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Cliffs receives permission to buy Canadian mining firm

Cliffs Natural Resources Inc. has received the final regulatory approval needed to proceed with a multi-billion dollar purchase of a Canadian mining firm.

Cliffs Natural Resources

Cliffs Natural Resources Inc. has received the final regulatory approval needed to proceed with a multi-billion dollar purchase of a Canadian mining firm.

Cliffs announced today that the Chinese Ministry of Commerce had cleared Cliffs' proposed acquisition of Consolidated Thompson Iron Mines Limited. Cliffs hopes to close the deal on Thursday. Cliffs announced earlier this year that its had agreed to buy Consolidated Thompson a cash deal worth about $4.9 billion Canadian.

The purchase will help Cliffs achieve its goal of increasing its presence in international markets. After the acquisition and planned expansion projects are completed, Cliffs expects nearly half of its North American iron ore production will be exported, giving Cliffs greater access to Asian markets. Currently, all of Thompson 's production is contracted under long-term arrangements, including an alliance with Wuhan Iron and Steel (Group) Corp., China's third-largest steel producer, and two large Asian commodity brokers.

Thompson operates in northeastern Quebec, western Newfoundland and Labrador. It operates the open-pit Bloom Lake iron ore mine, and is increasing its annual production capacity to 8.8 million tons. It is working on an expansion that will double production capacity to 17.6 million tons a year.

Buying Consolidated Thompson will enable Cliffs to produce up to 33 million tons of iron ore pellets, up to 17.6 million tons of iron ore concentrate and up to 12.1 million tons of lump and fines iron ore a year, Cliffs said earlier this year.

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Cliffs owns -- partly or entirely -- Hibbing Taconite, Northshore Mine and United Taconite in Minnesota and the Empire and Tilden Mines in Michigan.

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