Cliffs considering selling 2 mill sites

The chief financial officer (CFO) of Cleveland-Cliffs says the iron mining and steelmaking firm is exploring the sale of properties that currently host two idled steel mills and a downstream finishing facility.

In a late July conference call with securities analysts, Celso Goncalves, the CFO of the Cleveland-based company, said Cliffs was working with banking firm JPMorganChase on “sell-side processes to explore the potential sale of certain non-core operating assets.”

According to the CFO, those assets could include three parcels of land that currently host idled steel mills, in Riverdale, Illinois and in Steelton, Pennsylvania, and a downstream plate finishing facility in and Conshohocken, Pennsylvania.

The Riverdale site hosts an idled blast furnace/basic oxygen furnace (BOF) complex that Cliffs acquired from ArcelorMittal in 2020.

The Steelton site is home to a recycled-content electric arc furnace (EAF) mill that also was acquired from ArcelorMittal. Cliffs announced layoffs and operations cutbacks in both Riverton and Steelton (as well as Conshohocken) earlier this year.

Now, Celso Goncalves says of those three facilities and others in its portfolio, “These selected assets could represent billions of dollars of value, and we will only sell these assets if the sum of the parts valuation unlocks trapped value for Cleveland-Cliffs’ shareholders.”

He continues, “These sites, particularly Riverdale, Steelton and Conshohocken, are all uniquely positioned geographically and have what data center developers are looking for: access to power and water with the infrastructure already in place.”

The CFO says the notion of selling to data center operators is being explored but is not final. “While these properties are idled, if opportunities don't arise that justify restarting, they have good value, and the amount of interest we have received in these properties so far is reflective of this,” he remarks. “If we’re successful in executing any sales, the cash proceeds will go directly to debt reduction.”

The steelmaker has struggled to earn profits in the past year, including having lost about $470 million in the second quarter of this year.

In the same conference call, Cliffs CEO Lourenco Goncalves portrayed the Cleveland-Cliffs purchase of Canada-based Stelco last year as requiring further support from the Canadian government.

“I bought Stelco because I believe in Canada,” the CEO said. “The problem is that apparently the Canadians, particularly the Canadian politicians, they don’t believe in Canada. They believe that Canada needs to be part of Europe. They’re not. They believe that Canada depends on the United States. They don't. So, they need to wake up and stop being lazy in terms of thinking their country as a satellite of Europe and United States.”

Lourenco Goncalves continues, “Then they attract bad things said to them, but it’s their own making. They need to grow a pair and understand that Canada is a very good country with a lot of potential, with a lot of critical minerals, with a lot of things that can make it a powerhouse.”

Regarding Canadian steel market protection, Lourenco Goncalves urged elected officials there not to “lock in the import levels of 2024 that basically killed the Canadian steel industry.”