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NEW YORK, July 14 (Reuters) - Miner and iron ore producer Cleveland-Cliffs Inc (CLF.N: Quote, Profile, Research) on Monday said it bought out the minority holder in an iron ore and pelletizing operation it owns in Minnesota for around $267 million in cash and stock, plus a supply of iron ore pellets.

As a result of the deal and a recently announced mine expansion in Michigan, Cleveland-Cliffs expects its total North American iron ore pellet production to rise to 23 million tons in 2008 and more than 24 million tons in 2009.

The company sold 22.3 million tons of iron ore pellets in 2007.

The company said it bought the 30 percent stake in the United Taconite operation from United Mining Co. for $100 million in cash and more than 1.5 million shares of its common stock. Based on Friday's closing price, those shares are worth about $167 million.

Cleveland-Cliffs, which already owned 70 percent of the Evelyn, Minnesota, operation, also agreed to supply United Mining with 1.2 million tons of iron ore pellets over the next five quarters at no cost.

The Cleveland-based company said the deal did not require regulatory approval and closed on June 30.

The company's shares rose $1.40, or 1.3 percent, to $110.81 in early trading on the New York Stock Exchange. (Reporting by Michael Erman, editing by Dave Zimmerman)