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Cleveland-Cliffs to acquire ArcelorMittal USA

Updated: September 28, 2020 06:08 PM

Cleveland-Cliffs announced overnight that they are going to acquire ArcelorMittal USA for $1.4 billion dollars.

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This will make the company the largest iron ore pellet producer in North America, with 28 million long tons of annual capacity, according to Cliffs. And they will be the largest flat-rolled steel producer in North America.

Cliffs already owns and operates Northshore Mining and United Taconite, and is a partial owner with ArcelorMittal of Hibbing Taconite. After the deal, they will also own and operate Minorca Mine. That will mean they control four of the six mines on the Range.  U.S. Steel is a partial owner of Hibtac, but ArcelorMittal is the managing owner.

The CEO of Cliffs, Lourenco Goncalves, will lead the expanded organization. In a statement, he said, "ArcelorMittal is a world class organization that we have long admired as our customer and our partner, and we know for a fact that they have taken good care of their U.S. assets. We look forward to welcoming the ArcelorMittal USA team into our organization."

On a conference call on Monday morning, Goncalves said he's proud to grow the long-standing mining and pelletizing business in Minnesota, saying that Cliffs pioneered the pelletizing process two generations ago. He also reminded the listeners that Cliffs managed Hibtac for over 40 years.

Local 2705 represents Hibtac steelworkers. President Chris Johnson shared, "We really liked when we were under Cliffs. We liked the way they run things. I know our members are happy. We're hoping with him doing this now, it will make some moves for our life of mine, which is our bigger worry over here."

According to Cliffs, the transaction has been approved by the board of directors for both companies and is expected to close in the 4th quarter of this year.

Representative Julie Sanstede sent a statement on Monday:

“I offer my congratulations to Cliffs for a transaction that will not only strengthen the domestic steel industry as a whole, but will extend the functioning life of HibTac. While I’m still learning about the details, this sounds like a ‘win-win,’ with both companies being strengthened. More importantly, I feel this move will preserve jobs on the Iron Range at a time when every single one of them is desperately needed, and could go a long way toward reaching our shared goals to bolster American made products and manufacturing. This is exciting news, and I offer my best to all parties involved to make this transaction a success for our region and help us rebound from the severe economic hardship we’re experiencing.”

Cliffs still controls valuable ore near Nashwauk. In the past, Goncalves has said he wants to secure more ore for Hibtac.

Union leaders out of Minorca said there are still some unknowns, but they remain optimistic.

It's been a big year for Cliffs. They acquired AK Steel, and are nearing completion on the HBI facility in Toledo. DR grade pellets made at Northshore Mining will feed that plant.

Copyright 2020 WDIO-TV LLC, a Hubbard Broadcasting Company. All rights reserved

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