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COMMITMENTS AND CONTINGENCIES
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6 Months Ended |
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Jun. 30, 2014
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| Commitments and Contingencies Disclosure [Abstract] | Ìý |
| COMMITMENTS AND CONTINGENCIES |
NOTE 18 - COMMITMENTS AND CONTINGENCIES
Contingencies
Claims and Legal Proceedings
We are currently a party to various claims and legal proceedings incidental to our operations. If management believes that a loss arising from these matters is probable and can reasonably be estimated, we record the amount of the loss, or the minimum estimated liability when the loss is estimated using a range, and no point within the range is more probable than another. As additional information becomes available, any potential liability related to these matters is assessed and the estimates are revised, if necessary. Based on currently available information, management believes that the ultimate outcome of these matters, individually and in the aggregate, will not have a material effect on our financial position, results of operations or cash flows. However, claims and legal proceedings are subject to inherent uncertainties, and unfavorable rulings could occur. An unfavorable ruling could include monetary damages, additional funding requirements or an injunction. If an unfavorable ruling were to occur, there exists the possibility of a material impact on the financial position and results of operations of the period in which the ruling occurs, or future periods. Specifically, our wholly owned subsidiary, CQIM, along with the Bloom Lake General Partner Limited and Bloom Lake, instituted an arbitral claim against Bloom Lake’s former customer, Worldlink, in October 2011 for material and/or fundamental breaches of the parties’ 2007 offtake agreement for the purchase and sale of iron concentrate produced at the Bloom Lake mine.Ìý We filed the arbitration claim with the International Court of Arbitration of the International Chamber of Commerce pursuant to the dispute resolution provisions of the offtake agreement.Ìý Bloom Lake terminated the offtake agreement with Worldlink in August 2011 due to Worldlink’s failure to fulfill its obligations under the agreement and Worldlink’s demand to renegotiate the price of the iron ore concentrate in spite of being party to a long-term offtake agreement.Ìý Our damages for the breach of the offtake agreement are in excess of $85 million and Worldlink has counterclaimed for damages in excess of $100 million.Ìý We strongly disagree with Worldlink’s defenses and counterclaims and intend to vigorously pursue our claim.Ìý The arbitrators heard testimony at a hearing in May 2014 but have not yet issued a decision.Ìý A decision is expected from the arbitrators later in 2014.
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