Cliffs Natural Resources is manoeuvring to buy out its partners in Wabush Mines, which operates iron ore mining and pellet facilities in Labrador and Quebec.

The Cleveland-based company announced on Monday that it would use its right of first refusal to acquire U.S. Steel of Canada's 44.6 per cent interest in the operation and ArcelorMittal Dofasco's 28.6 per cent stake. The deal is worth $88 million US, according to the company.

Cliffs Resources or companies it's acquired have been the managing partners since the mine opened in 1965.

Over the weekend, mining company Consolidated Thompson announced an offer to buy 100 per cent of Wabush Mines for $120 million US.

But Cliffs Resources exercised its first right of refusal and will now become the sole owner of Wabush.

"Cliffs is enthusiastic about the opportunity to own 100 per cent of Wabush Mines," said Donald Gallagher, the president of Cliffs Natural Resources's North American division, in a company statement.

"Our commercial team has had great success marketing the blast furnace pellets produced there to a diverse customer set, including steelmakers in North America, Europe and Asia. Wabush also has an excellent operating team that understands how to run mines and a dedicated and skilled workforce."

There are still several hurdles that must be overcome before the deal is complete, including regulatory approval and the finalizing of definitive agreements.

The deal is supposed to wrap up in the fourth quarter of 2009.