Cleveland-Cliffs Inc. has authorized the buyback of up to $200 million worth of shares of stock, officials announced Monday.
The company, which runs the Hibbing Taconite, United Taconite and Northshore Mining operations in Northeast Minnesota's Iron Range, said the repurchase plan is expected to remain active until Dec. 31, 2019.
The stock buy-back plan comes one month after Cliffs announced it would start awarding shareholders a quarterly dividend of 5 cents per share for the first time.
The favorable nods to shareholders come after years of restructuring in which the once troubled Cleveland-Cliffs shut or sold off its coal mines and shed its international iron ore mining operations.
Today the company is smaller but has returned to profitability. It primarily operates iron ore mining facilities in Minnesota and Michigan. However, it is building a hot-briquetted iron (HBI) plant in Toledo Ohio that should be completed next year.
The Toledo plant is a venture that Minnesota officials had hoped might end up on the Iron Range. However, a series of spats between Cliffs and Minnesota state officials over a once bankrupt mining operation in Nashwauk prompted Cliffs to sue the state of Minnesota over mining permits and to choose Ohio over Minnesota to build its new HBI plant.
As respects the share buyback plan, Cleveland-Cliffs CEO Lourenco Goncalves said in a statement that "The disconnect between our strong profitability and the current volatility in the capital markets has created a highly accretive use of capital by buying back our own common shares."
He added that the move is "similar to what we did a few years ago with our debt repurchases at deep discounts. We will not fight the tape; but we will definitely take advantage of this unique opportunity the market has given to us."