VANCOUVER (miningweekly.com) – US iron-ore producer Cleveland-Cliffs has launched two debt offerings totalling $716-million to help fund its first hot briquetted iron (HBI) production plant – a $700-million expansion to Cliffs’ production capabilities targeting the electric arc furnace steel market.
Based in Cleveland, Ohio, Cleveland-Cliffs intends to offer a $400-million principal amount of senior secured notes due 2024 in an offering exempt from the registration requirements of the US Securities Act of 1933.
The notes will be guaranteed by Cleveland-Cliffs’ domestic subsidiaries.
The company also announced that it intends to offer to sell $275-million principal amount of convertible senior notes due 2025, or up to $316.25-million principal amount of convertible notes if the underwriters exercise their over-allotment option in full, in a registered public offering under the Securities Act.
Cleveland-Cliffs has chosen Toledo, Ohio as the site for the development. The NYSE-listed company expects to break ground for the construction of the HBI production plant in early 2018, with commercial production to follow in mid-2020.
The company has appointed Midrex Technologies to design, engineer and procure equipment for the new plant, which will have the nominal capacity to produce 1.6-million tons of HBI a year.
Cleveland-Cliffs’ NYSE-listed stock fell more than 6% following the news release, in after-market trading, changing hands at $6.34 a share.