Cliffs Natural Resources Inc announced that it plans to dissolve its Michigan Iron Nuggets Joint Venture with Kobe Steel.

The joint venture was originally formed in 2007 to explore the viability of constructing a commercial operation to produce a pig iron substitute using Kobe's ITmk3 technology and Cliffs' iron ore assets. This product was anticipated to be marketed as a feedstock to the electric arc furnace and foundry markets. The plant was designed and permitted for construction adjacent to Cliffs' operations in the Upper Peninsula of Michigan.

Cliffs indicated that throughout the life of the venture it had conducted a number of feasibility studies on the possibility of pursuing a commercially viable process, but ultimately concluded that given its strategic priorities to focus on its core business, continued work on the project should be ended.

Mr Joseph Carrabba chairman, president and chief executive officer of Cliffs, said that "We are disappointed that we are not able to move forward with the iron nugget facility, but remain very appreciative of the efforts made by federal, state, county and township officials who worked with Cliffs over several years on this project. We are grateful for their support in the exploration of this potential industrial operation in Michigan."

Cliffs said it had less than 10 employees exclusively working on the joint venture and plans to reassign nearly all to other positions within the Company. In addition, there are no anticipated material financial impacts as a result of the decision.