Report: Cliffs Natural Resources Mine May Get Quebec Bail Out

Cliffs Natural Resources Inc CLF gained about 11 percent Tuesday on news that the Quebec government may participate in the purchase of an idled ore mine and related facilities.

"We're trying to ensure the survival of the mine," Quebec Economy Minister Jacques Daoust told Bloomberg.

Shares of Cliffs, off 64 percent in the past 12 months amid cratering prices for iron ore and an activist campaign that concluded last summer, changed hands recently at $6.49, up 10.7 percent.

Cliffs is trying to sell assets in Northeastern Quebec including the Bloom Lake mine, the Wabush Mine, and related port and rail assets in Quebec and Labrador, according to a report by the Canadian Broadcasting Corp.

Cliffs shut down operations at the mine in January and sought creditor protection for its related subsidiary in January.

Quebec is prepared to buy a rail line and port facilities as well as a 20 percent interest in the Bloom Lake Mine, Daoust told Bloomberg.

Bloom Lake was acquired in 2011 and Cliffs, which has already spent $1.6 billion on the project, estimated another $1.2 billion would be required to bring the mine to full operation, according to Bloomberg.

The mining operation is located near Fermont, Quebec, near the border of Labrador and about 750 miles northeast of Montreal.