PinnOak’s Pinnacle mine in southern West Virginia boasts the only longwall plow system in the US.
PinnOak is expected to contribute 2Mt of production by year’s end and 5Mt in 2008, adding $130 million to Cleveland’s 2007 revenues and $400 million next year.
“The acquisition of PinnOak is the latest in a series of transactions designed to further Cliffs’ position as an international mining entity,” said chairman Joseph Carrabba, noting that about 80% of PinnOak’s 2007 sales will be going to international customers.
“PinnOak’s operations are running substantially below their rated capacity of more than 7 million tons per annum. Our goal is to forge sales agreements with new and existing customers for PinnOak’s premium product and to increase production accordingly.”
The transaction, initially announced in June, was inked for $450 million in cash and about $160 million in assumed debt.
The Federal Trade Commission gave the go-ahead to the purchase last month.
