Cliffs Natural Resources appoints new chairman, CEO after proxy battle
Cliffs Natural Resources, an iron ore and coal producer with major operations on Minnesota’s Iron Range, announced Thursday that Lourenco Goncalves, a former steel company executive, was named to run the company after hedge fund Casablanca Capital triumphed in a proxy battle for control of the company.
The Cliffs board of directors named Goncalves as chairman, president and chief executive officer, effective immediately.
“I am honored by the opportunity to lead Cliffs into its next chapter, with a keen focus on improving performance and restoring shareholder value,” Goncalves said in a news release. “Cliffs has a unique position of strength in iron ore in the Great Lakes region, many valuable assets in other sectors elsewhere in the US and around the world, and talented employees at all levels of the company. I look forward to working closely with all of my fellow Directors to refocus Cliffs on a new strategic path that builds on those strengths.”
Goncalves was the preferred CEO candidate of Casablanca, the activist investment group that last week succeeded in getting a majority of its nominees appointed to the board. Goncalves, a former CEO of Metals USA Holdings, a manufacturer of steel and other metals.
Analysts said Goncalves could pursue the sale of three of the company’s four operating segments: its Asia-Pacific iron ore business, its eastern Canadian iron ore operations and North American coal unit.
The company likely would keep its U.S. iron ore division, including its operations on the Iron Range. Cliffs also is a major player in Minnesota’s taconite iron ore business and among the largest employers in Northeastern Minnesota. The company owns United Taconite in Eveleth and NorthShore Mining in Silver Bay and Babbitt, and is part-owner and operates Hibbing Taconite. It also owns and operates the Tilden-Empire operations in Michigan’s Upper Peninsula.
In an interview with Reuters in February, Goncalves said he would focus on supplying iron ore to steelmakers in the United States, not selling into the competitive global iron ore market, if he became Cliffs CEO.
New York-Casablanca, which has a 5.2 percent stake in Cliffs, claimed the company was destroying shareholder value. Cliffs shares have fallen about 85 percent in the past three years, at a time when iron ore and coal prices have plunged.
Goncalves replaces Jim Kirsch as chairman and Gary Halverson as CEO of Cliffs.