TORONTO (miningweekly.com) – US iron-ore and coal producer Cliffs Natural Resources has suspended its quarterly dividend as part of accelerated plans to repay its outstanding debt balance.

Cleveland, Ohio-based Cliffs on Monday said it had already reduced its outstanding debt balance by more than $400-million during the quarter ended December 31 and January.

The accelerated debt reduction was achieved by repaying short-term debt as well as by repurchasing more than $200-million in senior notes in the open market at an average discount of 34% to par, capturing a discount of about $70-million.

Cliffs used cash generated from operations during the fourth quarter and net proceeds from the sale of Cliffs Logan County Coal to repay the debt.

The miner, which had last year announced plans to shutter its Eastern Canada iron-ore operations and in December sold a West Virginia coal operation for $174-million, explained that by scrapping the dividend the company would free up $92-million a year that it would redirect to pay off more debt.

As at September 30, Cliffs had about $3.25-billion in debt on its balance sheet. The company in October booked a $5.7-billion write-down of its iron-ore and coal assets as coal and iron-ore prices collapsed owing to a supply glut from Australia and tardy demand from a slower-growing China.

Cliffs came under new management in July last year, following activist shareholder Casablanca Capital’s victory in a proxy contest.

Chairperson, president and CEO Laurenco Goncalves last year announced that the Bloom Lake operation would be shut down or sold, and the company wrote down $4.5-billion related to the Bloom Lake iron-ore project.

“We see accelerated debt reduction as a more effective means of protecting our shareholders than continuing to pay a common share dividend,” Goncalves said Monday.

Despite hitting an intraday high of $7.93 a share, Cliffs’ NYSE-listed stock on Monday fell 3.6% to $7.22 apiece.