mt in 2009.

Consideration for the United acquisition will be a mix of cash, stock and iron ore pellets. The total includes $100 million in cash and 1,529,619 Cleveland-Cliffs common shares. In addition, the transaction includes a provision to supply 1.1 Mt of iron ore pellets over the next five quarters at no cost.

Joseph Carrabba, Cliffs’ Chairman, President and Chief Executive Officer, commented: “Strategically, the consolidation of the UTAC minority interest strengthens our core North American Iron Ore business, and together with our Northshore property, gives Cliffs two wholly-owned iron ore assets in North America. Moreover, as Cliffs currently manages the operation, there is no integration risk associated with the transaction.”
 
The acquisition does not require regulatory approval and has an effective close date of June 30, 2008. United Taconite is expected to produce 4.7 Mt in 2008 and at December 31, 2007 had proven reserves of over 120 Mt.