COLUMBUS, Ohio — The buying spree by Cleveland-Cliffs continued Wednesday with a nearly $10 billion acquisition of Alpha Natural Resources, broadening the onetime Midwest company's international reach as well as its exposure to a global steel industry clamoring to fuel its mills.
Its biggest acquisition to date, the cash-and stock deal will create a company with the largest reserves of iron ore and metallurgical coal in the United States.
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The company will be named Cliffs Natural Resources, and own nine iron ore facilities and more than 60 coal mines in North and South America and Australia.
The iron ore business will operate from Cleveland and the coal business from Abingdon, Va. Alpha Natural Resources has a division in Roxana, Ky.
The combined company will have 8,900 workers and expected 2009 revenue of $10 billion, as demand from the steel industry grows.
Cliffs Natural Resources would have a reserve base of 1 billion tons of iron ore and 1 billion tons of metallurgical and steam coal.
The company expects annual sales volume of more than 30 million tons of iron ore and nearly 18 million tons of metallurgical coal, making it one of the largest suppliers to the world's steel industry.
It also expects to ship 17 million tons of steam coal, used by utilities to generate electricity.
The price of the U.S. coal used to make the coke that fuels the blast furnaces can go for as much as $250 a ton. Just last year, the cost was closer to $90.
Joseph Carrabba, Cleveland-Cliffs chief executive, said the deal shows that U.S. steel is still robust compared with growing international steelmakers.
”It was an old-line industry written off as dead that has emerged and been spectacularly successful,“ Carrabba said.