With less than three weeks until shipping and rail out of Esperance was due to cease, Cleveland-Cliffs have announced the sale of their Koolyanobbing mining operation to Mineral Resources Limited.
The acquisition is set to safeguard more than 400 regional jobs, including 120 employees at Esperance Port.
In a statement released on Tuesday evening, June 12, Cliffs confirmed an agreement had been reached with the Australian mining company and supported by the state government.
Cliffs’ chief executive officer Lourenco Goncalves said the company were pleased to have reached agreement on the transaction.
“Not only does this bring real value to Cliffs’ shareholders, but it 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,” he said.
“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.”
Premier Mark McGowan said the state government had been working closely with Mineral Resources Limited to ensure the successful acquisition of the operation and that economic activity continued in the region.
“Creating jobs across regional WA is a big priority of my government, and this transaction will ensure that employment opportunities remain in the region,” he said.
“The purchase of the Koolyanobbing operation by Mineral Resources Limited is a major vote of confidence in the Goldfields-Esperance region and is another positive sign that Western Australia’s economy is continuing to bounce back.”
Mineral Resources Managing director Chris Ellison thanked Cliffs, their local management team and their advisers for working tirelessly to successfully conclude the transaction.
“Our combined efforts have culminated in a transaction that delivers a win-win outcome for all parties involved,” he said.
“Mineral Resources will continue sending tonnes down the rail to Esperance and, by doing so, continue to provide jobs for hundreds of West Australians for the next five to six years.
“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.”
According to Mr Goncalves, the transaction is set to close before the end of the second quarter of 2018, subject to conditions.
Cliffs have stated the deal was structured as a sale of assets and assumption of liabilities, including mining tenements, mine facility assets, port assets and the benefit of certain contracts.
Southern Ports acting chief executive officer Alan Byers said he was pleased the agreement had been reached and looked forward to working through the details of the deal.
“Southern Ports has collaborated with the state government throughout negotiations by providing a great deal of information to guide the process,” he said.
“I will travel to Perth as soon as possible to meet with the state government and Mineral Resources to work through the likely impact on Esperance Port.
“Southern Ports will continue to communicate with our workforce on the transition from Cliffs to Mineral Resources Limited as information becomes available.”
An Aurizon spokesperson said the company noted the announcement and were assessing possible opportunities to support the continued operations of the Koolyanobbing mine.