Cliffs Natural Resources (NYSE: CLF) said April 28 that as of March 31, management has determined that the North American Coal operating segment, consisting of longwall-equipped mines in Alabama (Oak Grove) and southern West Virginia (Pinnacle), met the criteria to be classified as held for sale.
This determination was made in light of North American Coal’s treatment as a non-core, non-strategic asset that the company expects to sell. As such, all current and historical North American Coal operating segment results are included in the company’s financial statements and classified within discontinued operations. This accounting treatment has no impact on the operating plans for the remaining two mines, which the company expects to run at an EBITDA-neutral level until a sale is concluded.
North American Coal sales volume in the first quarter of 2015 was 1.3 million tons, a 15% decrease when compared with 1.6 million tons sold in the first quarter of 2014. The decrease was primarily driven by the divestiture of Cliffs Logan County Coal in southern West Virginia, partially offset by increased sales from Pinnacle due to new customer contracts.
Cash production cost per ton in North American Coal was $60.18, down 25% from $80.02 in the prior year’s first quarter. The decrease was primarily driven by higher volumes from the remaining two mines, as well as reduced staff costs, contractor spending and repairs.
The company said it will no longer be providing detailed outlook for its North American Coal business as a result of its accounting treatment.
Cleveland-based Cliffs Natural Resources is a leading mining and natural resources company in the United States. It is a major supplier of iron ore pellets to the North American steel industry from its mines and pellet plants located in Michigan and Minnesota. Cliffs also operates an iron ore mining complex in Western Australia. Additionally, Cliffs produces low-volatile metallurgical coal in the U.S. from its mines located in Alabama and West Virginia.