Cliffs Natural (CLF), Anglo American to Exit Amapá Play in Brazil; Sees non-Cash Charge

January 3, 2013 5:23 PM EST
On December 27, 2012, the Board of Directors of Cliffs Natural Resources Inc. (NYSE: CLF) authorized the sale of the Company’s 30 percent interest in the Amapá joint venture ("Amapá") located in Brazil.

Anglo American plc ("Anglo American") currently owns the remaining 70% of Amapá. Both the Company and Anglo American will be selling their respective interests in a 100% sale transaction to a single entity.

Based on the results of the broad auction process and the terms of the pending sale, management of the Company made a determination on December 27, 2012 that the value of its Amapá Interest recorded in the financial records of the Company needs to be adjusted to reflect the fair value of our investment. Accordingly, the Company will record a pretax impairment charge of approximately $380 million to $420 million, all of which is non-cash, in the Company’s financial statements as of December 31, 2012.

The Company does not expect that the sale of the Amapá Interest will result in material future cash expenditures.

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