Cliffs Natural Resources Inc announced that the Company Board of Directors has approved a plan to seek a potential sale and to idle operations at its renewaFUEL biomass production facility in Michigan. Cliffs indicated that the financial impact of the decision is estimated to be an approximately USD 30 million primarily non-cash, pretax charge in the third quarter of 2011.
The facility located at the Telkite Technology Park near Sawyer International Airport in Marquette, Mich was constructed to produce high-energy, low-emission biofuel cubes from sustainably collected wood and agricultural feed stocks. Since initial production the plant has not performed to design capacity nor at a production level that justify continued operation.
The renewaFUEL plant currently employs approximately 30 fulltime individuals. Cliffs will make every effort to reassign these employees, where possible to other positions within the Company.
Mr David Blake Cliffs senior vice president, North American Iron Ore and the Cliffs executive with operational responsibility for renewaFUEL said “Over recent years Cliffs executed a strategy focused on expanding its portfolio of steelmaking raw material assets. Cliffs continues to successfully grow its core iron mining business with a number of expansion projects underway. With this, it is essential that our management focus and allocation of capital resources be deployed where we can have the most impact for all stakeholders.”
Cliffs acquired renewaFUEL in 2007 and previously operated a pilot plant in Battle Creek, Mich. Construction was completed on the Sawyer facility in early 2011 and the plant went through its commissioning phase during the first half of 2011. The plant delivered its first commercial supply of biofuel cubes to the Marquette Board of Light and Power in mid July.
In making the announcement, the Company recognizes the strong working relationship renewaFUEL has had with the Marquette Board of Light and Power, federal, state and county officials and others who have been supportive in getting the renewaFUEL facility sited and constructed. It is important to note that no public funds were used in construction or operation of the renewaFUEL facility.
Mr Blake added that “While we believe the renewaFUEL business model remains viable, the business is likely to have better prospects with a company more experienced in the area of biofuels that can develop renewaFUEL to its full potential.”
