UPDATE 2-Scotiabank sues Cliffs Natural for breach of loan terms

Thu Mar 19, 2015 12:05pm EDT
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* Scotiabank claiming damages of about $52.6 mln

* Not obligated to pay indebtedness, Cliffs told Scotiabank

* Cliffs shares fall as much as 7.2 pct (Adds comment from Scotiabank, analyst, shares)

By Anannya Pramanick and Shubhankar Chakravorty

March 19 (Reuters) - Canada's Bank of Nova Scotia sued Cliffs Natural Resources Inc, saying the U.S. iron ore miner had breached terms of a loan agreement when it filed for creditor protection for its Canadian operations.

Cliffs in January stopped production at its Bloom Lake mine in Quebec, where costs exceeded expectations, and started restructuring the Canadian operations after years of weak iron ore prices.

Cliffs' shares fell as much as 7.2 percent in morning trading on the New York Stock Exchange on Thursday.

The move to file for creditor protection in Canada accelerated Cliffs' payment obligations, Scotiabank said in a lawsuit filed in a U.S. District Court in Ohio on March 16.

Scotiabank is claiming damages of about $52.6 million.   Continued...