2 0 1 0 S U S T A I N A B I L I T Y R E P O R T

SHARED BENEFIT.GLOBAL GROWTH.COMMON VALUES.

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TABLE OF CONTENTS

5 ReportProfile

7 CorporateProfile

15 Corporate Governance

19 EconomicValue

25 EmployeeValue

33 CommunityValue

39 EnvironmentalValue

57 GRI Index

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Overour164yearsofoperation,considerationofenvironmental,social,

economicandgovernanceimpactshasbeencentraltohowweconduct

business.ThisispartofCliffs’DNA,contributingtoourresiliency

throughindustryandmarketcycles.

Buildingonourstrongpracticeandfirmcommitmenttoresponsibleand

safeoperationsandlocalcommunityengagement,Cliffsisdeepening

itsintegrationofsustainabilityprinciplesthrough:

•Leadership–settinggoalsthatreinforceoureffortsonsustainabilitytofurtherouraccountabilityandleadershipinoursector

•PeopleDevelopment–incorporatingsustainabilityinourtrainingandprofessionaldevelopmentandestablishingobjectivesforindividualsandteamsthroughoutouroperationsthatembedandintegratesustainability

•CoreBusinessSystems–enhancingourbusinessstrategyanddecision-makingbyconsideringmaterialandforward-lookingenvironmental,social,economicandgovernanceaspects

Byfocusingonleadership,peopledevelopmentandcorebusiness

systemswecanauthenticallydemonstrateourcommitmentto

sustainability.Weunderstandthereisnominingwithoutapermit.

Responsibleandsafeoperation,respectfulengagementandeffective

stewardshiparequalitieswebothfosterandrecognizethroughoutour

business.Bycultivatingthesequalitieswedevelopnewopportunities

andmitigateourriskwhilegainingthesupportofstakeholdersand

agenciesthatallowustooperateandgrow.

SustainabilityatCliffscreatesbusinessvalue,boththetangible

bottomlineformofvalue,andsignificantintangiblevalueintheform

ofimprovedrelationships,enhancedreputation,newpartnershipsand

collaborations.

SUSTAINABILITY @ CLIFFS

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Inthepastyear,wemadesignificantprogressinenhancingour

globalsustainabilityleadershipwiththeadditionoftwokeypositions-

executivevicepresident–legal,environment,governmentaffairsand

sustainabilityandgeneralmanager–globalsustainability.Withthe

supportoftheentireCliffsleadershipteam,wearecreatingalong-

termvisionforsustainabilitytodrivetransformationalchangeand

performanceinitiativesacrosstheorganization.

Inourtwopreviousreports,wedescribedtheprogressmadeintheearly

stagesofdevelopingsustainabilityinourvariousbusinessesincluding

thesuccessesandchallengesweexperiencedalongtheway.Building

onastrongfoundation,wearenowpositionedtodeepenoureffortsto

embedsustainabilityinourbusiness.Fromeverydaydecisionmaking

toourcorebusinessandoperatingsystemstothelensthroughwhich

wewilllookatgrowthobjectives,sustainabilitywillbeintegraltohowwe

conductbusiness.Whilethisundertakingisambitiousandwillrequire

focusanddedication,itisessentialtoourabilitytodelivermeaningful

valuefortheCompanyandourstakeholders.Simplyput,oursocial

licensetooperatewilldependonit.

The2010SustainabilityReporthighlightsthetheme,Common Values.

Global Growth. Shared Benefit.Duringatimeofextraordinarygrowth,

muchofwhichacceleratedin2010,wehavenotlostsightofourcore

values.Bystrengtheningourcommitmenttointegratingsustainability

andsafetyintoourcorebusinessobjectives,wecanpositively

impactthesocial,environmental,economic,andgovernanceaspects

ofourbusiness.

During2010,Cliffsdeliveredaleveloffinancialandoperational

performancethat,inmanyrespects,couldbecharacterizedas“offthe

charts”.Werealizedmanysignificantgrowthandprofitabilitymilestones

duringtheyearwithineachofourbusinesssegments.Againstthe

backdropofstrongpricing,mineraldiversificationandgeographic

expansion,wecompleted$6billionofacquisitionsin16monthsduring

2010andintothefirsthalfof2011.Inadditiontoenhancingouriron

oreassetbase,weaddedcoalminesandchromitedeposits.Ournear

termfocusisnowonintegrationandexecution–doneswiftlyand

responsibly.Weareproudofthisgrowthbutlikewiseknowgrowth

cannotcomeattheexpenseofresponsiblebusinessconduct.

Wenotewithgreatprideouraccomplishmentsonsustainability.

Likewise,weknowwecannotrestonpastaccomplishment–particularly

whenitcomestosustainability.Ourpastaccomplishmentsdo,however,

serveasareminderthatthesustainabilitybarismovingeverhigher.

Hereareseveralexamplesfromthereportthatillustrateoureffortsthat

havesustainabilityimpacts:

• SustainableForestManagementwasestablishedin2009tobenefitournon-mininglandsinNorthAmericawithtimbergrowthandharvestfordecades.Oureffortsin2010haveresultedinforestmanagementplansinthestatesofMichiganandMinnesotathatwillhelpensurehealthyforestsandarenewableresource.

• TheNorthernYilgarnProjectisaground-breakingagreementwiththeWesternAustraliaDepartmentofEnvironmentandConservation.Itisamodelofcollaborationthathasresultedinabalancedapproachtominedevelopment.

• AswedevelopthegreenfieldChromiteProjectinNorthernOntario,wehavebeensensitivetothesignificantandhistoricalconnectionbetweenAboriginalpeopleandtheirtraditionallands.Throughongoingdialogueandcollaboration,CliffsiscommittedtogainthetrustandrespectofFirstNationsthroughoutthedevelopmentprocess.

Wearepleasedtobeacknowledgedforoursustainability

achievementsforthepastyear,including:

• BeingnamedNo.97intheGlobal1000SustainablePerformanceLeadersRankings,issuedbyCRDAnalytics,aleadingproviderofindependentsustainabilityinvestmentanalytics.Inaddition,Cliffsrankedfourthamongthe64companiesrecognizedintheMetalsandMiningcategory.

• BeingnamedNo.23intheMaplecroftClimateinnovationindexes,whichranks350U.S.companiesforclimate-relatedinnovationandcarbonmanagementprograms.

Aswecontinuetoexpandourglobalfootprint,wewillsurelyfacenew

challengesandopportunities.Thefundamentals–providingasafe

workplace,managingourenvironmentalfootprint,buildingstrong

andrespectfulrelationshipswithourcommunitiesandstakeholders–

haveserveduswelloverourhistoryandwillguideusasweaddress

thesechallengesandopportunities,andstrivetoembedthehighest

standardsofsafety,environmentalperformance,ethics,economic

stewardship,andcommunityengagementinourbusiness.

Sincerely,

JosephA.Carrabba

Chairman,PresidentandChiefExecutiveOfficer

MESSAGEFROMTHECHAIRMAN,PRESIDENT AND CEO

REPORT PROFILE

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REPORTING BOUNDARY

Unlessotherwisenoted,thisreportdisclosesmaterialinformation

forthecalendaryear2010(January1–December31).Thedata

containedinthisreportcoversoperationswhereCliffshasgreater

than50percentownershiporwhereweexercisedcontrolthrougha

managementcontractforthefull2010calendaryear.

APPLICATION LEVEL

ThisreporthasbeenpreparedusingtheGlobalReportingInitiative

(GRI)G3reportingSustainabilityreportingguidelines,andachieved

aGRIG3ApplicationLevelB+.PleaserefertotheGRIContentIndex

inthebackofthereportforquickreferencetoreportedindicators.

Anindependentthirdparty,Ernst&YoungLLP,hasprovidedlimited

assuranceonselectedperformanceindicators,inaccordancewith

ISAE3000.Theirindependentassurancestatementisonpage55.

G3 REPORTING PRINCIPLES

InfollowingtheGRI,weappliedthequalitiesoftheG3reporting

principlesinthisreport.

SUSTAINABILITY CONTEXT AND COMPLETENESS

TheinformationcontainedinthisreportreflectsCliffs’environmental,

social,economicandgovernancecommitmentsandimpacts.

BALANCE AND CLARITY

Cliffsisdedicatedtoprovidingbalancedinformationaboutits

sustainabilityimpacts.Theobjectiveofthisreportistoprovidea

balancedviewofourmaterialimpactsinaclear,understandable

manner.

COMPARABILITY AND TIMELINESS

ThisreportisconsistentwiththeGRIG3Guidelinesandincludes

aGRIContentIndexforquickreferenceandcomparabilitytoour

performanceovertheprevioustwoannualsustainabilityreports.

ACCURACY AND RELIABILITY

ThissustainabilityreportwasreviewedforaccuracybyCliffs’

executiveleadershipteamandBoardofDirectorsandispublished

withtheirsupport.

For additional information about this report or questions about

sustainability at Cliffs, please contact Ron Nielsen, General Manager

- Global Sustainability, at Ronald.Nielsen@CliffsNR.com.

COMMON VALUES. GLOBAL GROWTH. SHARED BENEFIT.

Thethemeofthisreportillustratesourproudhistory,ourincreasingprosperityandourbeliefinsharingthisbenefitwithothers.2010wasayearinwhich

Cliffsexperiencedunprecedentedgrowthandinternationalexpansion.Actingasaresponsiblecorporatecitizenhasaffordedgrowthinourbusinessand

ourcommunities.Weinviteyoutolearnmoreaboutourcommonvalues,globalgrowthandsharedbenefitinourthirdannualsustainabilityreport.

MATERIALITY AND STAKEHOLDER INCLUSIVENESS

Cliffs’corporateheadquartersregularlyengageswithourstakeholders

todefinematerialissues.Methodsofengagementincludemeetings,

presentations,communitycontributionsanddialogue.Wearein

ongoingcommunicationswithinvestorsandemployeesandengage

withotherstakeholdersasneeded.Cliffs’stakeholdersincludethose

whohaveanimpactonorareimpactedbyouroperations,andinclude:

Someofoursiteshavehadformalprogramsinplaceforassessingthe

impactsofoperationsonlocalcommunities.Forthisreportingperiod,

therearenoactiveminesiteswhichhaveformalprogramsinplace

forassessingtheimpactswhenentering,operatingandexitinglocal

communities.StakeholderengagementatCliffs’minelocationsvaries

fromsitetosite,includingstakeholdermapping,sharingnewslettersand

updates,workingcloselywiththeenvironmentaldepartmentstoassist

withpublicmeetingsandotheroutreachopportunitiesaroundpermitting

efforts,environmentalorcommunitytopics.Additionally,PublicAffairs

workscloselywithcivicorganizations,localgovernmentbodies,staff

andschools,makingpresentations,providingworkshopsandoffering

minevisits.Oureffortshelptobuildrelationshipsandtoprovideour

stakeholderswithupdatesonoperatingactivitiesandopportunitiesto

addressquestionsandconcerns.

Cliffsrepresentativessitontheboardof,orareotherwiseactivein,a

numberofindustryassociationsincluding:

• AlabamaCoalAssociation

• AmericanIronandSteelInstitute

• MiningAssociationofCanada

• MinnesotaIronMiningAssociation

• NationalMiningAssociation

• WestVirginiaCoalAssociation

• WesternAustralianChamberofMineralsandEnergy

• Employees

• Localcommunitiesincludingindigenous,FirstNationsandAboriginalcommunities

• Customers

• Suppliers

• Investors

• Regulators

• Academia

• Non-governmentalagencies

• Localbusinesses

• Businesspartners

• Tradeorganizations

• Applicablelocal,state/provincialandfederalagencies

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CORPORATEPROFILE

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HeadquarteredinCleveland,Ohio,CliffsNaturalResourcesInc.(NYSE:

CLF)(Paris:CLF)isaglobalminingandnaturalresourcescompany,

responsiblyoperatinginfivecountriesandwithexplorationactivein

severalothers.CliffsisthelargestproducerofironorepelletsinNorth

America,amajorsupplierofdirect-shippinglumpandfinesironore

outofAustraliaandasignificantproducerofhighandlowvolatile

metallurgicalcoal.In2010,ourrevenueswere$4.6billion(USD),

representinga50%growthfrom2009.

BUSINESS SEGMENTS AND PRODUCTS

Cliffs’primarybusinessoperationsarearrangedandmanagedby

productcategoryandgeographiclocation:UnitedStatesIronOre,

EasternCanadianIronOre,NorthAmericanCoal,AsiaPacificIron

Ore,AlternativeEnergies,FerroalloysandGlobalExplorationGroup.

Additionally,CliffshasminorityinvestmentsinAsiaPacificCoal

(Sonoma–45%ownership)andLatinAmericanIronOre(Amapa–

30%ownership)whichareoutsideofthereportingboundariesfor

thisreport.

GLOBAL EXPLORATION

GLOBAL OPERATIONS

IRON ORE

COMMERCIAL

SALES

CUSTOMER AND MARKET DEVELOPMENT AND NEGOTIATION

MARINE

MINING

PREPARATION

MINING

DRILLING STAKEHOLDER RELATIONS

LAND ACCESS JOINT VENTURES

CRUSHEDCHROMITE

GRADED CONCENTRATED NUGGETS renewaFUEL

LUMP FINES PELLETIZED

RAIL

TRANSPORTATION

EMERGING BUSINESSCOAL

CLIFFS BUSINESS PROCESS

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GLOBAL OPERATIONS

1 CliffshasamanagementcontractinplaceforHibbingsodespiteminoritystakeweincludeinboundary.

2 PurchaseoftheBloomLakeoperationclosedMay12,2011andisnotincludedintheboundaryofthe2010report.

3 CockatooIslandisexcludedfromtheboundaryofthisreportsinceithasneitheramajorityownershipnorisitunderamanagementcontract.

4TheminesofCLCCwerenotoperatedbyCliffsforthefullyearsoarenotincludedintheboundary.

IRON ORE

Cliffs mines and processes iron ore that is sold to the steelmaking

industry. Our responsible production process and efficient

technologies allow us to produce a product that is high in quality

and low in cost, which we market and price based on varying mineral

content specifications.

COAL

In North America, our Company’s coal operations produce a high

quality, low volatile metallurgical coal, also known as coking coal, which

is a primary ingredient in the production of steel. Our 2010 acquisition of

Cliffs Logan County Coal (CLCC) added two underground metallurgical

coal mines and one open surface thermal coal mine.

OPERATING UNIT MINE (OWNERSHIP) PRODUCT

U.S. Iron Ore Empire (79%)Tilden (85%)Hibbing (23%)1

Northshore (100%)United Taconite (100%)

13 grades of iron ore pellets, including standard, fluxed and high manganese, for use in customers’ blast furnaces as part of the steelmaking process

Eastern Canadian Iron Ore

Wabush (100%)Bloom Lake (100%)2

Asia Pacific Iron Ore

Koolyanobbing (100%)Cockatoo Island (50%)3

Direct-shipping fines and lump iron ore

OPERATING UNIT MINE(OWNERSHIP) PRODUCT

NorthAmericanCoal

OakGrove(100%)PinnacleComplex(100%)PowelltonMine(100%)4

Chilton-Dingess(100%)4

Metallurgicalcoal

ToneyFork#2(100%)4 Thermalcoal

Iron Ore Coal Ferroalloys Alternative Energies Offices

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GLOBAL EXPLORATION GROUP

Ourexplorationprogramisintegraltoourgrowthstrategy.Wehave

severalprojectsandpotentialopportunitiestodiversifyourproducts,

expandourproductionvolumesanddeveloplarge-scaleorebodies

throughearlyinvolvementinexplorationactivities.Weachievethisby

partneringwithjuniorminingcompanies,whichprovideuslow-cost

entrypointsforpotentiallysignificantreserveadditions.Wespent

approximately$30milliononexplorationactivitiesin2010,which

weanticipatewillprovideuswithopportunitiesforsignificantfuture

potentialreserveadditionsglobally.

GLOBAL COMMERCIAL

ResponsibilitiesofourGlobalCommercialgroupincludestrategic

customeralignmentforsalesofironoreandcoal,aswellasemerging

productssuchasferroalloys,irontechnologiesandrenewaFUEL.

Thisincludesallpricing,partnershipsandleadershipofsalesteams.

Weareestablishingaglobalstrategicmarketingfunctionthatwill

haveresponsibilityformarketresearchandanalyticsincludingthe

maximizationofprofitabilityforcustomerrelationships.Commercial

alsooverseestheglobaltransportationandlogisticsfunctionatCliffs.

FERROALLOYS

Through the 2010 acquisition of Freewest Resources and Spider

Resources, it is expected that we will expand our portfolio to offer

ferrochrome in 2015.

ALTERNATIVE ENERGIES

Cliffs is conducting research and development on alternative energies

through renewaFUEL. As we explore this more environmentally

responsible fuel source, we will update our progress.

OPERATING UNIT LOCATION(OWNERSHIP) PRODUCT

renewaFUEL Michigan(95%) High-quality,densefuelcubesmadefromrenewablecomponents

OPERATING UNIT MINE (OWNERSHIP) PRODUCT

Chromite Black Thor (100%)Black Label (100%)Big Daddy (74%)

High-grade chromite ore — processed into ferrochrome, a main component of stainless steel

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ACQUISITIONS

Cliffscompletedfouracquisitionsin2010foratotalinvestmentof

$1.1billion.

•Acquisitionsoftheremaining73.2%ofWabushmine–increasedEasternCanadianIronOreannualcapacityby4millionlongtons.

•INREnergycoaloperations,nowCliffsLoganCountyCoal(CLCC)–expandedNorthAmericanCoalcapacityby2.9millionshorttonsannuallyandaddedthermalcoaltoCliffs’productoffering.

•FreewestResourcesandSpiderResources–providedCliffswithcontrolofthreepremiumChromitedeposits,whichwillprovideanestimatedannualcapacityof0.6millionmetrictonsofferrochromeand1millionmetrictonsofchromiteconcentrate.Estimatedtobeginproductionin2015.

Additionally,inearly2011weclosedontheacquisitionof

ConsolidatedThompsonironorefacilityinEasternQuebec,Canada.

Moreinformationaboutthisexcitingprojectwillbeincorporatedin

our2011report.Theprojectisanticipatedtoadd24milliontonsto

theannualcapacityofourEasternCanadianIronOrebusiness.

EXPANSION

IneffortstosustainandincreaseCliffs’operations,whichalso

contributetolocaleconomicdevelopment,weinvested$270millionin

capitalprojects.Significantprojectsinclude:

•Koolyanobbingmineexpansion–Increaseannualcapacityto11millionmetrictonsbytheendof2012,a30%increaseoverDecember31,2010.

•OakGrovemine,Alabama–Additionalcapacityexpectedaftertheconstructionofanewportal(mineshaft).

•Pinnaclemine,WestVirginia–Increaseinproductyieldandplannedavailabilitythroughprepplantimprovementsandlongwallexpansion.

•Expandcapacityandextendproductionto2015.

ANNUALCAPACITYASOFDECEMBER2010

U.S. IRON ORE (LONG TONS)

EASTERN CANADIAN IRON ORE (LONG TONS)

ASIA PACIFIC IRON ORE (METRIC TONS)

NORTH AMERICAN COAL (SHORT TONS)

FERROALLOYS (METRIC TONS)

Existing

2010 Initiated Expansion

2010 Acquisition

Consolidated Thompson Acquisitions

2010RESULTSANDKEYBUSINESSDEVELOPMENTS

2010wasayearofgrowth,accomplishmentandgreatchangefor

Cliffs.Overthepastfiveyears,theCompanyhasconsistentlyexecuted

onabusinessstrategytodiversifyourproductportfolioandincrease

geographicaccess.Followingthisstrategyhasallowedustocapitalize

ontheworld’sgrowthmarketforsteelandtosupportthatgrowth

throughsuperiorbusinessexecution.

32.9

1.6

9.9 2.9 TBD

6.5 2.5

1.5 4.0 24.0

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AWARDS AND RECOGNITION

Cliffswastheproudrecipientofanumberofpreviously

announcedawardsandhonorsin2010,including:

•ListingsonTwoMaplecroftClimateInnovationIndexes

•RecognitionontheGlobal1000SustainablePerformanceLeaderslist

•MincomInnovationandExcellenceinAssetManagementVisionAward

•BloombergBusinessweekTop50BestPerformers

EXECUTION

Carryingoutourgrowthstrategy–organic,expansionandacquisition

basedgrowth–takessuperiorexecutionandoperationalexcellencein

keyareas.Thisreportshowcasesmanyexamplesofourstrategyand

execution,including,butnotlimitedto,ourfocusonthesekeypriorities:

•Safety

•CostManagement

•TalentManagement

•BusinessImprovement

TheeffortsofCliffs’employeesin2010resultedinrecordrevenueand

netincomefortheyear,astrongyetconservativebalancesheetand

theopportunitytoincreaseourdividendrateby60%.Aswecontinue

togrow,weremainrootedinourvaluesandcommittedtosharingour

success.

Additional information about our 2010 strategic growth opportunities, transactions completed, and risk assumptions can be found in the “Growth Strategy and Recent Developments” section of our 2010 10-K Report which can be found online at ir.cliffsnaturalresources.com.

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CORE VALUES

Cliffshasoperatedasaresponsiblecorporatecitizenformore

than160years,andwemustcontinuetoprogressandimprove.

Ourabilitytoworkwithvariousstakeholdersandtodemonstrate

andcommunicatetheCompany’seffortsandachievements,will

supportourfutureendeavorsincommunitiesinwhichweoperate

aswellasthoseweseektoenter.Insupportofthisobjective,Cliffs

operatesandwillcontinuetooperateunderaframeworkofstrong

corevalues.

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Recognize& Reward

Achievement

EnvironmentalStewardship

SafeProduction

CustomerFocus

Integrity

CreatingEconomic Value

Teamwork

BiasforAction

Trust,Respect&Open

Communication

Group&Individual

Accountability

CORPORATE GOVERNANCE

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Corporategovernanceandacommitmenttobusinessethicsareatthecoreof

maintainingCliffs’relationshipswithstakeholders.Cliffs’operatingprinciples,our

corporatestructureandourthoughtfulapproachtoengaginginpublicdebateare

hallmarksofhowweoperateasacompany.

BOARD OF DIRECTORS AND EXECUTIVE PERFORMANCE

TwelvememberssitonCliffs’BoardofDirectors(Board),includingour

Chairman,PresidentandChiefExecutiveOfficer(CEO),whoensuresthere

areappropriateinteractionsbetweentheBoardandourmanagement.Thereis

frequentcommunicationonmaterialissueswith,andthroughformalreporting

bymanagement,totheBoard.InadditiontoregularlyscheduledBoardand

committeemeetings,theBoardreceivesabi-monthlymanagementreportdescribing

currentperformance,significantactivitiesandbusinessdevelopments–including

environmental,socialandeconomicperformance.

Cliffs’CorporateGovernanceGuidelinesoutlineDirectorselectionandretention,

meeting,communicationandreportingstandards,compensationandperformance

evaluation,committeesandotherkeygovernanceaspects.Directorsperform

annualself-evaluationstoassesswhethertheBoardandcommitteesarefunctioning

effectively.TheCompensationandOrganizationCommitteereviewsandapproves,

onanannualormorefrequentbasis,corporategoalsandobjectivesrelevantto

compensationfortheCEOandotherexecutiveofficers.Forthefullversionofour

CorporateGovernanceGuidelines,visithttp://ir.cliffsnaturalresources.com.

Behavinginlinewithourcorevalues...beingresponsibleforouractions...providingplans/standards/expectations...holdingyourselfand/orthegrouptoahighstandardofperformance...walkthetalk.

CliffsCoreValue:

Group&Individual

Accountability

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BOARD COMMITTEES

Cliffs’Boardhasfourcommittees.TheBoard-approvedcommittee

chartersdefinefunctions,responsibilitiesandmembership

qualifications,appointmentandremovalprocedures,structureand

operationsandreportingprocedurestotheBoard.Ourcommittee

chartersareavailableforreviewathttp://ir.cliffsnaturalresources.com.

STRATEGY AND OPERATIONS COMMITTEE

ResponsibleforoverseeingCliffs’businessstrategyandmaintaining

acooperative,interactivestrategicplanningprocesswithmanagement

inthesettingofstrategicgoalsandexpectations;thereviewof

themeritsandrisksofpotentialacquisitions,jointventuresand

strategicalliances.

GOVERNANCE AND NOMINATING COMMITTEE

Responsibleforidentifyingandrecommendingpotentialdirector

nomineesandcommitteeassignments,reviewingandrecommending

applicableCorporateGovernanceGuidelines,reviewingDirector

compensationandbenefitplans,reviewingthesizeandmakeupofthe

BoardandparticipatingintheannualreviewoftheBoard’sperformance.

AUDIT COMMITTEE

ResponsibleforassistingtheBoardinitsoversightresponsibilitieswith

respecttofinancialstatements,reportingprocessandcompliance,

independentauditors,internalaccountingandfinancialcontrols,

internalauditfunction,enterpriseriskmanagementandconformity

withapplicablelegalrequirementsandtheCliffs’CodeofBusiness

ConductandEthics.

COMPENSATION AND ORGANIZATION COMMITTEE

ResponsibleforestablishingandadministeringCliffs’policies,

programsandproceduresforcompensatingmanagement;

recommending,approvingandevaluatingtheperformanceof

Companyofficers,includingdevelopmentandsuccessionplanning

strategies;andreviewingandapprovingtheCompensationDiscussion

andAnalysisforinclusioninCliffs’proxystatement.

GOVERNING CODES AND POLICIES

TheCodeofBusinessConductandEthics(Code)governsCliffs.The

CodeholdsCliffsanditsemployeestothehigheststandardsofintegrity.

WerequirethisCodetobeupheldbyallemployees,companydirectors

andofficers,aswellasagents,consultantsoranyrepresentatives

conductingbusinessforCliffs.

TheCodespecificallystatesthatCliffs’performsbusinessoperations

andactivitiesinaccordancewithbestavailableenvironmental

practices,andprovidesforfairtreatment,equalopportunityandthe

healthandsafetyofallCliffsemployees.TheCodealsoaddresses

keyprinciplesforavoidingconflictsofinterestortheappearance

ofconflictsofinterest.ForthefullversionofourCode,visithttp://

ir.cliffsnaturalresources.com.

Integratedthroughoutthereport,youcanfindmoreinformationonour

Environmental,Climate,HumanRightsandSafetyandHealthandLoss

Preventionpolicies.

Doingwhatyousayyouaregoingtodo...nohiddenagendas...doingtherightthing...beingtruthful...zerotolerance...notwalkingawayfromasituation...beingcredible.

CliffsCoreValue:

Integrity

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PUBLIC POLICY INITIATIVES

Inanefforttoencouragelong-termgrowthandbenefitthe

communitiesinwhichweoperate,weengageinthelobbyingof

legislation,regulatoryactivitiesandpublicpolicyinitiatives.Cliffs

encouragesemployeeparticipationinpublicaffairsbyengagingin

volunteereffortsandcontributingtothepoliticalpartyandcandidates

oftheemployees’choice.Cliffsitselfdoesnotendorseoruse

companyfundstosupporttheelectioncampaignsofcandidatesfor

electedoffice,evenwheresuchcontributionsaredeemedlawful.

Cliffsmaintainstwoseparatepoliticalactioncommittees(PACs)within

ourU.S.operations.ThetwosegregatedPACfundsarepermitted

underelectionlawandsupportedbyvoluntarycontributionsfromCliffs

employees.In2010,ourPACscontributednearly$56,900tovarious

candidatesforstateandfederaloffice.Contributionsinsupportof,

orinoppositionto,non-partisanreferendumissuesarepermittedin

stateswherenotprohibitedbylaw.

2010wasayearofsignificantturnoveroffederalandstateelected

officialsintheU.S.inregionswhereCliffshasoperations.Allfive

statesinwhichCliffsoperateselectednewgovernors,fourstates

hadachangeinstatelegislaturecontrolandfivenewmembersof

Congresswereelected.Duetothesechanges,Cliffs’government

affairsgroupspenttimefamiliarizingnewlawmakerswithCliffsand

withpublicpolicymattersofimportancetotheminingindustry.

Inordertocontinuegrowingandprovidingvaluetoourcommunities,

Cliffsmaintainsastrong,activevoiceinimportantpublicpolicydebates

thataffectourbusiness.Thereweremanyimportantpublicpolicy

initiativesthattookplacein2010.Whileallofoureffortsareimpactful,a

fewdeservetobehighlightedasparticularlysignificantachievements.

•TheCompanylobbiedinoppositiontocertainprovisionsoftheRobertC.ByrdMineSafetyProtectionActof2010.Safetyiscoretothewayweoperate.However,thesemeasuresunnecessarilyexpandedtheMineSafetyandHealthAdministration’sregulatoryauthority,wronglyimposedunwarrantedcriminalpenaltiesonemployersandexposedcompaniestoadditionallitigation.Althoughthebillultimatelyfailed,CliffsfavoredreformsthatwouldreducethebacklogofcontestedcasesattheDepartmentofLabor’sMineSafetyandHealthReviewCommissionandmakerevisionstothePatternofViolationsprogram.Cliffsalsosupportedmeasuresthatencourageacooperativeapproachto

improvingminesafety.

•CliffscontinuedtoworkalongsidefederallawmakersandalliedindustriestoadvocateformeasuresinfederalclimatechangelegislationbroughtforthbytheU.S.Senate.Althoughnoneofthesebillswereadopted,weadvocatedforemissionsallowancesforenergy-intensiveindustriessuchasironoreminingandprocessing,thatwouldbedisproportionatelyimpactedbyrisingcostsresultingfromeconomy-widecarbonregulation.

•CliffssuccessfullyconcludedeffortswithMichigangovernmentofficialsandtheMichiganDepartmentofNaturalResourcesandEnvironmenttoissueanairpermitforMichiganIronNugget,LLC.Cliffs’government,publicandenvironmentalaffairsgroupscompletedastrategicplan,initiatedin2007,toeducatecommunitymembers,electedofficialsandcivilservantsontheeconomic,environmentalandsocialbenefitsofironnuggettechnologyandtheMichiganIronNuggetproject.Notablelocalsupportfortheproject,includingover20lettersofsupportledtotheissuanceofthepermit.

•WespentsignificanttimeworkingwithOntarioprovincialagenciestodiscussgovernmentinvolvementinourproposedchromitedevelopmentproject.TheagenciesweworkedwithincludetheMinistryofNorthernDevelopment,MinesandForestry,MinistryofNaturalResources,MinistryofTransportation,MinistryofEnvironmentandMinistryofAboriginalAffairs.PleaseseeLandStewardshipsectiononpage44forfurtherdetail.

Gettingthingsdone...reducedredtape...“barrierless”...callanybodyyouwant...managementbyfact...planthework, worktheplan.

CliffsCoreValue:

BiasforAction

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ECONOMIC VALUE

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MANAGEMENT APPROACH

CreatingsustainableeconomicvalueisaboutexecutingCliffs’strategyandtheeffect

thatvaluecreationhasonCliffsandthegreatercommunity.Ourabilitytogrowand

employmorepeopleexpandsoureconomicreachbeyondCliffsthroughbothdirect

andindirectdistribution.Maximizingoureconomicimpacttakesacommitmentto

financialdisciplinethatisexemplifiedbytheworkofourBusinessImprovementand

SupplyChainteams.In2010,thesetwoteamscontinuedtheiroutstandingtrack

recordofcreatingfinancialvalue.Butmoreimportantly,theyputinplacenewpractices

andeffortsthatintegratesustainability,whichwillpaydividendsinthefuture.Alsokey

toeconomicvaluesiscustomerfocus,anothercorevaluethatCliffsembodiesthrough

continualproductimprovementandsatisfactionmeasures.

ECONOMIC AND BUSINESS IMPACT

Ourfinancialdisciplineandsuccessbenefitsourshareholdersaswellasthelocaland

regionaleconomiesinwhichweoperate.In2010,Cliffs:

•Added1,163employeestoourworkforce(overyear-end2009)

•Distributed$734milliontoemployeesinwagesandbenefits

•Paid$292millionintaxestogovernmentagencies

Inadditiontodirectcontributionstotheeconomy,theeconomicimpactstudywe

conductedin2009estimatedoureconomic“multipliereffect,”whichmeansthateach

Cliffs-createdjobsupports3.4otherjobsinthebroadereconomy.

ECONOMIC VALUE GENERATED AND DISTRIBUTED ($inMillions)

2010 2009 2008

DIRECT ECONOMIC VALUE GENERATED

a)Revenues 4,682.2 2,342.0 3,609.1DIRECT ECONOMIC VALUE DISTRIBUTED

b)Operatingcosts 2,683.5 1,673.7 2,125.4c)Employeewagesandbenefits 733.7 438.1 544.8d)Paymentstoprovidersofcapital 103.1 57.2 63.5e)Paymentstogovernment(taxes) U.S. 197.1 91.1 184.3 Canada 15.5 0.1 0.7 Australia 79.3 48.9 80.3 Brazil 0.3 - -f)Communityinvestments1 2.4 2.8 1.4

SUBTOTAL 3,814.9 2,311.9 3,000.4ECONOMIC VALUE RETAINED 867.3 30.1 608.7

Dataoneconomicvaluegeneratedanddistributedprovidesstakeholderswith

informationonhowCliffshascontributedfinanciallytoinvestors,employees,

governmentsandthecommunitiesinwhichweoperate.

1IncludescontributionsfromCliffscharitableandcorporategivingprogramsandthemineoperations

Doingtherightthingsrightthefirsttime... eliminationofwasteandinefficiency...breakthroughsinproductivityandtechnology.

CliffsCoreValue:

CreatingEconomic Value

21

SHAREDBENEFIT: SUPPORTING LOCAL INFRASTRUCTURE

Weimpactthecommunitiesinwhichweoperate,whetherwehave

beentherefordecadesorjustafewyears.Ourapproachistoshare

oursuccessandhelpeverybodyadvance.WhileCliffsbenefitsfrom

sociallicensetooperateandcommunitygoodwill,thelocalcommunity

gainsaccesstoresourcesandeconomicadvantages.Thistruly

createsawin-win,sharedbenefitopportunity.

Waysthroughwhichwesupportedlocalinfrastructurein2010include:

•Bringingwatertomorethan40familiesinPineville,WestVirginiafromawaterlineextensionatourPinnaclesite

•Providingpro-bonoassistanceand$100,000infinancialsupportforthestormsewerreplacementprojectintheCityofIshpeming,Michigan,nearourEmpireandTildensites

•Promotingsafetythrougha$32,000contributiontotheWabushLocalVolunteerFireDepartmentfornewfirefightingsuits/uniformsandpagers

TANGIBLE VALUE INTANGIBLE VALUE

For Cliffs • Tax Optimization • Social License to Operate

• Goodwill

For Others • Financial Support

• Improved Services

• Better services to attract population or industry

22

SUPPLY CHAIN

Cliffs’SupplyChainManagementteamhastakenaleadingrolein

developingandimplementingpracticesconsistentwithourprinciplesof

sustainability.Fromasolidfoundationbuiltin2009and2010,theSupply

ChainteamisactivelycollaboratingwithourSustainabilitygroupto

embedthesepracticesglobally.

Supplychainusesextensivesupplierquestionnairesinthee-sourcing

platformtoensurethosewedobusinesswitharealignedwithourcore

valuesandourcommitmenttosustainability.Vendorresponsesare

incorporatedintosupplierselectiondecisions.Giventhesubstantial

growthofCliffs,wearefindingthatleveragingourglobalspending

influencesevenstrongervendorrelationships,enablingustowork

togetheroncommonsustainabilitygoals.Additionally,todemonstrate

commitment,sustainabilityfactorshavebeenincludedinthebalanced

scorecardsofeachemployeeintheSupplyChainteamandarepartof

theirperformanceevaluation.

TheSupplyChainteamcontinuestopartnerwithouroperations

groupstopursueopportunitiestosupportsustainabilityprinciplesto

helprealizepositiveimpacts.Intheareaofeconomicsustainability,the

SupplyChainteamachievedsignificantfinancialresultsin2010.

•Inclosecollaborationwithoperationalstakeholders,theSupplyChainteamachieved$34.6millioninannualizedcostsavingsandavoidancethroughstrategic,centralizedandsite-basedprocurementinitiatives.Materialsmanagementandcapitalequipmentwereareasofparticularfocus.

•Workingwithacross-functionalteam,theSupplyChainteaminitiatedprojectstorecyclescrapmetalandselldecommissionedassets,whichtogethergeneratedcashproceedsof$5.9millionacrossourNorthAmericanoperations.

•TheInventoryControlteampartneredwiththeMaintenance,Operations,andFinancegroupstosystematicallyassessslow-movingorexcessiveinventoryandoptimizetheexcesstoreducetotalNorthAmericansuppliedinventoryby$10.5million,or5.9%.

Additionally,severallong-termprojectswereinitiatedin2010thatCliffs

expectstodeliverfinancialbenefitsin2011andbeyond.

•AnalysisofMichigan’sFluxstonehaulingrequirementstoreducetrucktransport.Inadditiontofinancialgains,thecommunitywillrealizeenvironmentalbenefitsthroughlowertotaltruckemissions,lessnoiseanddustandreducedwearonroads.

•ConstructionandLeadershipinEnergyandEnvironmentalDesign(LEED)certificationofourOakGrovebathhouse.Ifachieved,thiswillestablishamilestoneasCliffs’firstsignificantLEEDconstructionproject,andwillserveasamodelforfutureefforts.

•Introducinguseofnew,harderchromegrindingmedia,tolowerconsumptionandoperatingcostsatourUnitedTaconitefacilitybyreducinglevelsofrawmaterialsbeingconsumedinouroperations.

23

CUSTOMER SATISFACTION

Healthycustomerrelationshipsareessentialtoourbottomline.Cliffs

operatesasacustomer-centricorganizationandstrivestodeliver

ever-increasingqualityandpremiumproductstoensurecustomer

satisfaction.Weengagewithourcustomersonaregularbasisthrough

phonecontacts,on-sitemeetings,participationinourbi-annual

CustomerQualityConferenceandannualqualityperformancereviews.

Cliffstestseachcargoorshipmentforconformancewithcustomer

requirementsandprovidesCertificatesofAnalysis.Whendeviations

fromcustomerandqualityexpectationsoccur,Cliffsissues

NonconformingCargoReports(NCR).Internally,wecoordinate

monthlymeetingstoevaluatesiteperformance,customerfeedback

andmarkettrends.Stayingaheadofexpectationsdeliversprosperous

businessreturnsandstrongcustomerrelationships.

BUSINESS IMPROVEMENT

BusinessImprovementisthevehiclethatCliffsusestodrive

sustainableresultsacrosstheorganization.Byutilizingmethodologies

fromLeanManufacturing,SixSigmaandStabilityFoundation,we

providetoolsthatdrivecontinuousimprovement.Inapplyingthis

model,oursitesandcompany-widedepartmentsareabletoachieve

improvementsandembedsustainabilityintotheirprocesses.

BusinessImprovementatCliffsbeginswiththelisteningtoour

stakeholders,bothexternalandinternal.Byprovidingtraining,

mentoring,andprojectfacilitation,weencourageimprovementsin

alllevelsoftheorganizationandindoingso,reinforceprideand

ownershipinallofourprocesses.Thisisthefoundationforproviding

satisfactiontoourexternalcustomers.Weareprogressinginourgoal

forallemployeestobringaspectsofthebusinessimprovementmodel

intotheirjobsby2015.

BusinessImprovementencouragesbestpracticesharingbyproviding

transparentprojectinformationandencouragingreplicationof

improvementprocessesaswecontinuetogrowintheinternational

miningandnaturalresourcesindustry.In2010wecapturedcost

savingsofover$50millionacrossourIronOreandCoaloperations.

HighlightsofBusinessImprovementactivitiesin2010include:

•Establishmentofintegrationteams,leveragingthesynergiesofcompaniesthathavejoinedCliffsandCliffs’bestpracticesandenablingsuccessofourgrowthandsustainabilitystrategies.

•RootCauseAnalysispractices,whichcontinuetoreduceaccidentsandinjuriesanddrivetheperformanceofourSafetymetrics.

•ExpansionofBusinessImprovementpracticesintothetransactionalworldtoreducewasteandredundancyinoursupportprocesses.

Listeningtothecustomer...beingresponsiveandontime...meetingqualityexpectations...helpingthecustomersucceed.

CliffsCoreValue:

CustomerFocus

NONCONFORMINGCARGOREPORTS(NCR) (permillionlongtonsshipped)

2010 2009 2008

Note:datareflectsNorthAmericanIronOreoperations.

3.55

3.4

24

EMPLOYEE VALUE

26

MANAGEMENT APPROACH

Cliffs’corevaluesexemplifythecriticalroleouremployeesplayinoureveryday

successes.Firstandforemost,weensuresafeworkingenvironmentsforouremployees.

Cliffsvaluesthefundamentalelementsofsafety,teamworkandrecognitionasvitalto

helpingour6,503employeesachievepersonalandcollectivesuccess.

Ourapproachtoprovidingouremployeeswithafair,respectful,safeandhealthy

workenvironmentisoutlinedintheCliffs’CodeofBusinessConductandEthics.We

havewell-establishedrequirementsandexpectationsintermsofsafeandhealthy

conduct,practicesandconditions–includingreportingincidents,injuries,andunsafe

equipment.Cliffsprohibitsanytypeofviolence,threateningbehavioranduseofillegal

drugsoralcoholinallofourworkplaces.

SafetycontinuestobeatoppriorityfortheCompany.Weimplementednew

proceduresatalllevelstoembedsafepracticesthroughoutouroperations,

resultinginimprovedperformance.2010wasalsoayearofadaptingourhuman

resourcepracticestomeettheneedsofourincreasingglobalization.Keytothiswas

establishingnewsuccessionplanningandleadershipdevelopmentpracticestoensure

thatouremployeeshavethecompetenciestomanageinthenewglobalenvironment.

Activelyinvolveothersindecision-making... knowwhentotakealeadershiproleandwhentobeanactivemember...recognizethevalueofteamworkandthesynergyitcreates.

CliffsCoreValue:

Teamwork

27

SAFETY LEADERSHIP

In2010,wecontinuetoimproveonourtrackrecordofimproving

safetyperformancewithareportableincidentrateof2.93andlostdays

severityof52days.Asoneofourlongstandingcorevalues,safetyis

consideredinstrategy,training,educationanddevelopmentandis

integratedatalllevelsofthebusiness.

Cliffscontinuallymeasuressafetyprogressusingabalanced

scorecardapproach.Scorecardaspectsaretiedtothesitegeneral

managers’annualobjectivesandperformanceassessments.

Approximately20-40%ofeachsite-levelmanager’scompensation

formulaistiedtoleadingandlaggingsafetyindicators.Ourstrategy

consistsofthreemajorcomponents:governance,proactiveinitiatives

andsiteimplementationplanning.Thisincludesthemeasurementof

safetyinteractionsandobservations,rootcauseanalysis,after-action

reviews,operationsaccountabilityandsitespecificinitiatives.

Theeffectivenessofoursafetyprogramsdependuponourfirst

andsecondlevelsofsitesupervision.Weareprescriptiveinour

approachandrequiredailysafetyinteractions,meetings,behavioral

observationsandpre-jobriskassessments.Weimprovedthe

qualityofourprogramsthisyearandwillfocusonincreasingtheir

effectivenessin2011.

Atourironoreminesites,weleademployeesontourstoidentify

hazardsandpotentialareasofcitation.Wehavefull-timeteamsof

onsiteauditorswhoreporttoaleadauditoronaround-the-clock

basis.Typically,auditorsareabletofix70%oftheirsafetyfindings

duringtheirshifts.Otherfindingsaretrackedandfixedbytrained

employees.

Nearlyallofourworkforceisrepresentedinformaljoint-management-

workerhealthandsafetycommitteesatourCliffssites.

Recordproductionwith:lackofinjuries...goodhousekeepingandorderlyworkareas...well-maintainedequipment...propertrainingandprocedures...lookingoutforandcorrectingeachother...safeconditionsandbehavior...SentinelofSafetyqualification.

CliffsCoreValue:

SafeProduction

3.702008

2.93

2009 2.99

2010

TOTAL REPORTABLE INCIDENT RATE (per200,000hoursworked)

57.82008

52.0

2009 58.6

2010

LOST DAYS SEVERITY RATE (per200,000hoursworked)

Note:AlthoughGRIasksforratesofinjury,occupationaldiseases,lostdays,andabsenteeism,andnumberofwork-relatedfacilitiesbyregion,Cliffstracksreportableincidentratesandlostdaysseverityrates.Thereferenceoflostdaymeansanydayanemployeemissesascheduledshift.Wedonotcurrentlytrackoccupationaldiseases.

28

Examplesofeffortstoengageemployeesandpromotehealthand

wellness:

•800employeesparticipatedinanonlinehealthassessment

•Morethan1,200employeesandspousesattendedlocalhealthfairs

•Morethan5,000employeesreceivedaMayo Clinic Guide to Self Carebook

•Morethan850employees/spouseshaveahealthclubmembershiporparticipateinafitnessequipmentreimbursementprogramorotherfitnessprogram

•Over500lbshavebeenlostfromtheCleveland-based“WeightWatchersatWork”program

•141Northshoreemployeesparticipatedinthe“HealthyHeartsProgram”

HEALTH AND WELLNESS

Cliffsisdedicatedtothesafety,healthandgeneralwell-beingofits

employeesandtheirfamilymembers.Byencouraginghealthand

wellness,Cliffshastheopportunitytoreduceabsenteeism,increase

productivity,managerisingscostsofhealthcare,preventdisease

beforeitoccurs,andimproveoverallemployeemorale.In2009,Cliffs

beganacompany-widewellnessinitiativeledbylocalcommittees

ateachsite.Wellnesscommitteeshavebeenestablishedatmanyof

ourminesitestoprovidewellnessassessments,screenings,health

fairsandhealthysnackoptions.InJuly2010,Cliffsworkedwiththe

MayoClinictoproduceemployeeresourcessuchasanonlineportal,

healthassessment,guidetoself-carebooksandmonthlynewsletters.

CliffsalsopartnerswithClevelandClinicforavarietyofhealthand

wellnessactivities.

TANGIBLE VALUE INTANGIBLE VALUE

For Cliffs • Reduced Absenteeism

• Increased Productivity

• Lower Cost of Health Care

• Employee Goodwill and Engagement

For Others • Better Health • Improved Morale

• Lower Stress

29

TRAINING AND DEVELOPMENT

In2010,weenhancedourhumanresourcesprocessesinanticipationofourfuture

growthandincreasingglobalization.Cliffsemploysaglobaltalentmanagement

processinordertoalignwithandmeettheneedsfortalentandleadershiptodayand

inthefuture.Ourtalentmanagementpracticesarestructuredto:

•Deliverfairandconsistentperformanceassessment

•Providelearninganddevelopmentopportunities

•Identifyandnurturehigh-potentialindividuals

•EnsureaCliffssuccessionplan

Cliffsprovidesitsemployeeswithmeaningful,practicalandrelevantpoliciesand

trainings.Toensurewearemeetingouremployees’expectationsandhelpingthem

realizetheirfullcapabilities,nearly100%ofoursalariedemployeesreceivesometype

ofregularperformanceandcareerdevelopmentreviews.

Weoffertraininganddevelopmentprogramssuchascomprehensivesafetytraining,

operationalexcellence,leadershipbasics,LeadingtheBusiness,Advancingthe

Business,MaintenanceApprenticeship/Certification,CodeofBusinessConductand

EthicsaswellasanonlinelearningsystemknownasCliffsCollege.

Note:Cliffscontinuestofollowupontheremaining1%-largelyemployeesonleaveatthetime ofroll-out

Weredoubledourleadershipdevelopmenteffortsbyundertakinganexerciseto

identifyhighpotentialemployeesandmapthemtoleadershipcompetencieswewill

needinthefuture.Anewadditionto2010includedthefirstannualSeniorLeadership

Summit,whichbringstogetherCliffs’seniorleaderstolearn,collaborateandshare

bestpractices.Finally,wecompletedasuccessionplanningexerciseinorderto

identifypotentialsuccessorsforallofourkeypositions.Allofthesedevelopments

helpusprepareouremployeestomeettheneedsofthebusinessaswecontinueto

executeourglobalstrategy.

CODE OF BUSINESS CONDUCT AND ETHICS TRAINING (includingsubstantivesectionsrelatingtoantitrust,anti-corruption,conflictsofinterestandinsidertrading)

TotalSalaried Employees

Participating Employees Percentage

MANAGEMENT 534 529 99%NON MANAGEMENT 1,152 1,144 99%TOTAL 1,686 1,673 99%

30

SHAREDBENEFIT:INVESTINGINTALENT

Wegoaboveandbeyondthelegaltrainingrequirementstoensureour

workersreceivepremiumopportunitiesandpreparationforacareerat

Cliffs.Becauseoftheadditionalhands-ontrainingourminersreceive,

ournewhiresworksaferandaremoreproductivethanemployeeswho

onlyobtaintheminimaltrainingprescribedbylaw.

CliffsAcademy,whichhasoperationsatbothPinnacleandOak

Grovemines,hastrainedhundredsofnewminersfromthelocal

communities.Webelievethistrainingprovidesvaluabletalent

developmentthatisveryimportantforasuccessfulcareer.

•InAlabama(OakGrove),inconjunctionwithBevillStateCommunityandTechnicalCollege,prospectivenewminersaretrainedovera5-weektimeperiod,notonlysatisfyingtheState’s40-hourtrainingrequirement,butprovidinganadditional4weeksofhands-ontraininginCliffssafetyandoperationalpractices.

•InWestVirginia(Pinnacle),the5-weeknewminercourseistaughtatCliffs’owntrainingfacilityandsurpassestheState’s80-hournewminertrainingrequirements.

Traineesinbothprogramsreceiveastipendfortravelandother

incidentalcosts.Thestipendprovidesthemwiththeabilitytoleave

jobswithlessopportunityforadvancementwhilereceivingtrainingat

CliffsAcademy.Thisaddedbenefitincreasestheeaseandtransitionto

bettereconomicandsocialopportunity.

TANGIBLE VALUE INTANGIBLE VALUE

For Cliffs • Higher Productivity

• Better Safety Performance

• Better Access to Potential Workers

• Viewed as Employer of Choice

For Others • Job Training

• Financial Gain

• Increased Confidence and Optimism

31

COMPENSATION AND BENEFITS

WevalueouremployeesandtheirdedicationtoCliffs’growthandsuccess.Cliffs

continuestoattractandretainintelligentandtalentedindividualswhoaregrounded

incommonvalues.Throughourcompetitivecompensationandbenefitspackages,as

wellasourtraininganddevelopmenteffortsandafocusoncreatingastimulatingand

engagingworkenvironment,ourturnoverratehasdecreasedto6.3%1.

Celebratingsuccesses...stresstraininganddevelopment...aneffectiveappraisalofperformance...expressingasimplethankyou.

CliffsCoreValue:

Recognize& Reward

Achievement

•Medical,dentalandvisioncoverage

•Disabilityandlifeinsurance

•Pensionplans

•Flexiblehealthspendingaccount

•EmployeeAssistanceProgram toaddresspersonaland familyissues

•Educationalbenefitssuchaseducationalreimbursementandmatchinggifts

•Professionalmembershipreimbursement

*Additionalinformationcanbefoundinthe“Careers”sectionofCliffs’corporatewebsite,www.cliffsnaturalresources.com

BENEFITS*

1 Calculatedbydividing2010turnoverbytheaveragenumberof2009and2010fulltime employees(FTEs)

32

TURNOVER2010

2010 2009 2008

AUSTRALIA 19 23 53UNITED STATES 188 349 261CANADA 40 50 64COMPANY-WIDE 247 422 378

CLIFFSWORKFORCEASOFYEAR-END2010

Male Female Total

EXECUTIVE 15 1 16MANAGEMENT 630 88 718ADMINISTRATIVE 777 260 1,037PRODUCTION (HOURLY) 4,554 178 4,732TOTAL (EXCLUDING BOARD) 5,976 527 6,503

COMPARISON OF AVERAGE SALARY BY GENDER AND JOB CATEGORY (USD)

MaleSalary FemaleSalary FemaleasaPercentageofMaleSalary

EXECUTIVE $358,935 * *MANAGEMENT $110,188 $103,921 94%ADMINISTRATIVE $68,119 $57,148 84%HOURLY $53,531 $51,525 96%

*Thereisonlyonefemaleinexecutivelaborcategorysoaveragesalaryisnotprovided.

33

COMMUNITYVALUE

34

MANAGEMENT APPROACH

Thestrengthoflocalcommunitiesandourrelationshipwiththemareofparticular

importancetothewayweoperateacrosstheglobe.ForCliffsthismanifestsitselfin

manyways–thewayweresponsiblyoperateinandtransparentlyengagewithour

communitiesthroughcommunityoutreachandinvolvement,ourcommitmenttosocial

investmentandourrespectfortherightsandculturesofeverycommunity,particularly

theindigenouspeoplesofAustraliaandtheFirstNationsofCanada.Engagingwith

andgivingbacktoourcommunitieshasbeenpartofourcommonvaluessinceearlyin

theCompany’shistory.

Localcommunitiesandneighbors’opinionsarecriticaltoCliffs’decision-making

processinallaspectsofouroperations.GiventheCompany’srecentgrowth,weare

havingtoengagewithnewcommunitiesinnewsettings,andrecognizethereisreal

valueinmeaningfulcommunityengagement.Ourcorporatecitizenshipeffortsreinforce

theCliffsapproachofhavingapositiveimpactinthecommunitieswhereweoperate.

Cliffsperformsassessmentsonourminingandexplorationactivitiestoensurewe

enterandexitcommunitiesinaresponsiblemannerandcommunicateopenlyand

effectivelywhileworkingwiththecommunity.Weworkcollaborativelywithlocal

communitiesandregulatorstoestablishrelationshipsandsupportactivitiesthatareof

mutualbenefittoCliffsandtothecommunity.AnexampleofCliffs’collaborationisthe

relocationofHighway53inMinnesota.

Openaccesstoinformation...constructiveconflict...delegationtotheappropriatelevel...tolerationoffailureinpursuitofbusinesssuccess...encouragingandacceptingdifferentviews...feelinganobligationtoexplainyouractionstothoseaffected...genderandracialdiversity.

CliffsCoreValue:

Trust,Respect&Open

Communication

PARTNERINGWITHTHECOMMUNITY:RELOCATIONOFHIGHWAY53

InMay2010,ourUnitedTaconitemineandRGGSLandandMineralsjointlydelivered

a“NoticeofTerminationofPublicHighwayEasement”totheStateofMinnesotafor

landadjacenttoUTAC’sThunderbirdMineinEveleth,Minnesota.Underthetermsof

thiseasement,theStateofMinnesotaisrequiredtovacateaportionofUSHighway

53toallowUTACaccesstomineralresources.ItistheresponsibilityoftheMinnesota

DepartmentofTransportationtoremovethisportionoftheexistingcorridoranddevelop

anewhighwayalignment.AsCliffsstrivestogainaccesstotheseresources,itisalso

importantthatthepublicmaintainproperaccesstolocalroadways.TheMinnesota

DepartmentofTransportationhasdevelopedthefollowinggoalsforthisproject:

•Cost-effectiveness

•Timelyandsounddecision-making

•Maintainingsafeandefficienthighwayandcommunityconnections

•Avoidingorminimizingvariousnegativeimpacts

•Avoidingunacceptablehighwaymineconflictsintothefuture

Cliffsisworkingdiligentlyandcooperativelywiththeinvolvedstateagenciesand

lawmakersandaffectedcommunitiestoensurethattherealignmentofHighway53is

completedinanappropriatetimeframe,providesmaximumbenefittothesurrounding

neighbors,andallowsforcontinuedmineraldevelopment.

35

CRISIS MANAGEMENT

Unfortunately,ourcommunitiesandoperationsaresometimesaffectedbynatural

disasterorotherunforeseenevents.Cliffs’crisismanagementplanshelpensurewell-

thoughtoutproceduresareinplaceintheeventourcommunitiesandoperationswere

tobeaffected.Crisismanagementincludesdevelopmentofplans,proceduresanda

teamateachsitetoleadtothecrisisresponse,andincludesrunningsimulationsand

testingthesystems.2010workoncrisispreparednesswillcontinuewithadditionalcrisis

plansbeingdevelopedatCliffs’sitesin2011.

•Whilenotoccurringin2010,theApril2011tornadothatstrucktheCliffsOakGrovecoalmineinAlabamademonstratedthevalueofCliffsresponsepreparedness.Allemployeesweresafeandarapideffectiveemergingresponsewasputineffectimmediately.

Whendevelopingtheseplans,Cliffsworkswithathird-partyproviderandlocalsite

management.Eachsiteisconsideredforitsuniqueness.Eachsiteplanisreviewed

3-4timesperyearatwhichtimerecenttrends,industry-wideincidents,andpersonnel

changesaretakenintoconsideration.

ACCESS TO NATURAL AREAS

Asagoodcorporatecitizen,Cliffsprovidespublicaccesstosomenaturalareasthatare

notbeingutilizedforoperationsandthatmaybebeneficialtoourcommunities.Aswe

enterintonewlocations,weacknowledgetheimportanceofourhabitatpreservation

effortsbyproducingpublicaccesstotheselandswhenpossible.Bycaringfornatural

areas,weareabletoprovidecommunitymemberswithlandsforno-orlow-costutility

easements,recreationalleases,roadwaysandresidentialsites.Withineachoperating

site,wecarefullyconsiderareasfromwhichthepublicmaybenefit.

36

HUMAN RIGHTS

CliffsHumanRightsPolicy,informedbytheUnitedNationsUniversalDeclaration

ofHumanRights,illustratesourcommitmenttorespectinghumanrightslaws

andregulationsofthecountriesinwhichweoperate.Addressinghumanrightsin

ourbusinessapproachisanessentialpartoftheCliffscommitmenttocorporate

citizenship.

Cliffsvaluesandenforcesinternationalstandardsforhealthandsafety,banstheuse

offorcedorchildlaborwithinCliffsanditsthirdparties’operations,providesequal

employmentopportunityandprohibitsanytypeofdiscriminationandharassment

intheworkplace.Cliffsupholdshumanrightspoliciesinourcorporateandlocal

purchasingdecisionsandextendsourcommitmenttoouremployees,supplychain

andindigenouspeoples.

In2010,wedidnothaveanyriskforincidentsofforcedorchildlabororinterference

withfreedomofassociation,collectivebargaining,orindigenouspeoples’rights.

INDIGENOUS PEOPLES

AlignedwithCliffsHumanRightsPolicyisthefairconsiderationofindigenous

peoples.Giventheincreasingglobalizationofouroperations,Cliffs’relationships

withlocalpopulationsareessentialforcorporatecitizenship.Aspartofourefforts,

wecontinuetoestablishandfosterourrelationshipswithindigenouspeoples.Our

proposed,mutuallybeneficialagreementswithsuchgroupscreateculturalawareness,

establishesafoundationforeconomicindependenceinthecommunities,and

educatesusontheresponsibilitiesassociatedwithculturallysensitiveheritagesites.

In2010,theFirstNationscommunitieslocatednearourproposedChromiteoperation

havebeenanimportantfocusinthatproject.WecontinuetoengagewiththeFirst

Nationscommunitiesinaproactivemannertoshareinformation,learnandbetter

understandtheirinterestsandengageinrespectfulandconstructivedialogueand

planningrelatingtotheproject,andwillcontinuetodosoastheprojectprogresses.

Asweenterintotheenvironmentalassessmentphase,wearelookingforwardto

continuedengagementwiththelocalFirstNationsandMetis(indigenous)communities.

CliffsiscurrentlyworkingtowardformalizingengagementprocesseswithFirstNations

Communitiesandexpectstodosoin2011.Thisinputisvaluablenotonlyforthe

environmentalassessment,butalsoforenvironmentalstewardshipinthearea.

37

2010CLIFFSCARESDAY

Cliffs’corporateofficeinClevelandinitiatedaCommunityOutreach

Committeeinanefforttoexpanditsvolunteerismandoutreachin

theGreaterClevelandArea.TheCommitteeidentifiesandorganizes

volunteeropportunitiesforemployeecommunityinvolvement.

Theinaugural“CliffsCaresDay”leveragedthetalentandpassion

ofmorethan100Cliffsemployees.WelentassistancetoLaura’s

Home,anemergencyshelterwithalong-termclientdevelopment

programfocusedonhealingandpersonaldevelopment.Cliffs

employeesspentthedaypainting,staining,cleaning,landscaping

andparticipatinginminorconstructionimprovements.Inaddition

tothehardwork,theCommitteesponsoredadonationdrivewhich

providedmuch-neededpersonalhygieneitems,clothing,andtoysfor

theresidentsofLaura’sHome.

SOCIAL INVESTMENT AND ENGAGEMENT

ThroughtheCliffsFoundationandourlocaloperationsefforts,Cliffs

supportscommunityandregionalinitiatives.TheFoundationfocuses

onfourprimaryareasofbenefittoourcommunities:education,health

andhumanservices,culturalresourcesandcivic-relatedprojects.In

additiontogivingbacktoourcommunitiesfinancially,Cliffsengagesin

communityoutreachtodrivesharedbenefit.

PHILANTHROPIC APPROACH

Cliffssupportslocalcommunitieswithcontributionsmadethrough

threedistinctavenues:TheCliffsFoundation,UnitedWayandfacility-

baseddiscretionarygiving.

TheCliffsFoundationsupportseffortsaimedatenhancingthelives

ofthoseinthecommunitiesinwhichweoperate.Ourdirectandpro

bonocontributionsmakeadifferenceinthecommunitieswherewe

haveoperations.

$1,171,639CLIFFS FOUNDATION $671,415

LOCAL CONTRIBUTIONS

(ExcludesUnitedWay)

$574,691UNITED WAY

(NORTHAMERICA)

MAJORCHARITABLECONTRIBUTIONS2010 (USD)

EDUCATION(MATCHINGGIFTS)

EDUCATION(DIRECT)

CIVIC

CULTURE

$651,761

$340,250

HEALTH AND HUMAN SERVICES

$67,128

$56,700

$55,800

CLIFFSFOUNDATION2010 (bycategory)

38

SHAREDBENEFIT:SUPPORTINGEDUCATION

Cliffsvaluesqualityeducationtohelpprepareyouthwithinourcommunities

fortheirfuture,apriorityforCliffsbecausenotonlyaretheyanextensionof

ouremployees’families,buttheyarealsotheworkforceofthefuture.

Cliffsengagesinvariouseducationinitiativesatlocalschoolswithin

theminecommunitiesincludingpublicandschoolgroupminetours,

jobshadowingandteacherworkshops,environmentalfairsandnews

mediastories.Somerecentexamplesinclude:

•OurWorkExperiencePrograminAustraliaprovidesopportunitiesfortententhgradestudentsandthreeteacherstoexperiencelifeasaminerforoneweek.Studentslearnabouttheindustryandminingoperationpractices–fromexplorationanddrillingtoexportactivities–andareabletoworkwithacareermentor.

•WiththeWyomingCountySchoolDistrict,local4-HClubsandSouthernWestVirginiaCommunityCollege,weareworkingwithfederal,stateandlocalagenciestodesignandconstructanoutdoorenvironmentalclassroom.

•OurPinnacleMineteamedwithTheAmericanChestnutFoundation,TheOfficeofSurfaceMiningandReclamation’sAppalachianRegionalReforestationInitiativeandtheEasternCoalRegionalRoundtabletoassistmorethan100areastudentsinplanting600blightresistanthybridAmericanChestnutsandmorethan6,000nativeWestVirginiahardwoodtrees.Theprojectincludedpresentationsontheevolutionofacceptedsurfaceminereclamationprocedures,theireffectsontheareaandeffortstoreintroducetheAmericanChestnutinAppalachia.

Wealsofundprogramswhichprovidelifeandrecreational

opportunitiestohelpbalancethelivesoftheyouthinourcommunities.

•ToencouragehealthymealsforstudentsnearourWabushmines,CliffssupportsSept-ÎlesElementarySchoolandMenihekHighSchoolsoupkitchenprogramswith$15,000and$3,000,respectively.

•InAustralia,wefundprogramssuchastheSwimAbilityProgram,whichprovidesafterschoolswimminglessonstochildrenwhohavelimitedabilities–allowingtheprogramtorunyearroundregardlessoffamilyabilitytopay.

Whetherweareprovidingindustryandcareerinformationorknowledge

onvariousCompanyprogramssuchasthoserelatedtoenvironment

orsustainability,westrivetohelpeducatefuturegenerations.Through

theseeffortsCliffshelpsgrowtheworkforceofthefutureandmining

professionals,providingsupporttotheviabilityofourcommunities.

TANGIBLE VALUE INTANGIBLE VALUE

For Cliffs • Better Qualified Workforce from Which to Draw Employees

• Improved Retention

• Community Goodwill

• Reputation Enhancement

For Others • Financial Benefit to

the Community and

Education Institutions

• Community Reputation, Ability to Attract Additional Jobs

ENVIRONMENTAL VALUE

40

MANAGEMENT APPROACH

Asacorevalue,environmentalstewardshipisexpectedofourstaffandmanagersat

alllevels.Responsiblemanagementofourenvironmentalimpactshasbeenpracticed

acrossourglobaloperationsthroughoutour164-yearhistory.Cliffs’environmental

performancehasbeenessentialtothesuccessofourprojectsandistheplatformon

whichwecontinuetoexpandandgrowasacompany.

EnvironmentalStewardshipissupportedbyour:

•CodeofBusinessConductandEthics

•ClimateChangePolicy

•GreenhouseGasStrategicPlan

•EnvironmentalPolicy

•EnvironmentalComplianceAuditingPolicy

•EnvironmentalReservesandSarbanes-OxleyEnvironmental DisclosureProcedures

•CorporateSpillReportingProcedure

•CorporateOzoneDepletingSubstancesProcedure

Ourcommitmenttoenvironmentalperformanceandstewardshipisreinforcedthrough

ourenvironmentalgoals.Oureffortshavebeenrecognizedbyothers,includingthe

MaplecroftClimateInnovationIndexandrecognitionontheGlobal1000Sustainable

PerformanceLeaders.

Goingbeyondcompliance...beingsociallyresponsible...anticipatingandaddressingpotentialimpactsbeforetheyoccur...personalaccountability...operatingtopreservetheenvironmentforfuturegenerations.

CliffsCoreValue:

EnvironmentalStewardship

41

ENVIRONMENTAL GOALS

Cliffs’environmentalgoalsareorganization-wideand

coverthefollowingtopics:

•Meetingandexceeding environmentalregulations

•Partneringandcommunicating withstakeholders

•Managingclimatechangerisks andopportunities

•Integratingsustainablelandpractices

•Reducingouroverallenvironmentalfootprint

Cliffsestablishedtargetsandobjectivesaround

environmentalperformancein2010andcontinuesto

makeprogresstowardsthesegoals.Thesetargetsand

objectivesareembeddedthroughouttheEnvironmental

Valuesectionandareidentifiedbyspecificicons,

indicatingthestatusofthatgoal:

ON TARGET

ACHIEVED

BEHIND TARGET

42

EnvironmentalStewardshipisembeddedintoourbusinessprocesses,policiesandour

managementpractices.Throughourcreativesolutionsandsoundscienceapproach,

Cliffsworksside-by-sidewithvariousagenciestoproactivelyaddressnewandemerging

regulations,manageenvironmentalperformance,andmaintaintransparency.

Oursystematicapproachtomonitoringourenvironmentalperformanceandmaking

improvementsincludesroutinelyconducting:

•Third-partycomplianceauditsatallCliffsoperatingsites

•ISO14001registrationauditsandinternalfacilityself-assessments atalloperatingsiteswithcertifiedEnvironmentalManagement Systemprograms

•Quarterlyreviewsonmaterialenvironmentalissuesandenvironmentalreserves

Wehavemadeacommitmenttoimplementingenvironmentalmanagementsystems

(EMS)inallofouroperations.OnehalfofourfacilitieshadimplementedEMSbythe

endof2010withPinnacle,OakGroveandWabushontargetfor2011implementation.

Asweintegrateacquisitionsandexpandourbusinesswewillcontinuetoupgrade

environmentalprogramsinthesefacilitieswithcertifiedEMSprograms.

Aspartofourenvironmentalefforts,weengagewithCliffs’employeesandlocal

communitiesthrougheducation,trainingandawareness(seeCommunitysection).The

moreweresearch,learnandshare,themorewecangrowresponsiblyandbenefitour

communitiesandtheenvironment.

Manyofourenvironmentaleffortsarebeneficialnotonlytoourlocalhabitats,but

alsotoourcommunities.ByengagingwithFirstNationsandindigenouspeoples,we

areimprovinginlandmanagementbestpracticesandminedevelopmentinCanada.

Throughourreclamationefforts,wehavecreatedtheRepublicWetlandsPreserve

inMichigan,allowingpublicaccesstonaturalareasandrestoredwildlifehabitats.

Managingourimpactshasalsobeenakeyfocusarea.Whetherenergy,emissions,

waterormaterials,Cliffscontinuestolookforcuttingedgepracticestoreduce

ourfootprint.

Cliffsspent$63.5milliononenvironmentalprotectionexpendituresin2010,and

experiencedadecreaseintheamountchargedforenvironmentalfines.

GOALEnvironmentalEducation

TARGETDevelopsite-specificenvironmentaleducationoutreachprograms.

STATUS

Achieved

GOALTrainingandAwareness

TARGETContinueenvironmentaltrainingandawarenessatallofCliffs’operations.

STATUS

Achieved

GOALEnvironmentalManagementSystems(EMS)

TARGETPursuecertificationofEMSatfacilitieswithoperationalcontrolbytheendof2011.

STATUS

On Target

ENVIRONMENTAL EXPENDITURES AND FINES

2010 2009 2008

NUMBER OF NON-MONETARY SANCTIONS 4 1 1NUMBER OF DISPUTE RESOLUTION SETTLEMENTS 1 0 0VALUE OF SIGNIFICANT FINES (>$100,000) $0 $125,000 $0

43

KEYSUCCESSESANDCHALLENGESIN2010

AsCliffsstrivesforcontinuousimprovement,wewereabletoproduce

proactivesolutionstosomeofourkeyissuesin2010.Ofparticularnote

arethefollowingsuccessesandongoingchallenges:

•OurmajorChromiteprojectinOntariofacessubstantialpermittingobstaclesbeforeitwillbebroughtintooperation.Asameansofstreamliningtheprocess,Cliffswasthefirstminingcompanytovolunteerforthemoststringentassessmentprocess—afull,individualcomprehensiveenvironmentalassessment.Indoingso,Cliffsbelievestheopenanddetailedreviewwilldirectlyaddressstakeholderconcernsandavoidpotentialassociateddelays.

•LoganCountyCoalintegration—CliffsstrategicallyplannedtheintegrationoftheformerINRfacilitiesintoCliffsenvironmentalgovernancepoliciesandpractices.ThispurchaserepresentsasignificantincreaseinminepermittingactivitieswheretheregulatoryenvironmentforreceivingpermitsforundergroundaswellassurfacecoalfacilitiesinAppalachiahasbecomeextremelydifficult.Thepermittingofsuchfacilitieswillrequirecarefulplanningandcoordinationwithexistingmineengineeringstaff.

•In1973,theStateofMinnesotaincorporatedasulfatewaterqualitystandardof10mg/L.Thestandardwasintendedtoapplytowaterusedforproductionofwildriceduringperiodswhenricemaybesusceptibletodamagebyhighsulfateconcentrations.However,withtheexceptionofonenon-miningindustrypermitin1975whichincludedalimitof40mg/L,thestatehasneverimplementedthestandard.Now,asthestateofMinnesotapreparestoimplementthestandardwithoutupdatedsoundscience,itremainsunknownhow,andtowhatextent,theruleswillbeapplied.Withstatelegislatorsandindustrypartners,Cliffsisparticipatinginacooperativeapproachtodevelopsoundscienceinsettingnewappropriatestandards.

•Seleniumcontinuestobeakeyaqueouscontaminantofconcern.Pinnacle,Empire,andTildenMinesareallfacedwithlowerseleniumeffluentlimits.ProactivesolutionshavebeendevelopedinWestVirginiaasoutlinedlaterinthisreport.

•AnotherimportantanddifficultobjectivewasachievedbyUTAC’sGreenProductionProject,whichprovidedacreativesolutiontoresolvepermittingconstraintsandincreaseproduction.TheprojectwillredesignthefacilityforlowersulfurfuelsandsubstantiallyreduceNOx regionalhazeemissions,avoidingcostly(over$40million)emissioncontrolsforBARTRegionalHaze,aswellasremovingdifficultpermittingconstraintsonincreasedproduction(uptoapproximately15%).

•InNovember2009,CliffsAsiaPacificIronOre(APIO)enteredintoavoluntaryagreementwiththeWesternAustraliaDepartmentofEnvironmentandConservation(DEC)toimprovetheinformationbaseandon-the-groundcapacitytomanagethenaturalenvironmentintheenvironmentallysensitiveNorthernYilgarnregion,wheretherearelargeprovenreservesofhigh-gradeore.Ithasbecomeamodelofcollaborationamongalargeofarrayofdiversestakeholdersthathasresultedinabalancedapproachtominedevelopment.Cliffsiscapturingeconomicreturnsfromneworeproductionwhileprotectingthenaturalenvironmentandcontributingtoregionalandsocialeconomicdevelopment.

Allofoursolutionsrequireastrongreputationandsoundagency

andpublicrelations.Maintainingstrongpositiverelationshipswith

regulatoryagencies,industryassociations,andthepublicare

keyelementstosuccessfullynavigatingandcommunicatingthe

environmentalissuesfacedbyCliffs.Thesevoluntaryeffortsand

transparentcommunicationexemplifyCliffs’commitmenttothecore

valueofEnvironmentalStewardship.

44

LAND STEWARDSHIP

Responsibleuseandmanagementoflandarevitaltoourcontinued

successandsociallicensetooperate.Workingcooperativelyand

maintainingtransparentrelationshipsduringdevelopmentallowsusto

collaboratewithagencyandcommunitystakeholderstodevelopand

expandouractivitiesinamannerthatreinforcesourcommitmentto

responsibleoperation.

MINEDEVELOPMENT–CHROMITEPROJECT

Cliffs’continuedattentiontominedevelopmentandenvironmental

stewardshipin2010wasbestillustratedthroughtheongoingeffortsof

theChromiteProject.TheChromiteProjectisamajorminedevelopment

inNorthernOntariothatwillcapturetheattentionofnumerousinterested

stakeholders.GiventhesignificanceofthedevelopmenttoOntario,

FirstNationscommunitiesandothers,Cliffsvolunteeredforthemost

stringentenvironmentalreviewprocess,thefirsttimeaminingcompany

hasevervolunteeredforajointfederalandprovincialcomprehensive

environmentalassessment.In2010,thepreliminaryprojectworkfocused

onbaselinemonitoringattheminesite,environmentalassessment

planning,andprojectdescriptiondevelopment.

BASELINE MONITORING

Cliffsbegancomprehensiveminesitebaselinemonitoringinthespring

of2010toexaminehydrogeology,hydrology,geochemistry,water

quality,sedimentquality,geology,airquality,light,noise,meteorology,

aquaticandbenthicorganisms,terrestrialanimals,vegetation,

aboriginalandnon-aboriginalcommunityprofiles,andpreliminary

culturalresources.

Cliffswillcontinueminesitebaselinemonitoringforanadditionalthree

years.In2010,preliminaryworkplansforbaselinemonitoringalongthe

integratedtransportationcorridorandferrochromeproductionfacility

weredeveloped,withmonitoringcommencinginthespringof2011.

ENVIRONMENTAL ASSESSMENT

Discussionswereheldin2010withmultiplefederalandprovincial

agenciestodevelopastrategyforacomprehensive,integrated

processthatwouldsatisfyfederalandprovincialrequirements

andprovideampleopportunitiesforFirstNationsandpublic

participation.Documentswhichdescribedajointfederalandprovincial

ComprehensiveEnvironmentalAssessmentprocessweredeveloped

in2010andsubmittedin2011.

PROJECT DESCRIPTION

Workbeganondevelopingtheprojectdescription,whichisanimportant

documentthatissubmittedtofederalandprovincialagenciesandis

usedtoevaluateenvironmentalassessmenttriggersandtheagencies’

regulatoryobligations.Agencycommentswereincorporatedintothe

finalprojectdescription,whichwassubmittedin2011.

TRADITIONAL ECOLOGY KNOWLEDGE STUDIES

Cliffsrecognizesthesignificantandhistoricalconnectionbetween

Aboriginalpeopleandtheirtraditionallands.Cliffshopestogainthe

trustandrespectofAboriginalpeopleandisworkingwiththemtohelp

ensuretheywillhaveameaningfulandactiveroleintheEnvironmental

Assessment(EA)process.AkeycomponentoftheEAwillinvolve

gatheringtraditionalecologicalknowledge(TEK)andtraditional

landuseinformation.Cliffsintendstoactivelyengageandemploy

FirstNationsmembersingatheringTEKandtraditionallanduse

information.CliffswillincorporatethisinformationintotheProject’sEA.

SUSTAINABLE FOREST MANAGEMENT

In2009,weestablishedaformalsustainableforestmanagement

programthatbenefitsournon-mininglandsinNorthAmerica.We

areauditingtheseforestlandstogeneratetimberstandmapping

andevaluatethecurrentstatusofourforests.Throughourworkwith

forestryconsultants,wehopetoestablishaplanwhichwillprovide

sustainabletimbergrowthandharvestforthelongterm.

Oureffortshavealreadyenrolled16,000acresinMichigan’s

CommercialForestReserveforover20years.In2010,weenlistedthe

helpofAmericanForestManagement,Inc.toauditthoselands,revise

allmapsandupdateourinventoryandmanagementplan.Additionally,

wehavedevelopedforestmanagementplansforthetimberlandsat

ourUnitedTaconiteandHibbingTaconitemines.UnitedTaconitenow

hasover900acresenrolledunderMinnesota’sSustainableForest

InitiativeAct.HibbingTaconiteisintheprocessofenrollingover

12,000acresinthesameprogramin2011.AtUnitedandHibbing,

respectively,thebenefitsfromourcommitmenttosustainablymaintain

forestlandswillassureahealthyforestenvironmentandrenewable

resourcesformanyyearstocome.

45

PRESERVING AND RECLAIMING HABITATS

Throughreclamationefforts,weareabletosharethebenefitofpost-closurelands

withourcommunitymembersandwildlife.Atourdevelopingoperationswebegin

projectswiththeendinmindandplanforresponsibleclosure.Ourformalminingand

reclamationplanstakeintoaccountmineralextraction,currentanddesiredlandforms,

waterresourcesandmanagement,plantandanimallife,andourneighborsand

communities.

Cliffsensuresthatitsongoingoperationsminimizelong-termlandscapeimpactsthrough

reclamationofstockpiles,tailingsbasinsandotherminesitefeatures.Wewillgobeyond

federal,regionalandstateregulationswhichgovernreclamationofminedlandsby

turninglandsintoforestareas,grassyplainsorwetlandpreserves.

Entering2010Cliffs’operationalfootprintwas541.24km2ofland.During2010the

footprintexpandedto543.22km2,whichisattributedtheexpandedfootprintourmines,

stockpiles,haulroadsornewbuildings.

GOALReclamationwithNativeSpecies

TARGETIdentifyandchampionsite-specificnativespecieswithinreclamationprograms.

STATUS

Achieved

WETLAND MANAGEMENT STATISTICS

2010 2009 2008

WETLANDS IMPACTED (km2) 0.00 0.00 0.09WETLANDS MITIGATED (km2) 0.17 0.00 0.09DELINEATED WETLANDS WITHIN PERMIT TO MINE BOUNDARY (km2) 12.4 12.4 12.4

AMOUNT OF LAND DISTURBED OR REHABILITATED

2010

OPENING BALANCE (km2) 541.24NEWLY DISTURBED (km2) 2.37NEWLY RECLAIMED (km2) 0.39CLOSING BALANCE (km2) 543.22

46

CHAMPION SPECIES

Eachofouroperatingsiteshasidentifiedauniquenativespecies

tochampionwithintheirreclamationprograms.Integrationofthese

speciesintoreclamationeffortsismeanttohelptheirreestablishment

inlocalhabitats.

ASIA PACIFIC IRON ORE

Champion Specie(s): Regional flora

Efforts:Environmentalimpactassessmentsfornewminesat

KoolyanobbingandMt.Jacksondefinedbiodiversityareasfor

protection.Wasterocklandformsandinfrastructureassociatedwith

thesedevelopmentswillbepositionedsoastoavoidhighervalue

biodiversityareas.Fieldtrialswereestablishedtotestwhethertherare

floraspeciesRicinocarpos breviscanbeestablishedbydirectseedingintoremediationareasatWindarling.Inavoluntarypartnershipwiththestate

environmentalagency,wecompletedaregionalwildfirethreatanalysis,

aMalleefowl(nativebird)populationviabilityanalysisandregionalflora

fieldsurveystargetingspeciesofconservationsignificance.

EMPIREANDTILDEN,NORTHAMERICANIRONORE

Champion Specie(s): Red Oak and White Oak

Efforts:In2010,Cliffs’Michiganoperationsplanted8,040redoak

trees.Weanticipateadditionalplantingsofbothredandwhiteoaksin

2011.Also,ourTildenminemitigated2.1acresofwetland,offsetting

anyimpactontheenvironment.

HIBBING,NORTHAMERICANIRONORE

Champion Specie(s): Red Pine and White Pine

Efforts:Aspartofanannualtreeplantingevent,Hibbingispartnering

withlocalnon-profitgroupstoplant10,000seedlingsonreclaimed

stockpiles.Hibbingcontinueditsvegetationmonitoringeffortsforboth

onsiteandoffsiterestoredwetlandsandisawaitingfinalregulatory

agencyapprovalforanumberofwetlandsitesthathavecompleted

therequiredvegetationmonitoringinpreviousreportingyears.We

areactivelypursuingseveralonsitewetlandcreationprojects,with

approximately272acresofwetlandcreditsanticipated,whichmay

varypendingcompletionofregulatoryagencyfinalapprovals.

NORTHSHORE,NORTHAMERICANIRONORE

Champion Specie(s): Eastern White Pine and Wild Columbine

Efforts:Plantinglocationstobeidentifiedin2011.

OAKGROVEANDPINNACLE,NORTHAMERICANCOAL

Champion Specie(s): American Chestnut

Efforts:In2010,600AmericanChestnuttreeswereplantedatthe

Pinnaclesite.

UNITEDTACONITE(UTAC),NORTHAMERICANIRONORE

Champion Specie(s): American Chestnut

Efforts:In2010,UTACreceivedaninnovationgrantfromIronRange

Resourcestoexperimentwithstockpilereclamation,whichincluded

seedingandplantingreclamationon2.5hectaresof1406stockpile.

Furtherexperimentationwithvaryinglandslopesandtreereclamation

willhappenin2011.TheFairlanePlantconductedfieldworktocreate

a16hectarewetlandonatailingsbasinin2010.Ourworkincluded

plantingandseedingofavarietyofnativewetlandplantspecies,

championingthemilkweedplant.Cliffswillmonitortheareafor

hydrologyandvegetationin2011.

WABUSH,CANADA

Champion Specie(s): Shining Willow

Efforts:Tobeaddressedin2011.

2010ICUN REDLIST SPECIES BY LOCATION AND TYPE (numberofspeciespresentintheareasinwhichweoperate)

CriticallyEndangered Endangered Vulnerable

Near Threatened

LowerRisk/NearThreatened

LeastConcerned NotListed DataDeficient

EMPIRE AND TILDEN1 2

HIBBING2

NORTHSHORE PLANT2

PINNACLE2

OAK GROVE4 6 2 1 6

AUSTRALIA1 1 9

LABRADOR/NEWFOUNDLAND1 2 5

QUEBEC1 3 3 4 11 9 1

47

2010 2010

2009 2009

2008 2008

48.36 1.08

30.62 1.03

44.69 0.97

TOTAL DIRECT ENERGY USE (milliongigajoules)

PER-UNITDIRECT ENERGY USE (gigajoulespermetrictonofproduction)

2010 2010

2009 2009

2008 2008

17.3 0.4

11.9 0.4

18.26 0.4

TOTAL INDIRECT ENERGY USE (milliongigajoules)

PER-UNITINDIRECT ENERGY USE (gigajoulespermetrictonofproduction)

ENERGY AND EMISSIONS MANAGEMENT

AsourCompanycontinuestogrowonaglobalscale,wemakestrides

inoureffortstomanageenergyandemissionsresponsibly.Duetoour

energyefficiencyefforts,conversionandretrofittingofequipment,aswell

aschangesfromincreasedawareness,wesavedatotalofapproximately

404,000,000gigajoulesin2010,whichisequivalenttotheenergyin

approximately63,000,000barrelsofoil.

CLIMATECHANGE/CARBONMANAGEMENTAPPROACH

Cliffscontinuestomonitorandmanageclimatechangeimpactswith

relatedemissions,energymanagementandefficiencyeffortsbecoming

increasinglyimportant.Ourcoretaconiteproductionbusinessactivity

isenergyintensiveandassociatedwithsignificantgreenhousegas

emissions,thereforeaffectingtheenvironment,ourshareholders,

customersandtheglobaleconomy.

•FoundingmemberofTheClimateRegistry

•WorkinggroupmemberoftheCoalMineMethaneProjectProtocolRevisionoftheClimateActionReserve

GOALGHGReductions

TARGETReduceour2008U.S.directGHGemissionslevelsby17percentby2020.

STATUS

On Target

GOALOzoneDepletingSubstances(ODS)

TARGETDeterminefeasibilityofimplementingacompany-widegoalandtimelinetoeliminateODS.

STATUS

On Target

GOALGHGReductions

TARGETDevelopsite-specificplansforoptimizationofGHGemissionsandenergyefficiency,renewablefueluse,andoffsetopportunitydevelopmentbytheendof2011.

STATUS

On Target

2010 7.90

2009 5.54

2008 7.96

3.38 4.52

2.23 3.31

3.60 4.36

GREENHOUSE GAS EMISSIONS (millionmetrictonsCO2e)

TOTALINDIRECT ENERGY USE DIRECT ENERGY USE Note:Explosives,refrigerantsandfugitivereleaseshavenotbeenincludedinGHGcalculations.GHGemissionsandenergyconsumptionfiguresofNorthAmericanIronOresitesarecalculatedusingfuelsourceinvoicedata,notproductiondata.

48

2008 3942008 394

2009 62

2010 370

COAL METHANE RECOVERED AND SOLD TO PIPELINE (thousandmetrictonsCO2e)

GREENHOUSE GAS STRATEGIC PLAN

Completedin2009,ourGreenhouseGasStrategicPlanaddressesour

businessrisksandopportunitiesandpositionsusasasectorleader.

Wehaveadaptedourbusinessimprovementprocesstoaccountfor

carboninourcapitalplanningandbudgetingprocess.Additionally,

wehaveidentifiedover500potentialenergy-relatedprojectstobe

evaluatedandplantoimproveouremissionsthroughinnovative

solutions.

Cliffsbelievesitisimportanttobetransparentinourapproachto

reportingourgreenhousegasemissions.Wevoluntarilymeasure,

independentlyverifyandpubliclyreportonourgreenhousegas

emissions.Mostofouremissionscomefromironorefurnacesand

kilns,coalthermaldriers,dieselminingequipment,andawholly

ownedpowerplant.Arangeofothersmallersourcescontributetothe

remainderoftheemissions.

Inadditiontoourreductiongoals,in2010wecommittedtocapturing

andselling350,000cubicfeetperday(CFD)offugitivemethane,

apotentgreenhousegaswhichisapproximately21timesmore

powerfulthanC02andisreleasedduringthecoalminingprocess.We

surpassedourgoalbycapturingandselling370,000CFD,whichnot

onlypreventedthismethanefrombeingreleasedintotheatmosphere,

butalsoprovidedauseforthemethaneasfuel.

Inundergroundcoalmines,oncethemininghasoccurred,theland

subsides,forminganareacalled‘gob’.Cliffsmanagesgobmethane,

whichisreleasedfromfracturedrockinlowconcentrationsandmust

beventedtopreventitfromleakingintoworkingareasofthemine.We

arecurrentlydevelopingaprojectatourPinnacleMinetooxidizethis

gasbeforeitisreleasedintotheatmosphere.Engineeringresources

weredivertedfromthisgobgasprojectinearly2011toaddress

devastationcausedbytornadoesatourOakGrovecoaloperations,

butCliffsisdedicatedtoresumingtheseeffortsassoonaspractical.

REGIONAL HAZE PREVENTION

Cliffsfrequentlycollaborateswithgovernmentagenciesandconducts

relevantstudiestoidentifywhichofouroperationscouldfurther

reducetheircontributiontovisibilityimpairmentinwildernessareas

andnaturalparks.Thetypeofemissionsthatouroperationscontribute

toregionalhazeareprimarilyparticulatematter(PM10andPM2.5),

nitrogenoxides(NOx)andsulfurdioxide(SO2).(SeeEnvironmental

Tableformoreinformation.)

Wecarefullyconsiderourimpactsontheenvironmentandlocalareas.

In2010,weestablishedgoalstoreduceouremissionslevels,which

shouldultimatelylessenCliffs’impactonregionalhaze.Specifically,

weimplementedshorttermgoalstoimproveemissionslevelsatUTAC

andSilverBayPower(partofNorthshoreMining).

Additionally,duetorequiredemissionreductions,ourUTACsite

waspermit-constrainedforNOxemissions,leavingmineexpansion

unfeasibleuntilwedevelopedasolution.Investinginredesigning

fuelsystemstohandletheburningofcleanersolidfuelsandbiomass

resultedingreenproductionefforts,emissionreduction,increased

productionandfuelflexibility.

GOALRegionalHazeResponse

TARGETAchievea10percentreductionofthecombinedSO2 and NOx emissionlevelsby2015froma2008baseline.

STATUS

On Target

GOALRegionalHazeResponse

TARGETImplementsite-specificprojections,includingareductionofapproximately2,100tons(1,911metrictons)ofSO2orNOxannuallyfromthe2006baselineatUnitedTaconitefacilities,and1,700tons(1,542metrictons)ofSO2 and NOx fromSilverBayPowerfacility.

STATUS

On Target

49

WATER MANAGEMENT

Cliffsrecognizestheimportanceofmanagingtheuseofoneof

nature’sfiniteresources—water.Weusewaterinmanyaspectsofour

operations,includingcontrollingfugitivedustandprocessingironore

intopellets.

Cliffsprimarilyutilizessurfacewater,suchaswaterfrombasins,wells,

riversandlakes.Cliffsalsousesgroundwaterfordrinkingwaterand

showersinMichiganandMinnesota.AtourPinnacleMineinWest

Virginia,waterisstoredforre-useinundergroundreservoirs.Atour

Asia-Pacificironoreoperations,groundwaterprovidesforallthesite

waterneedsinthedesertenvironment.

Cliffswithdrewatotalofapproximately260millioncubicmetersof

wateranddischargedapproximately416millioncubicmetersin

2010.Nearly611billioncubicmetersofwaterwasreused/recycled

atouroperations.

Watermanagementandconservationareimportantatallofour

operatingsites,butespeciallyinNorthAmericawhereironore

operationsuselargevolumesoffreshwater(severalthousandcubic

metersperday).Minedewateringrequiresremovinggroundwaterand

accumulatedprecipitationfromtheminingarea.Thisprocessallows

ustoeffectivelymineunderdryconditions,althoughlocalground

waterelevationsmayexperienceatemporarydecreasefortheduration

ofthedewateringprocess.

GOALDesertWaterEfficiency

TARGETAssesswaterefficiencyimprovementinAustraliaandimplementbusinessimprovementplansby2011.

STATUS

On Target

2010

2009

2008

256

299

316

TOTAL WATER USE (millionofcubicmeters)

2010

2009

2008

416

386

291

TOTAL WATER DISCHARGED TO SURFACE WATERS (millionofcubicmeters)

253SURFACE

2.3GROUND 0.9

MUNICIPAL

191TREATED PROCESS

WASTEWATER 58MINE WATER

167NON-CONTACT

COOLING WATER

2010WATERUSEBYSOURCE (millionofcubicmeters)

2010WATERDISCHARGEBYTYPE (millionofcubicmeters)

50

SOUND SCIENCE IN SELENIUM MANAGEMENT

Managingandreducingseleniuminlocalecosystemsisan

importantfocusatCliffs.Wehavesupportedandpromoted

independent,thirdpartyresearchanddevelopmentofsound

scienceinaddressingthisissue.

Inmanagingourwaterquality,weassessthereleaseofacceptable

levelsofselenium,anaturallyoccurringelementthatcanleachfrom

theearth’ssoilandrock.Whenaccumulatedinlargequantities,

seleniumhasthepotentialtocausereproductivefailuresinfish

population.In2009,wereportedonourwatermanagementstudies

atPinnacleMinetodeterminetheextentofseleniumlevelsandany

associatedenvironmentalimpacts.In2010,WestVirginiaannounced

newseleniumdischargelimits.Sincethattimeinaccordancewith

thenewlimits,Pinnaclehasimplementedasolutionthatresponsibly

managesthedischargeofseleniumconcentrations.

AtourMichiganoperations,wecontinuetodevelopsoundscience

inourseleniumrelatedresearchinordertoestablishappropriate

seleniummanagementtechniques.Muchofthescienceabout

seleniumandecologicalimpactsisstillbeingdeveloped,Cliffshas

reachedouttobothstateofficialsinMichiganandfederalofficialsat

USEPAtoseekconsensusoftheproposedwatermanagementand

ecologicalstudiesandsharingwhatwelearn,including:

•CharacterizationofseleniumconcentrationandflowsinwaterssurroundingEmpireandTildenmines

•Collectionandanalysisoffishfilletsfromstreamssurroundingouroperations

•Avianstudiestoassessthehatchsuccess,fledgingsuccessandseleniumexposureofareabirds

Thegoalofthisprogramistoensurethatthedischargesofselenium

areproperlycontrolledandthattheaquaticvertebratesareprotected.

Thisinvolvesdevelopingandimplementingaprogramofsource

identification,controloptions,andimpactdetermination.Early

resultsoftheongoingprogrampointtoopportunitiestorevisewater

management,increasewaterrecyclingandreduceoreliminate

dischargesatourMichigan-basedoperations.

51

MATERIALS STEWARDSHIP

Cliffsusesrawmaterialsandassociatedprocessmaterialsona

largescale.Asweusetheserawmaterialstomeetthedemandsof

ourglobalcustomers,wetakecaretotrackrecyclinganddisposal

ofwasteandoperatecautiouslytoavoidanyspillsorassociated

environmentalimpacts.

2010 2009 2008

TOTAL RAW MATERIALS

IRON ORE - CRUDE (metrictons) 90,813,721 56,640,744 89,873,678

COAL (metrictons) 2,010,081 1,578,674 5,316,606

BENTONITE (metrictons) 235,202 144,644 259,287

LIMESTONE (metrictons) 1,503,244 987,123 1,398,215

DOLOMITE 85,329 72,233 -

ORGANIC BINDER 1,331 939 -

PER-UNIT RAW MATERIALS (permillionmetrictonsofproduction)

IRON ORE - CRUDE (metrictons)

2,027,092 1,900,696 2,086,938

COAL (metrictons)

44,868 52,976 1,689,895

BENTONITE (metrictons)

5,250 4,854 6,021

LIMESTONE (metrictons)

33,555 33,125 32,468

DOLOMITE 1,905 2,424 -

ORGANIC BINDER 30 32 -

2010 2009 2008

TOTAL ASSOCIATED PROCESS MATERIALS

COAL FOR FUEL (metrictons) 1,032,573 774,507 976,987

NATURAL GAS (gigajoules) 12,017,797 8,885,343 13,386,426

GASOLINE (liters) 3,148,043 2,623,154 3,101,381

DIESEL FUEL (liters) 108,182,763 90,896,859 107,073,599

FUEL OIL (gigajoules) 28,702,782 27,126,033* 2,997,881

PER-UNIT ASSOCIATED PROCESS MATERIALS

COAL FOR FUEL (metrictons) 23,049 25,990 21,142

NATURAL GAS (gigajoules) 268,254 298,166 289,681

GASOLINE (liters) 70,269 88,025 67,114

DIESEL FUEL (liters) 2,414,794 3,050,230 2,317,060

FUEL OIL (gigajoules) 640,687 910,270* 69,613

*Restatedfrom2009report.

INNOVATION IN TAILINGS MANAGEMENT

AtourMichiganOperations,aswellasourMinnesota-basedHibbing

TaconiteandNorthshoreoperations,weareinnovativeinoureffortsto

reduceourlandimpact.TailingsfromourTildenminewouldtypically

covernearly3,000acres.Bystackingtailingsbasinsandemploying

upstreamconstruction,weareabletoreduceourlandimpactby9,980

acres.Additionalbenefitsincludepositivereputationwithcommunities,

andregulatorsandnetcostsavings.

52

GOALSpillReduction

TARGETDevelopcompany-widespillreductioninitiativein2011.

STATUS

Achieved

WASTE

Cliffs’operatingsitesimplementedrecyclingprogramsatallofourminesiteswhere

recyclingprogramsareavailable.

Overburden,rock,tailings,coalrefuse,andfinecoalslurryarebyproductsfromour

miningoperations.195millionmetrictonsofthesebyproductsweredepositedonour

landin2010.Ourenvironmentalandsafetyinitiativesinclude:

•ManagingCoalSlurry–Coaliswashedandseparatedfromrefuse(non-coalrock)atpreparationplants.Finecoalslurry,whichconsistsofcoalfineswithinwater,isstoredinimpoundmentsthatclarifythewaterbyallowingthecoalfinestosettleoutofthewater.Theseimpoundmentsareassessedforsafetyriskstoensurestructuralintegrity.

•ManagingIronOreTailings–Ironcontainingrock(ore)isgroundtotheconsistencyoftalcpowderandtransportedinwaterintheprocessthatseparatesironfromtailings(groundrockwithinwateratseveraloperations).Thetailingsarestoredinbasinsthatclarifythewaterbyallowingthegroundrocktosettleoutofthewater.Thebasinsareassessedforsafetyrisksthroughdaminspectionstoensure structuralintegrity.

SPILL MANAGEMENT

In2011,CliffslaunchedanewCorporateReporting

SpillProcedure,whichwasrolledouttoallemployees.

Theprocedureappliestoalloperatingsiteswhere

Cliffshasoperatingcontrol.Thenewpolicyfocuseson

releaseswhichcouldharmtheenvironmentandincludes

theadditionofsalinewaterspillsinourAsia-PacificIron

Oreunit.Thepolicyalsorequiresarootcauseanalysisbe

performedforanyspillsover100gallons.

Cliffshasestablished2010asabaselineyearfor

developingconsistentandaccuratespilldata.Although

weexperiencedalargerspillvolumein2010than2009,

wehadseveralplantshutdownsin2009whichmakethis

datalesscomparableto2010.Overall,weexperiencedan

improvementinabsolutetermsover2008.Weidentified

thesourcesfornearly96%ofour2010spillsandtook

appropriatecorrectiveactionsfor100%ofourspills.

OurnewSpillProcedurewillensurecontinuedattention

onpreventingspills,withtheobjectiveofreducingthe

numberandimpactofspillsinthefuture.

2009

2008 11,339

218

2010 3,820

SPILL VOLUME (cubicmeters)

2008 179

2009 65

2010 94

NUMBER OF SPILLS

GOALRecycling

TARGETImplementsiterecyclingprograms.

STATUS

Achieved(whereapplicable)

GOALDesertDustEmissions

TARGET(S)BeginmonitoringofambientdustlevelsatWindarlingWesternAustralia,byendof2010.

Completetrialsofdustcontrolmethodsforunvegetatedsourceareasanddustfingerprintingstudiesby2011.

STATUS

On Target

GOALHazardousWastes

TARGET(S)Evaluateappropriateopportunitiestoeliminateandreplacepartswashersthataresolvent-basedorproducehazardouswastebytheendof2012.

STATUS

On Target

2009 2009

2008 2008304.3 84.2

183.8 40.2

2010 2010579.2 86.6

TOTAL HAZARDOUS WASTE (metrictons)

TOTALNON-HAZARDOUSWASTE (metrictons)

12.9

PER UNIT* PER UNIT*

1.98

6.2 1.35

6.6 1.82

*Permillionmetrictonsofoutput

53

ENVIRONMENTAL TABLE

Indicator 2010 2009 2008

ENERGY USE (milliongigajoules)

DIRECT48.4 30.7 44.7

NATURAL GAS 15.6 PETCOKE 0.5 GASOLINE 0.1 DIESEL FUEL 5.0 PROPANE 0.02 FUEL OIL #6 2.7 FUEL OIL 0.1 COAL 24.3INDIRECT1 17.3 11.9 18.3TOTAL 65.7 42.6 63.0GREENHOUSE GAS EMISSIONS (millionmetrictonsCO2e)

2

DIRECT GREENHOUSE AIR EMISSIONS 4.52 3.31 4.36INDIRECT GREENHOUSE AIR EMISSIONS 3.38 2.23 3.60TOTAL GREENHOUSE AIR EMISSIONS 7.90 5.54 7.96WATER USE (millioncubicmeters)

GROUND WATER 2.25 6.20 2.73MUNICIPAL WATER 0.88 1.01 1.34SURFACE WATER WITHDRAWALS AND PIT/MINE DEWATERING 253 292 312AIR EMISSIONS(metrictons)

NOX 22,020 12,843 21,459SO2 10,342 8,601 11,484PM2 9,932 7,674 6,354PM10 7,880 6,419 6,540PM2.5

4 1,266 805 280VOC5 449 343 437Lead 1.00 0.97 0.94CO6 4,047 3,745 1,557

1 Indirectenergyconsumptionfromnon-renewablesource,electricity,exceptfor2.5milliongigajoulesfromrenewableenergysource,hydroelectricity,forPointNoireandScullysites.

2 Explosives,refrigerantsandfugitivereleaseshavenotbeenincludedinGHGcalculations.GHGemissionsandenergyconsumptionfiguresofNorthAmericanIronOresitesarecalculatedusingfuelsourceinvoicedata,notproductiondata.

3 TotalPMvaluesarenotmeasuredatTildenorEmpiremines.

42010PM2.5numberdoesnotincludedatafromNorthshore.2009numberdoesnotincludedatafromNorthshoreorHibbing.2008PM2.5numberdoesnotincludedatafromUTAC,PointNoire,TildenorOakGrove.

5 ExcludesScullydata.

62008COemissionsdataexcludesPointNoire.

54

Indicator 2010 2009 2008

HAZARDOUS WASTE (metrictons)

EXPORTED FOR DISPOSAL 0 0 0RECYCLED 37.2 30.5 26.2INCINERATED OR USED AS FUEL 121.5 10.7 35.7LANDFILLED 6.2 136.6 12.8DEEP WELL INJECTION 0 0 0OTHER 414.3 6.0 229.6TOTAL HAZARDOUS WASTE GENERATED7 579.2 183.8 304.3NON-HAZARDOUS WASTE (thousandmetrictons)8

COMPOSTED0 0 0

REUSED ONSITE 19.5 12.6 11.4REUSED/RECYCLED OFFSITE 36.4 19.1 30.3INCINERATED OR USED AS FUEL 0.80 0.48 0.15LANDFILLED 8.45 3.01 7.46ONSITE DISPOSAL 21.6 5.0 34.9ONSITE STORAGE 0 0 0DEEP WELL INJECTED 0 0 0OTHER 0.03 - -TOTAL NON-HAZARDOUS WASTE GENERATED 86.6 40.2 84.2WASTE WATER

TREATED PROCESS WASTEWATER DISCHARGED TO SURFACE WATERS (million m3)8

191.0 39.9 34.5

TOTAL SUSPENDED SOLIDS IN PROCESS WASTEWATER DISCHARGED TO SURFACE WATERS (thousands kilograms)9

1,132.0 156.7 140.6

MINE WATER DISCHARGED TO SURFACE WATERS (million m3)9 58.3 167.0 80.6TOTAL SUSPENDED SOLIDS IN MINE WATER DISCHARGED TO SURFACE WATERS (thousand kilograms)9

549.0 1,179.0 62.9

NON-CONTACT COOLING WATER DISCHARGED TO SURFACE WATERS (million m3)

166.8 179.2 176.0

TOTAL DISCHARGE TO SUBSURFACE WATERS (million m3) 0 0 0SPILLS

NUMBER OF SPILLS 94 65 179SPILL VOLUME (m3) 3,820 218 11,339SAFETY PERFORMANCE(per200,000hoursworked)10

TOTAL REPORTABLE INCIDENT RATE 2.93 2.99 3.70LOST DAYS SEVERITY RATE11 52.0 58.6 57.8

7 Pinnacletrackstotalamountsforhazardousornon-hazardouswastebutnotdisposalmethod.

8 UnderHazardousWaste,thedisposalcategory“Other”2008dataincludesallhazardouswastegeneratedatthePointeNoireprocessingfacility(furtherbreakdownwasnotavailable).2009dataforPointeNoirewasappropriatelybrokendownbycategory.

9 2009dataincludedScullytreatedprocesswaterasminewaterdischarge.

10Safetydatafor2008and2009includesallCliffsNorthAmericanoperationsaswellasAPIO.APIOsafetystatisticsincludeemployeesandcontractors;NorthAmericasafetystatisticsincludeemployeesonly.

11 Thereferenceoflostdaymeansanydayanemployeemissesascheduledshift.

55

Independent Assurance statement To the Board of Directors and Management of Cliffs Natural Resources Inc. (“Cliffs”) Scope and level of assurance

We have carried out a limited assurance engagement in relation to selected 2010 performance indicators denoted by the “ ” symbol in the GRI Index on pages 57 to 58 in Cliffs’ 2010 Sustainability Report (the “Report”). The procedures conducted do not provide all the evidence that would be required in a reasonable assurance engagement and accordingly, we do not express a reasonable level of assurance. Cliffs Management Responsibilities

The Report was prepared by the management of Cliffs, who are responsible for the collection and presentation of the performance indicators, statements, claims in the Report and the criteria used in accordance with the Global Reporting Initiative (“GRI”) G3 Guidelines or where relevant, internally developed criteria used in determining that the information is appropriate, complete and accurate for the purpose of disclosure in the Report. In addition, management is responsible for maintaining adequate records and internal controls that are designed to support the reporting process. There are currently no prescribed requirements relating to the preparation, publication and verification of sustainability reports. Our Responsibilities and work performed

Our assurance engagement has been planned and performed in accordance with the International Standard on Assurance Engagements ISAE 3000 “Assurance Engagements other than Audits or Reviews of Historical Financial Information". In order for us to provide a conclusion in relation to the above scope of work, we have sought to answer the following questions for the selected performance indicators reviewed: Completeness

► Has Cliffs fairly presented performance information concerning selected performance indicators with respect to the boundaries and time period defined in the Report?

► Has Cliffs included sustainability performance information from all material entities in its defined boundary for its reporting of the selected performance indicators?

► Has Cliffs accurately collated corporate data relating to the selected performance indicators from operations level data?

Accuracy

► Is the data reported for selected performance indicators sufficiently accurate and detailed for stakeholders to assess Cliffs’ performance?

Our limited assurance procedures for each of the selected performance indicators included, but were not limited to:

► Interviewing selected personnel to understand the key sustainability issues related to the selected performance data and processes for the collection and accurate reporting of performance information

► Where relevant, performing walkthroughs of systems and processes for data aggregation and reporting

► Checking key assumptions and the evidence to support the assumptions

► Checking the accuracy of calculations performed, on a sample basis, primarily through inquiry and analytical procedures

► Checking that data and statements had been correctly transcribed from corporate systems and/or supporting evidence into the Report

Comparative information, market information, targets, projections and opinions subject to subjective evaluations are not encompassed by the scope of the work performed; therefore, our report does not provide any type of assurance on such information. Conclusions

On the basis of our procedures performed for a limited assurance engagement, nothing has come to our attention to cause us to believe that the selected 2010 performance indicators are not, in all material respects, presented in a manner that is complete and accurate in accordance with the GRI G3 Guidelines or where relevant, internally developed criteria. Montreal, Canada October 6, 2011

ASSURANCE

56

GRI STATEMENT

57

PROFILE DISCLOSURES

1. STRATEGY AND ANALYSIS

1.1 CEO Statement 4

1.2 Keyimpacts,risks,andopportunities. 11

2. ORGANIZATIONAL PROFILE

2.1 Name 8

2.2 Primarybrands,products,and/orservices. 8-10

2.3 Operationalstructure 8-10

2.4 Headquarters 8

2.5 Countriesofoperations 9-10

2.6 Natureofownership 8

2.7 Marketsserved 8-10

2.8 Scaleoftheorganization 8-11,20,andPages 19&88ofthe10-K

2.9 Significantchangesduringthereportingperiodregardingsize,structure,orownership.

8-11

2.10 Awards 12

3. REPORT PARAMETERS

3.1 Reporting period 6

3.2 Dateofmostrecentpreviousreport(ifany). 2009

3.3 Reportingcycle(annual,biennial,etc.) 6

3.4 Contactperson 6

3.5 Processfordefiningreportcontent 6

3.6 Boundaryofreport 6

3.7 Limitationsonthescopeorboundaryofthereport

6

3.8 Reportingonjointventuresandsubsidiaries 6,8

3.9 Datameasurementtechniques 6,31

3.10 Restatements 51-53

3.11 Changesinboundaryorscope 6,8-11

3.12 GRI index http://www.cliffsnaturalresources.com/EN/Sustainability/SustainabilityReporting/

3.13 Externalassurance 55

4. GOVERNANCE, COMMITMENTS, AND ENGAGEMENT

4.1 Governancestructure 16-17

4.2 ChairandCEO 16-17

4.3 Boardstructure 16-17

4.4 MechanismsforfeedbacktoBoard 16-17

4.5 Compensationandperformancelinkage 16-17

4.6 Avoidingconflictofinterest 16-17

4.7 QualificationsoftheBoard 16-17

4.8 Internallydevelopedstatementsofmission,valuesandcodesofconduct

13-14,16-17

4.9 Overseeingsustainabilityperformance 17

4.10 Evaluatinggovernanceandperformance 16-17

4.11 Precautionaryprinciple Cliffs'EnvironmentalPolicyisconsistentwithaprecautionaryapproach

4.12 Externalcharters 36,40,42,44,47

4.13 Membershipsandassociations 6

4.14 Stakeholders 6

4.15 Stakeholderidentification 6

4.16 Stakeholderengagement 6

4.17 Stakeholdertopicsandresponses 22-23,27,36,42-45,47-48

PERFORMANCE INDICATORS

ECONOMIC INDICATORS

DISCLOSURE ON MANAGEMENT APPROACH 8,20

EC1 Directeconomicimpacts 20

EC3 Coverageoftheorganization'sdefinedbenefitplanobligations.

Page136of201010-K

EC4 Significantfinancialassistancereceivedfromgovernment.

Nosignificantgovernmentassistancereceived

EC6 Policy,practices,andproportionofspendingonlocally-basedsuppliersatsignificantlocationsofoperation.

22

EC8 Developmentandimpactofinfrastructureinvestmentsandservicesprovidedprimarilyforpublicbenefitthroughcommercial, in-kind,orprobonoengagement.

21,37-38

EC9 Understandinganddescribingsignificantindirecteconomicimpacts,includingtheextentofimpacts.

20-23,34-38

ENVIRONMENTAL INDICATORS

DISCLOSURE ON MANAGEMENT APPROACH 8-10,22,40-42

EN1 Materialsusedbyweightorvolume. 51

EN3Directenergyconsumptionbyprimaryenergysource.

47,53-54

EN4Indirectenergyconsumptionbyprimarysource.

47,53-54

EN5Energysavedduetoconservationandefficiencyimprovements.

47

EN7 Initiativestoreduceindirectenergyconsumptionandreductionsachieved.

47

EN8Totalwaterwithdrawalbysource. 49,53

MM1

Amountofland(ownedorleased,andmanagedforproductionactivitiesorextractiveuse)disturbedorrehabilitated.

45

EN13 Habitatsprotectedorrestored. 45-46

EN16 Totaldirectandindirectgreenhousegasemissionsbyweight.

47

EN17 Otherrelevantindirectgreenhousegasemissionsbyweight.

NoadditionalrelevantindirectGHGemissionsbeyondwhatisreportedinthisreport.

EN18 Initiativestoreducegreenhousegasemissionsandreductionsachieved.

47-48

EN20NOx,SOx,andothersignificantairemissionsbytypeandweight.

48,53

EN21Totalwaterdischargebyqualityanddestination.

49,53

EN22Totalweightofwastebytypeanddisposalmethod.

52-54

EN23Totalnumberandvolumeofsignificantspills.

52

EN26 Initiativestomitigateenvironmentalimpactsofproductsandservices,andextentofimpactmitigation.

10

EN28

Monetaryvalueofsignificantfinesandtotalnumberofnon-monetarysanctionsfornon-compliancewithenvironmentallawsandregulations.

42

EN30 Totalenvironmentalprotectionexpendituresandinvestmentsbytype.

42

*Disclosuresandindicatorshavebeenedited,butthecontentremains alignedwithGRI.DownloadaPDFversionofourfullcontentindexat http://www.cliffsnaturalresources.com/EN/Sustainability/SustainabilityReporting/

GRI INDEX*

58

LABOR INDICATORS

DISCLOSURE ON MANAGEMENT APPROACH 26

LA1 Employeesbytype Page19of201010-K

LA21 Employeeturnover 32

LA3 Benefits 31

LA4 Percentageofemployeescoveredbycollectivebargainingagreements.

87%ofNorthAmericanIronOrehourlyemployeesand70%ofNorthAmericanCoalhourlyemployees

LA6 Percentageoftotalworkforcerepresentedinformaljointmanagement-workerhealthandsafetycommitteesthathelpmonitorandadviseonoccupationalhealthandsafetyprograms.

27

LA7

Ratesofinjury,occupationaldiseases,lostdays,andabsenteeism,andnumberofwork-relatedfatalitiesbyregion.

27

LA9 Healthandsafetytopicscoveredinformalagreementswithtradeunions.

PPE,safetycommittees,incidentinvestigations,inspections,training,medicalrecords,representation,medicalexaminationsandsurveillance,ergonomics.

LA12 Percentageofemployeesreceivingregularperformanceandcareerdevelopmentreviews.

29

LA14 Ratioofbasicsalaryofmentowomenbyemployeecategory.

32

HUMAN RIGHTS INDICATORS

DISCLOSURE ON MANAGEMENT APPROACH 20,26,36

HR5 FreedomofAssociation Norisksidentified

HR6 ChildLabor Nosignificantrisksatouroperations

HR7 Forcedorcompulsorylabor Nosignificantrisksatouroperations

HR9 Rightsofindigenouspeoples 36

SOCIETAL INDICATORS

DISCLOSURE ON MANAGEMENT APPROACH 18,20,27-30,34

SO1Programsandpracticesthatassessandmanagetheimpactsofoperations

6,35-36

MM8 Number(andpercentage)orcompanyoperatingsiteswhereartisanalandsmall-scalemining(ASM)takesplaceon,oradjacentto,thesite;theassociatedrisksandtheactionstakentomanageandmitigatetheserisks.

Didnotoccur

MM10 Numberandpercentageofoperationswithclosureplans.

Environmentalandmineclosureobligationswere$199.1million2010YearEnd.

SO2 Percentageandtotalnumberofbusinessunitsanalyzedforrisksrelatedtocorruption.

100%

SO3Percentageofemployeestrainedinorganization'santi-corruptionpoliciesandprocedures

29

SO4 Actionstakeninresponsetoincidentsofcorruption

Noincidents

SO5 Publicpolicypositionsandparticipationinpublicpolicydevelopmentandlobbying

18

SO6 Totalvalueoffinancialandin-kindcontributionstopoliticalparties,politicians,andrelatedinstitutionsbycountry

18

SO7 Anti-competitivebehavior None

PRODUCT RESPONSIBILITY INDICATORS

DISCLOSURE ON MANAGEMENT APPROACH 8-10,23,40

MM11 Programsandprogressrelatingtomaterialsstewardship.

51

PR5 Practicesrelatedtocustomersatisfaction,includingresultsofsurveysmeasuringcustomersatisfaction.

23

1 Partialreporting

2 0 1 0 S U S T A I N A B I L I T Y

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