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Cliffs Natural Resources Inc said Casablanca Capital has refused their proposal that would end the continuing proxy fight to get control of the company's board, Reuters reported.

The activist investor is the fifth biggest stakeholder in the iron ore miner with a holding of 5.2%. The hedge fund is advocating for the removal of Chief Executive Gary Halverson and divesting the firm's international operations which it considered high-risk from its more profitable US assets. Casablanca Capital had already given six nominations for the election of the company's board of directors comprised of 11 members.

Last month, Cliffs named Halverson as CEO. However, Casablanca wants Cliffs headed by Lourenco Goncalves, the former CEO of Metals USA. The hedge fund had included the name of Goncalves as well Casablanca CEO Douglas Taylor in its list of nominees for the board of directors for Cliffs, the report said.

According to a statement, Cliffs said it proposed that Casablanca appoint two independent directors, with both firms appointing the third director jointly. In addition, Cliff also said it also obliged the hedge fund's request to postpone the March 14 record date for the yearly meeting, the report said.

However, Casablanca said it did not make the request. In a statement, the fund said, "The board that owns virtually no shares and has presided over an 80 percent value destruction is in our view showing its true colors by indefinitely postponing a shareholder vote and falsely suggesting that the delay was advocated by Casablanca."

This was countered by another statement from Cliffs which said that Casablanca Chairman Donald Drapkin suggested the record date postponement when he talked with Cliffs' Chairman James Kirsch over the phone, the report said.

Proxy advisory firms like the Institutional Shareholder Services or ISS and Glass Lewis will most likely examine Casablanca's effort to get more board seats closely since they usually apply more stringent standards when evaluating campaigns from activist investors, the report said.