Cliffs Natural Resources to Settle Securities Lawsuit

Cliffs Natural Resources Inc. on Sunday said it agreed to settle a pending federal securities lawsuit related to the company's former Bloom Lake iron-ore mine in Canada for $84 million.

The Cleveland-based miner said its insurance carriers will pay the full amount of the settlement, which Cliffs said will have no impact on its financial position or operations.

Cliffs said it also agreed to adopt a number of changes to its corporate-governance policies, protocols and practices as part of a settlement of pending shareholder derivative actions related to Bloom Lake.

The lawsuits, filed in 2014 against the company and a number of its former officers and directors, were based on alleged dissemination of false or misleading information by Cliff's previous management and board about Bloom Lake, including the impact of the mine on the company's financial outlook and the sustainability of its dividend. The suits were brought before activist hedge fund Casablanca Capital LP won control of the Cliffs board in July 2014.

Cliffs in 2014 took a $6 billion write-down, mostly related to the purchase of Bloom Lake, which it acquired in 2011 to supply the then-booming Chinese steel market. The miner eliminated its common-stock dividend in January 2015.

Australia's Champion Iron Ltd. late last year agreed to buy the Bloom Lake mine and related rail assets for 10.5 million Canadian dollars ($7.6 million).

Cliffs said the settlement agreements, which contain no admission of liability or wrongdoing and include a full release of all defendants, are still subject to court approval.

Write to Colin M. Kellaher at [e-mail]

(END) Dow Jones Newswires

February 07, 2016 20:15 ET (01:15 GMT)

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