Cleveland-Cliffs Inc announced that its affiliate, Cliffs and Associates Ltd., jointly owned by a subsidiary of Cleveland-Cliffs Inc and Outokumpu Technology GmbH, a German company, has closed on the sale of CAL's idled Circored Hot Briquette Iron facility located in Trinidad and Tobago to International Steel Group Inc.
The terms of the sale include a purchase price of $8 million plus assumption of liabilities. In addition, CAL may receive up to $10 million in future payments contingent upon production and shipments. The license to the technology will transfer to ISG.
HBI is a scrap substitute that can be used as an iron source in steelmaking operations. The facility has the capacity to produce about 500,000 metric tons of HBI annually. The scrap steel substitute that can be used in both electric arc furnace and traditional blast furnace steelmaking.
The Trinidad and Tobago HBI project began in the mid-1990s as a joint venture among Cleveland Cliffs, Lurgi Metallurgie (now known as Outokumpu Technology GmbH), and LTV Steel. Production began in 2000 but ceased a year later as a result of depressed global scrap iron and HBI prices, changes in the makeup of the joint venture, and other factors. Now that the purchase has been completed, ISG expects to begin HBI production at the facility during the fourth quarter of 2004.
"Consistent with our focus on developing our raw materials capabilities, we are committed to restarting and operating the HBI facility in Trinidad and Tobago as soon as possible," said Rodney B. Mott, ISG's President and Chief Executive Officer. "This facility is strategically located near natural gas reserves, which provide an inexpensive source of energy for the production of HBI."
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