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Cleveland-Cliffs to aquire W. Va., Ala., coal mines

Iron ore supplier Cleveland-Cliffs has closed a deal to acquire a major domestic coal producer. Cleveland-Cliffs will pay $450 million and assume $160 million in debt for PinnOak Resources, LLC, which operates two coal mines in West Virginia and ...

Iron ore supplier Cleveland-Cliffs has closed a deal to acquire a major domestic coal producer.

Cleveland-Cliffs will pay $450 million and assume $160 million in debt for PinnOak Resources, LLC, which operates two coal mines in West Virginia and one of Alabama.

The coal mines are rated to produce 7 million tons of premium-quality metallurgical coal annually, although the facility's have recently been producing less than that, according to a Cleveland-Cliffs news release.

The mines are currently projected to produce 5 million tons in 2008.

Officials of Cleveland-Cliffs say they plan to reach new sales agreements that would increase production at the mines.

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PinnOak, which in 2008 is projected to contribute about $400 million to Cleveland-Cliffs' revenue, has about 140 million tons of coal reserves.

Metallurgical grade coal is used in the steelmaking process.

About 80 percent of PinnOak's 2007 sales are expected to supply international customers, said Joseph Carrabba, Cleve-land-Cliffs chairman, president and chief executive officer.

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