US-based mining company Cleveland-Cliffs has agreed to sell substantially all of the assets of its Asia Pacific iron ore business to Australian mining services company Mineral Resources.

As a result of the transaction, Cliffs’ previously disclosed costs of closing the Australian operations are expected to be reduced by approximately $65-75 million based on Mineral Resources assuming certain obligations and Cliffs reaching negotiated settlements with other third parties.

The transaction is supported by the Western Australian government.

Cliffs chairman, president and CEO Lourenco Goncalves said: “The sale of these assets to Mineral Resources marks Cliffs’ exit from the Australian iron ore business, and represents the final step in the implementation of our US iron ore-centric strategy.

“We are pleased to have reached agreement on a transaction that not only brings real value to Cliffs shareholders, but also represents the potential for continued job opportunities for employees in Western Australia who would be impacted by the pending closure of the Koolyanobbing complex.”

Goncalves added: “I commend the Cliffs’ Australian team for an outstanding job achieving great safety, production and quality results over the years and also maintaining a positive attitude and accomplishing our operating objectives the last few years in spite of the many headwinds the direct-ship iron ore industry has faced during this period.”

The transaction is expected to close before the end of the second quarter of 2018, subject to certain conditions precedent being achieved.

Cliffs stated that the deal is structured as a sale of the following assets and assumption of certain related liabilities: mining tenements, mine facility assets, port assets and the benefit of certain contracts.

Source: Company Press Release.