With a deal set to close next Friday, Mineral Resources is putting the finishing touches on its acquisition of the Koolyanobbing iron ore operation from Cleveland-Cliffs.
The purchase, announced by MinRes in mid-June, is due for completion next Friday (July 27). According to the company, it is now finalizing negotiations with the Western Australia government to enable the sale.
Koolyanobbing is located in the Yilgarn region of Western Australia, and MinRes will receive all Cliffs’ tenements and remaining iron ore. It will also get a fixed plant, equipment and non-process infrastructure items on the tenements.
In addition, MinRes will gain ownership of Cliffs’ fixed infrastructure assets at the Port of Esperance, including a rail car dumper and two large storage sheds.
The remaining iron ore obtained in the acquisition will allow MinRes to extract further value from prior investments in the fixed plant, mobile equipment and rail rolling stock from its Carina iron ore project, also in Yilgarn. The Koolyanobbing operation is immediately adjacent to Carina.
MinRes will use the assets Port of Esperance to start an iron ore export business, which will use larger and more cost-effective cape-size vessels. The company says it has received significant support in facilitating the transaction from both the Western Australia government, and from Arc Infrastructure.
“I particularly wish to acknowledge the efforts of the State Government, the Premier Mark McGowan and his Ministers whose commitment to preserving jobs in Western Australia and getting better results for the Yilgarn has been plainly evident in our dealings with them,” MinRes Managing Director Chris Ellison said in a statement.
“I can confidently say that this transaction, and the many benefits it will create for Western Australia, would simply not have been possible without the cooperation and commitment from Cliffs, the State Government and Arc Infrastructure,” he added.
Cliffs announced in March that it would be winding down the Koolyanobbing operation due to declines in profits from big discounts on its low-grade ore. The operation was set to conclude in June until MinRes purchased the assets, saving hundreds of jobs in Western Australia in the process.
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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.