RPT-UPDATE 2-Cliffs Natural says activist investor rejects offer to end proxy fight


* Says offered to let Casablanca appoint two independent directors

* Says a third director was to have been appointed by mutual agreement

* Says postponing record date for annual shareholder meeting

March 7 (Reuters) - Iron ore producer Cliffs Natural Resources Inc said activist investor Casablanca Capital LP had rejected an offer to settle a proxy fight and was seeking full control of the board.

Casablanca, Cliffs' fifth-largest shareholder with about a 5 percent stake, nominated six directors for election to the company's 11-member board on Thursday.

Cliffs said on Friday it had offered to let Casablanca appoint two independent directors. A third director was to have been appointed on mutual agreement.

"We are disappointed that Casablanca seems intent on waging a public campaign rather than continuing its private engagement with Cliffs' board and management team," Cliffs said, adding that it was ready to engage with the hedge fund.

Cliffs also said it was postponing the record date - the date on which an investor must own shares to be entitled to vote - for its annual shareholder meeting, as requested by Casablanca, to pursue a potential settlement.

Cliffs is yet to set a new date for the meeting, originally scheduled for May 13.

Casablanca started its campaign in January. It wants the company to spin off its "riskier" international operations from its cash-generating U.S. assets.

Cliffs said last month that it would indefinitely suspend a planned expansion at its Bloom Lake mine in Canada and shut another mine in the country, cutting about 500 jobs.

The company has been hit by weak iron ore prices and higher-than-expected costs at Bloom Lake in Quebec, once seen by analysts as a key growth prospect.

Casablanca, whose slate of directors includes its Chief Executive Douglas Taylor and former Metals USA CEO Lourenco Goncalves, has named Goncalves as its preferred candidate to lead Cliffs.

The company appointed Gary Halverson to the top job last month.

Cliffs' shares closed at $19.10 on Thursday. They have slipped 27 percent since the beginning of the year.