CLEVELAND, OH -- A major, $1.4 billion dollar move announced by Cleveland-Cliffs Monday puts the mining company in charge of more iron and steel operations across the U.S. and on the Iron Range.
“This is the first day of a great chapter of the future of Cleveland-Cliffs,” said the company’s Chairman, President and CEO Lourenco Goncalves.
Just months after acquiring AK Steel the company announced another big buy, this time to the tune of $1.4 billion dollars.
“With our acquisition of ArcelorMittal USA announced this morning, Cleveland-Cliffs will complete the second step of this transformation into a fully integrated, high-value steel enterprise and become the largest flat rolled steel producer in the United States and the America’s. We will also be self-sufficient and the largest producer of iron ore pellets,” said Goncalves during a conference call Monday morning.
As part of the deal, Cleveland-Cliffs will acquire two iron ore pelletizing operations, six steel mills, eight finishing facilities and three coal and coke-making operations.
Goncalves said this move sets the company up to be completely self- sufficient in the steel making process.
“Encompassing all levels of the steel supply chain provides us with a level of operational and commercial flexibility that cannot be replicated. With this broad portfolio we can now fully optimize our participation as an important player in the American market.”
The move will also be felt on a local level. ArcelorMittal owns the Minorca mine in Virginia and Hibbing Taconite, which was operated by Cliffs for more than 40 years until ArcelorMittal took over management last year.
“Cleveland-Cliffs pioneered the pelletizing process in the United States two generations ago,” said Goncalves. “We have a long history and great relationships in the state of Minnesota where both of those mines are located. It brings me great pride to grow our longstanding iron ore and pelletizing business portfolio.”
Cliffs workforce will also be growing significantly with this acquisition as it brings on more than 18,000 ArcelorMittal employees from across the United States.
Goncalves said that will set Cliffs apart when it comes to technical expertise.
“Less than one year ago, this employee population was working for three separate entities - Cleveland-Cliffs, AK Steel and ArcelorMittal, and very soon we will all be growing together in the same direction as Cleveland-Cliffs employees.”
Goncalves said he anticipates the buyout to be complete by the end of 2020.
ArcelorMittal’s leadership also put out a statement Monday. The company's CEO, Lakshmi Mittal, said this is also a good move for them.
“This transaction is a unique opportunity for ArcelorMittal to unlock significant value for shareholders while retaining exposure to the North American economy through our high-quality NAFTA assets alongside a participation in what will be a stronger, better integrated, US business."
CBS 3 also heard from Minorca's union president. He told us the union is optimistic about Cleveland-Cliffs taking over ownership and they look forward to learning more in the coming days.