PROXY Governance, Inc.(PGI), a leading proxy advisory firm, has recommended that shareholders support management in the Cleveland-Cliffs proxy battle.

Cleveland-Cliffs is a mining company that produces iron ore pellets and supplies metallurgical coal to the steelmaking industry; the company also has announced plans to build a biomass fuel plant.

As an Ohio corporation, Cleveland-Cliffs is subject to the state's "control share acquisition," which requires shareholder approval for any acquisition of shares which, when added to its existing ownership stake, would entitle the acquirer to control any of the following ranges of voting power in the election of directors: One-fifth or more but less than one-third, one-third or more but less than a majority, or a majority.

In this instance, Harbinger Capital Partners Master Fund 1, Ltd., and Harbinger Capital Partners Special Situations Fund, LP (“Harbinger”), which presently own approximately 15.6% of outstanding shares, seek to increase their aggregate holdings to greater than 20%, but less than 33 1/3%, of the company’s outstanding common shares.

PGI notes that Harbinger's acquisition could allow it to influence corporate strategy and decision-making, yet provides no immediate or obvious economic advantages to existing shareholders.