2011 SUSTAINABILITY REPORT

Explore Operate Grow

EXPLORE OUR COMPANY

CEO Letter 2

Explore Our Report 3

Explore Our Company 9

Explore Our Operations 21

Explore Our Team 29

Explore Our Communities 35

Explore Our Environment 43

Environmental and Safety Table 57

Independent Assurance Statement 59

GRI Index 61

TABLE OF CONTENTS

1

Sustainability @ Cliffs

Sustainability at Cliffs focuses on continually improving current

performance while securing future growth opportunities. We

understand there is no mining without a permit. The way we

conduct business determines our “social license to operate”

– how well we develop and maintain critical partnerships with

local communities and key stakeholders. Responsible and safe

operation, respectful engagement and effective environmental

stewardship are qualities we seek to both foster and recognize

throughout Cliffs. Cultivating these qualities creates business

value -- both the tangible bottom line form of value and significant

intangible value in the form of improved relationships, enhanced

reputation, new partnerships and collaborations. Sustainability

allows us to develop new opportunities and mitigate risks, while

gaining the support of stakeholders and agencies that allow us

to operate and grow.

Feedback

We are interested in exploring our stakeholders’ feedback about this

report. If you would like to share your comments on the report or

our progress in 2011, please contact Ron Nielsen, Senior Director,

Global Sustainability via email: Ronald.Nielsen@CliffsNR.com.

2

Message from the Chairman, President and CEO

How to grow sustainably is among the biggest challenges

facing companies around the world. Expanding and increasingly

urbanized populations bode well for the growth in demand for natural

resources; however, these same forces are also putting a premium

on sustainable business practices. As we continue to expand our

global presence, a sustainable business model is clearly in the best

interests of all our stakeholders and the surest way to secure long-

term competitive advantage and produce economic value for our

shareholders. It will also contribute to a better environment for our

employees and their communities.

Sustainability at Cliffs is fundamental to continually improving current

performance, and I am pleased to share the results of our efforts

to promote sustainable development across the Cliffs organization

worldwide. The theme of our 2011 Sustainability Report is: Explore.

Operate. Grow. These three words succinctly describe the basic

stages of our business and we strive to employ sustainable business

practices at each of them.

Last year marked the beginning of a journey to refine our company-

wide sustainability approach to ensure full alignment with our business

strategy, goals, values and mission. I am pleased to note that we

made significant progress building upon Cliffs’ legacy of corporate

social responsibility. As we work to refine our long term vision, we are

committed to the pursuit of focused initiatives and tangible actions that

both raises the performance bar and prepares us for the challenges

of growing globally. Our Executive Leadership Team is committed to

developing and implementing Cliffs’ sustainability strategy to enhance

and reinforce our strategic and operational business objectives and

to maintain our license to operate. Here are a few examples of Cliffs’

sustainable business approach:

As part of developing our sustainability strategy, Cliffs commissioned

an independent benchmarking assessment of the Company’s

environmental, social, economic and governance (ESEG) policies,

performance and programs. We are using this analysis to further

identify gaps, prioritize strategic opportunities and discover areas for

improvement. It is also helping us to identify what information is of

most interest to our various stakeholders.

To strengthen sustainability practices, we began the process of

identifying best practices for industry frameworks, policies, protocols

and management systems. Currently, we are in the assessment

stage and evaluating indicators, required actions and the resources

required to embed and integrate improvements.

During 2011, Cliffs introduced a new Capital Investment System

(CIS) to the organization. It is a structured and integrated process

designed to assess the economic and technical viability of a capital

project throughout all phases of the investment lifecycle. Through

the CIS process, we have integrated enhanced environmental,

social, economic and governance (ESEG) considerations in the

current set of minimum operating standards to ensure they are

timely and effectively addressed.

These examples illustrate how Cliffs is managing growth responsibly.

In 2011, we made great progress embedding our sustainability

objectives across our Company. While we recognize our

accomplishments, we remain humble in the face of the challenges

in front of us. Even with significant safety progress in 2011, I am

deeply saddened to report the loss of a colleague at the Bloom Lake

Mine in Quebec, a tragedy that occurred during the first quarter of

2012. This serves as a stark reminder to all of us at Cliffs that we

must continue to improve our safety standards and procedures to

achieve our goal of a zero-incident culture. To further strengthen our

efforts, we are taking steps to improve the way we look at incident

prevention. To this end, we have deployed Safety Leadership Models

to assist managers and supervisors in improving safety activities and

targeting actions at the root cause of incidents. At Cliffs, protecting

the health and safety of our employees is our utmost priority.

In preparing this report, we took the opportunity to look back on

our activities over the past year and consider their implications for

Cliffs and our diverse stakeholders – shareholders, customers,

employees, communities, governments and suppliers – all of whom

are key to the success of our business over the long term. The

2011 Sustainability Report recognizes the dedicated efforts of the

Cliffs’ team worldwide. From those in our corporate offices to our

colleagues in the field, everyone has contributed to making Cliffs a

more sustainable company. I hope this report will give you a sense

of the progress we are making as we Explore, Operate and Grow.

Sincerely,

Joseph A. Carrabba

Chairman, President and Chief Executive Officer

3

Explore. Operate. Grow. – Our 2011 sustainability report

describes a pivotal year for Cliffs. As a result of our growth,

we have the opportunity to introduce new employees

to Cliffs’ culture, to better understand the needs of

stakeholders in new operating communities and to discover

and explore untapped market opportunities. All of which

will cultivate value and returns. Cliffs is building on a strong

foundation of sustainability in our operations and across the

organization globally.

Our Report

EXPLORES our management approach

and how key sustainability topics are

relevant to Cliffs’ business operations.

Provides OPERATIONAL highlights

from 2011, including how we are

embracing successes and addressing

challenges associated with the business.

Outlines our strategic activities for 2012

and provides a view of how we are

positioning Cliffs to GROW as

a leader in sustainability.

In this report, we invite you to explore each section, read about our 2011 operational performance and learn about our goals and growth.

Please use the icons below to help guide you as you navigate and explore the successes and challenges we encountered in 2011.

In each section you will find the following:

EXPLORE

4

EXPLORE OUR COMPANY

Reporting Boundary

Unless otherwise noted, Cliffs’ fourth annual sustainability report

discloses material information for the calendar year 2011

(January 1 – December 31). The report’s data covers operations

where Cliffs has greater than 50% ownership or where we

exercised control through a management contract for the entire

year. One exception is our inclusion of Bloom Lake, which was

acquired by Cliffs in May 2011. Cliffs, together with Bloom Lake’s

management team, chose to report on the activity at Bloom Lake

because of our commitment to transparency and the learning

opportunities that come with our sustainability reporting activities.

Application Level and G3.1 Reporting Principles

In preparing our 2011 report, Cliffs followed the Global Reporting

Initiative (GRI) G3.1 Guidelines and achieved a GRI Application

Level B+. The GRI Content Index, as well as GRI’s official statement,

can be found in the back of this report. An independent third

party, Deloitte & Touche LLP, conducted a review on specified

performance indicators, in accordance with attestation standards

established by the American Institute of Certified Public Accountants

(statement on page 59). In addition, we are able to ensure the

quality of the report through the adherence to the following

GRI principles:

Sustainability Context and Completeness

The information contained in this report reflects Cliffs’

environmental, social, economic and governance commitments

and impacts.

Balance and Clarity

Cliffs is dedicated to providing balanced information about its

sustainability impacts. The objective of this report is to provide a

balanced view of our material impacts in a clear, understandable

manner.

Comparability and Timeliness

This report is consistent with the GRI G3.1 Guidelines and includes

a GRI Content Index for quick reference and comparability to our

performance over the previous annual sustainability reports.

Accuracy and Reliability

This sustainability report was reviewed by Cliffs’ executive

leadership team (ELT) and Board of Directors and is published

with their support.

EXPLORE » OUR REPORT

5

OPERATE

Reporting on the environmental, social and governance performance across our

operations is an important part of maintaining and enhancing our social license

to operate. Communicating our progress enhances management discipline and

improves transparency, which helps to create trusting relationships with our

community and global stakeholders.

Materiality and Stakeholder Inclusiveness

As a global mining and natural resources company, we recognize the importance our local communities and global stakeholders have

in our commitment to operating responsibly and contributing to sustainable growth at Cliffs.

6

We engage regularly with the local communities in which we operate

through newsletters, public meetings, outreach opportunities

related to permitting efforts, environmental and community

topics, presentations, ongoing communications with investors

and employees, and other engagement efforts. As expectations

of sustainability and environmental stewardship are increasingly

heightened, we are developing concrete plans for more active

engagement throughout the many communities we reach.

In 2011, we conducted a stakeholder analysis through which we

leveraged the expertise of our employees to help define material

business issues. This initial dialogue identified key needs and issues

related to Cliffs. We intend to include our customers, partners,

vendors, suppliers and shareholders in this process as we move

forward. An example of an external engagement effort in 2011 is

the community survey we completed in Western Australia (see

highlight story, page 8) as well as activities outlined in the Explore

our Community section of this report.

As we grow our operations globally, our commitment to sustainable,

responsible growth is shown in our efforts to strengthen

relationships with key stakeholders through open communications.

From collaborations with regulators and community members, we

improve our performance and become a more responsive company.

Examples of our engagement efforts include the following work in

Eastern Canada:

Two of our Eastern Canada sites joined BNQ 21000, a pilot project

initiated by the Bureau de Normalisation du Québec and the

University of Sherbrooke, which aims to implement a standard

for sustainable development in the various industries of Quebec.

Seventeen companies, all members of the Quebec Mining

Association (AMQ), joined this initiative. The BNQ 21000 project

is organized in seven steps that encourage the participation of

various stakeholders.

Cliffs’ Pointe-Noire site, along with the other users of the Bay of

Sept-Iles, joined the Port of Sept-Iles’ Administration in the Green

Marine initiative. This is a voluntary environmental program for

the Canadian and American marine industries. The Green Marine

initiative addresses seven environmental factors, including aquatic

invasive species, air emissions, greenhouse gas emissions, cargo

residues, oily waters, and conflicts of use for ports and terminals.

Stakeholders

Academia

Applicable local, state/provincial

and governmental agencies

Business partners

Customers

Elected officials

Employees

First Nations and Aboriginal

communities

Investors

Local businesses

Local communities

Non-governmental organizations

Suppliers

Trade organizations

Industry Associations

Alabama Coal Association

American Iron and Steel Institute

Mining Association of Canada

Minnesota Iron Mining

Association

National Mining Association

Prospectors and Developers

Association of Canada

Western Australia Chamber of

Minerals and Energy

West Virginia Coal Association

OPERATE » OUR REPORT

We strive to learn from all our stakeholders. Cliffs is also involved with numerous

associations, which enable us to stay abreast of critical industry trends and changes.

7

GROW

With an increased understanding of the material issues of our stakeholders,

we seek to expand our reporting efforts to address our stakeholders’ interests.

In addition to reporting through internationally recognized frameworks such

as the GRI and the Carbon Disclosure Project (CDP), Cliffs continues to

improve transparency through the inclusion of local reports and participation in

development of an integrated reporting framework globally. Through these efforts,

Cliffs is continuing to enhance our capacity to report on a broad range of material

issues to an ever-expanding group of stakeholders.

8

Engagement

In 2012, we will continue to engage internal and external stakeholders to identify material issues relative to Cliffs’ operations, employees and

communities. These efforts improve our understanding of the issues important to a broad group of stakeholders and help to maintain our

social license to operate. We look forward to reporting further progress in the 2012 sustainability report.

Integrated Reporting

As we continue to embed sustainability into our business operations

and policies, we see opportunities to enhance the business value of

our reporting processes through integrating our sustainability and

financial reporting. Cliffs is actively engaged in the dialogue and

development of integrated reporting through participation in the

International Integrated Reporting Council (IIRC) pilot program. The

IIRC is leading the development of a global framework for integrated

reporting. It is a powerful, international cross section of leaders

from the corporate, investment, accounting, securities, regulatory,

academic and standard-setting sectors, as well as civil society.

We intend to bring forward reporting mechanisms that provide

our stakeholders a clear picture of how we manage our social

and environmental impacts while achieving financial return for our

shareholders. Integrating our reporting activities will result in a more

accurate reflection of Cliffs’ approach to operating a global mining

and natural resources company.

GROW » OUR REPORT

SURVEYING OUR NEIGHBORS IN AUSTRALIA

To gain a better understanding of the effectiveness of our West

Australia Koolyanobbing Operations’ engagement efforts, in

December 2011 we undertook a survey in the Esperance and

Southern Cross communities, reaching nearly 300 households.

In the survey, respondents were asked to share their thoughts and

concerns on a number of questions relating to Cliffs’ activities. An

overwhelming majority of respondents (95 percent in Southern

Cross and 79 percent in Esperance) said they had no concerns

or issues with Cliffs and its operations or activities. Of the matters

raised, traffic congestion and noise from rail transport operations

were most common with Esperance residents.

In September 2011, we improved safety and reduced congestion of

vehicles and pedestrians in Esperance with the opening of the Sim

Street Bridge, a $9.9 million infrastructure investment by Cliffs. A

further investment of $1.5 million in railway track upgrades and the

relocation of exchange points at Esperance marshalling yards has

resulted in removing an additional 10 crossing activations.

Community members also cited dust as a perceived issue in

Esperance. Results from a recent independent study showed less

than one percent of the dust samples collected adjacent to the

port and within the town of Esperance could be attributed to Cliffs’

iron ore.

By engaging with our local communities, we can address issues

of concerns and take appropriate action. Our efforts in Western

Australia demonstrate that proactive engagement efforts can

result in positive outcomes for Cliffs and the communities in

which we operate. We believe efforts such as these reinforce our

commitment to follow best practices above and beyond required

standards to continually improve results.

9

GROWOPERATEEXPLORE

Our CompanyAs a global company, we are positioning ourselves to

maximize opportunities and grow organically through

our existing mining and exploration operations. We have

diversified our approach and positioned the Company

for long-term growth. We invite you to explore this report

to see how we are working to make this a reality.

EXPLORE

10

EXPLORE » OUR COMPANY

Cliffs Natural Resources Inc. (NYSE: CLF) (Paris: CLF), a global mining and natural

resources company headquartered in Cleveland, Ohio, USA, has seen significant

growth in the past few years. In 2011, our revenues were $6.79 billion (USD),

representing a 70% increase from 2010. We have mining operations in four countries

and have exploration activities in several others.

Cliffs is the largest producer of iron ore pellets in North America. We are a major supplier of direct-shipping iron ore (lump and fines)

out of Australia and a significant producer of high- and low-volatile metallurgical coal. In 2011, we made significant investments in

Canada with our continued exploration of our chromite deposits in Ontario and the acquisition of Consolidated Thompson Iron

Mines Ltd. (CT) in Quebec.

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

CRUSHED

CHROMITE

GRADED CONCENTRATED

LUMP FINES PELLETIZED

RAIL

TRANSPORTATION

EMERGING BUSINESSCOAL

Cliffs’ Business Process

11

Iron Ore: Cliffs mines and processes iron ore for the steelmaking

industry. Our production process and efficient technologies allow

us to produce iron ore that is both high in quality and low in cost.

Our product is sold based on varying mineral content specifications

globally. Through our acquisition of Consolidated Thompson (CT)

in 2011, we have increased our iron ore production capacity to

meet growing global demand.

No. Country Mine OwnershipAnnual Capacity (Millions of Tons)*

1 United States EmpireTildenHibbingNorthshoreUnited Taconite

79%85%23%

100%100%

5.58.08.06.05.4

2 Canada WabushBloom Lake

100%75%

5.68.0

3 Australia Koolyanobbing 100% 8.5

4 Australia Cockatoo Island 50% 1.4

5 Brazil Amapá 30% 6.1

Coal: Our coal operations in the United States produce high- and

low-volatile metallurgical coal, which is a primary ingredient in steel

production. Our 2010 acquisition of Cliffs Logan County Coal (CLCC)

added two underground metallurgical coal mines and one open

surface thermal coal mine, consisting of Powellton, Chilton-Dingess

and Toney Fork No. 2, to our operations.

No. Country Mine OwnershipAnnual Capacity (Millions of Tons)*

7 United States Pinnacle ComplexPowelltonChilton-DingessToney Fork No. 2

100%100%100%100%

4.0

2.9

8 United States Oak Grove 100% 2.5

9 Australia Sonoma 45% 4.0

Emerging Business: Cliffs continuously is seeking to diversify our

portfolio of products. In Ontario, we pursue the development of

chromite deposits as a means of entering the ferroalloys market.

We seek opportunities that are similarly aligned with our core

business whenever possible.

Business Units and Products

Cliffs’ businesses are arranged by product category and geography, including United States Iron Ore, Eastern Canadian Iron Ore,

North American Coal and Asia Pacific Iron Ore. Cliffs also has minority investments in Asia Pacific Coal (Sonoma – 45% ownership)

and Latin American Iron Ore (Amapá – 30% ownership), which are outside of the reporting boundaries for this report.

Global Operations

No. Country Mine Ownership

6 Canada Black ThorBlack LabelBig Daddy

100%100%72%

*United States Iron ore are long tons of 2,240 pounds; North American coal are short tons of 2,000 pounds; all mining locations outside the United States are metric tons of 2,205 pounds.

12

EXPLORE » OUR COMPANY

Global Exploration Group

The Global Exploration Group explores new geographies for

potential projects to expand our production volumes and product

diversity. In 2011, Cliffs spent $48.4 million on exploration

activities worldwide. Where possible, Cliffs partners with junior

mining companies as a means of securing low-cost entry points

to reserves. With Cliffs’ global infrastructure and services, we

can provide the technical and operational support to our junior

mining companies to make exploration activities successful in a

globally competitive environment. This approach enhances our

ability to grow reserves and create value for Cliffs, our partners

and our stakeholders.

Global Commercial Group

We rely on our Global Commercial Group for building strategic

customer relationships to foster the sale of iron ore, coal and

ferroalloys. Cliffs’ Global Commercial Group is responsible for

pricing, seeking partnerships and leading the sales teams. This

group is also responsible for overseeing the global transportation

and logistics functions of our operations. In a rapidly changing

pricing environment, our Global Commercial Group allows us to

respond quickly to a global market, maintaining access to growing

and emerging markets worldwide.

No. Country Mine

1011121314151617181920

United StatesUnited StatesUnited StatesCanadaCanadaCanadaAustraliaChileChinaJapanMongolia

ClevelandDuluthIshpemingMontrealThunder BayTorontoPerthSantiagoBeijingTokyoUlaanbaatar

Offices

Global Operations

13

OPERATE

Capital investments totaling over $1.3 billion from 2011 to 2016 will support the expansion of the Bloom Lake mine and processing capabilities to ramp-up production capacity from 8.0 million to

24.0 million metric tons of iron ore concentrate per year.

14

OPERATE » OUR COMPANY

In 2011, capacity utilization among steelmaking facilities in North America was

approximately 75 percent, up from approximately 70 percent in 2010. High year-over-

year growth in crude steel production and iron ore imports in Asia supported demand

for our products in the seaborne markets. In response to this demand, we increased

production at most of our facilities during 2011. Prepared for continued growth,

Cliffs has a number of capital projects underway across our business.

2011 Key Business Developments

Cliffs Chromite Project

We released a preliminary project description for the potential

development of our Black Thor chromite deposit. Black Thor is the

largest known North American chromite deposit, located in a remote

area of Ontario, approximately 500 kilometers northwest of Thunder

Bay. This project provides significant strategic value to Cliffs by

increasing product diversification through an increased investment

in ferroalloys. Such expansion into new geographic areas is

enhancing our understanding of operating in diverse cultural

environments and better preparing us for global growth.

renewaFUEL

In January 2011, we completed the sale of our renewaFUEL

business to RNFL Acquisition LLC. Cliffs launched this business

in November 2009 to produce high-energy, low-emission biofuel

cubes from sustainably collected wood and agricultural feedstocks.

Although we spent significant time and resources developing

this alternative energy technology, the project continued to

experience operational and technological setbacks. Consequently,

we determined it would be more valuable to devote maximum

resources to the operation of Cliffs’ core business and sell

renewaFUEL to a company with expertise in the alternative energies

industry that could develop the project to its full potential.

Our exploration of the renewaFUEL opportunity supported the

development of strong stakeholder relationships, a valuable and

transferrable experience that will be useful in future stakeholder

engagement efforts.

Consolidated Thompson (CT)

In May 2011, we completed the largest acquisition in our history

by acquiring all outstanding common shares of CT for $17.25

per share in an all-cash transaction, including net debt. Cliffs’

acquisition of CT is a reflection of our business strategy to build

scale by owning expandable and exportable steelmaking raw

material assets serving international markets. The properties are

in close proximity to our existing Canadian operations, allowing us

to leverage our port facilities and supply iron ore to the seaborne

market. Capital investments totaling over $1.3 billion from 2011

to 2016 will support the expansion of the Bloom Lake mine and

processing capabilities to ramp-up yearly production capacity

from 8.0 million to 24.0 million metric tons of iron ore concentrate.

Through the CT acquisition, we gained both mine and

concentrator facilities in Bloom Lake (Fermont, QC) and railway

and port facilities in Pointe-Noire (Sept-Iles, QC). These sites,

along with the 2010 acquisition of the remaining shares of Wabush

Mines in Wabush, NL and Pointe-Noire (Sept-Iles) QC, comprise

our Eastern Canada Iron Ore (ECIO) business unit. We created a

Public Affairs District Manager role to enhance our ability to assess

the impacts, needs and opportunities of these recent transactions

and the communities they affect.

15

Awards and Recognition

Cliffs was the proud recipient of a number of awards and honors in 2011, including:

Listing on Maplecroft Climate Innovation Indexes

Listing on Barron’s 500

Listing on Fortune 500

Sentinels of Safety Certificate of Achievement – Our Empire Mine

(Processing Plant), presented by MSHA and the National Mining

Association

Stewardship Award – Our Pinnacle Mine, presented by the West

Virginia Coal Association and the West Virginia Department of

Environmental Protection

Wastewater Treatment Facility Operational Award – Our United

Taconite Mine, presented by the Minnesota Pollution Control Agency

Yellow Ribbon Company Award, presented by the State of Minnesota

Governance, Board and Executive Structures and Policies

Cliffs’ Core Values

We have a legacy of being a fair and responsible operator for more than 165 years. We must continue to progress and improve in order to

maintain the trust and respect of the global community. As our company grows around the world, our ability to communicate and work with

various stakeholders in the communities in which we operate, as well as those we seek to enter, becomes increasingly important. In support

of this objective, Cliffs operates now and into the future under a framework of strong core values. These values guide our decisions to deliver

sustained performance and continually nurture positive relationships with all our stakeholders.

Recognize & Reward

Achievement

Environmental Stewardship

SafeProduction

CustomerFocus

Integrity

CreateEconomic

Value

Teamwork

Bias for Action

Trust, Respect & Open

Communication

Group & Individual

Accountability

16

OPERATE » OUR COMPANY

Board and Executive Structures

Corporate governance and ethics are core to our business. To

ensure appropriate interactions between Cliffs’ Board of Directors

(Board) and management, in 2011 we maintained a 12-member

Board including 11 independent members and our Chairman,

President and Chief Executive Officer (CEO). The Board receives

and reviews a bi-monthly management report describing

significant activities and business developments, which includes

environmental, social and economic performance. To learn more

about our Board, Cliffs’ Code of Business Conduct and Ethics,

and Cliffs’ Corporate Governance Guidelines, please visit

http://ir.cliffsnaturalresources.com.

The Board employs four committee charters – Audit, Governance

and Nominating, Compensation and Organization, and Strategy

and Sustainability—to provide executive oversight of Cliffs.

These Board-approved committee charters define for the Board:

functions, responsibilities and membership qualifications,

appointment and removal procedures, and operations and

reporting procedures. For additional information on the committee

charters, please visit: http://ir.cliffsnaturalresources.com.

Audit Committee

The Audit Committee is responsible for assisting the Board in

its oversight responsibilities with respect to financial statements,

reporting process and compliance, independent auditors, internal

accounting and financial controls, internal audit function, enterprise

risk management and conformity with applicable legal requirements,

and the Cliffs’ Code of Business Conduct and Ethics. For the

charter of the Audit Committee, please visit

http://ir.cliffsnaturalresources.com/.

Governance and Nominating Committee

This Committee is responsible for governance such as identifying

and recommending potential Director nominees and committee

assignments, reviewing and recommending applicable Corporate

Governance Guidelines, reviewing Director compensation and

benefit plans, reviewing the size and makeup of the Board, and

participating in the annual review of the Board’s performance.

For the charter of the Governance and Nominating Committee,

please visit http://ir.cliffsnaturalresources.com/.

Compensation and Organization Committee

This Committee is responsible for establishing and administering

Cliffs’ policies, programs and procedures for compensating

management; recommending officers to Cliffs Board as well as

approving and evaluating the performance of Company officers,

including development and succession planning strategies; and

reviewing and approving the Compensation Discussion and

Analysis for inclusion in Cliffs’ proxy statement. For the charter

of the Compensation and Organization Committee, please visit

http://ir.cliffsnaturalresources.com/.

Strategy and Sustainability Committee

In 2011, we began to transition the Strategy and Operations

Committee into what is now known as the Strategy and

Sustainability Committee. The Committee was formally renamed

in January 2012. This Committee is responsible for overseeing

Cliffs’ strategic plan and annual management objectives, taking

into consideration risks pertaining to operational, safety and

environmental matters. The Committee monitors and reviews the

merits or risks of business decisions with management related

to major projects, acquisitions or joint ventures and strategic

alliances. Acting in an advisory capacity to the Board and

management, the Committee provides guidance on Cliffs’ global

sustainability strategies and its social license to operate. For the

charter of the Strategy and Sustainability Committee, please

visit http://ir.cliffsnaturalresources.com/.

17

2011 Public Policy Initiatives

Cliffs supports long-term growth in the communities in which we operate by engaging in regulatory activities, public policy initiatives and

legislative lobbying.

In 2011, we worked with numerous associations on issues of significance to Cliffs. Highlights include:

Cliffs worked closely with Canadian public officials at the federal,

provincial and municipal levels to advance Cliffs’ chromite project into

pre-feasibility stage. These efforts led to the advancement of dialogue

with the Canadian government about transportation infrastructure

needed to access the “Ring of Fire”, as well as the negotiation of

economic development incentives to support this project.

Prior to Cliffs’ acquisition of Consolidated Thompson, we engaged

with Québec provincial leaders and local government officials to

introduce the Company, share our Core Values and gain federal

government support for the approval of the transaction under

the Investment Canada Act. These efforts contributed to the

successful approval of the acquisition.

In 2011, Cliffs worked with the Iron Mining Association of

Minnesota to support legislation providing efficiency and

flexibility for wetland mitigation for permitted mining operations.

On May 27, 2011, Minnesota Governor Mark Dayton signed into

law omnibus environmental policy legislation establishing a 1:1

replacement ratio for wetland mitigation under a permit to mine.

This legislation ensures that mining companies are subject to the

same wetland mitigation ratio as other private entities. This policy

outcome was achieved through the collaborative efforts of Cliffs,

state legislators, the Board of Water and Soil Resources, the

Minnesota Department of Natural Resources and the Iron Mining

Association of Minnesota.

In Minnesota, Cliffs worked collaboratively with the Chamber

of Commerce, state lawmakers and other industrial interests to

lobby in favor of legislation to address the State’s enforcement

of its sulfate-wild rice water quality standard (10 milligrams per

liter). Legislation signed in August 2011 appropriated $1.5 million

to fund a study on the effects of sulfate on wild rice. When this

research is complete, the State will be required to promulgate a

revised sulfate-wild rice standard. In the meantime, this legislation

requires that iron ore mines monitor, report and take steps to

minimize sulfate levels in water discharge.

The large amount of electricity needed to process low-grade

iron ore into a value-added iron pellet used in the steelmaking

process requires our operations to rely heavily on affordable,

reliable electric power. Over the past several years, Cliffs’

Michigan mines have experienced escalating electric power

costs, which have been partially attributable to the development

of new electric generating facilities by the mines’ power provider.

In response, Cliffs has been advocating for legislation that will

ensure costs for excess generating capacity are not included in

rates of Michigan ratepayers.

Following a protracted debate in the United States Congress

over increasing the federal debt ceiling, the Budget Control

Act of 2011 was signed into law on August 2, 2011. This

legislation created a two-stage process to increase the federal

debt limit by $2.1 trillion, mandated large automatic budget

cuts and established the “Joint Select Committee on Deficit

Reduction” (known as the Super Committee) to develop a plan

for achieving the required deficit reductions. To maintain the

global competitiveness of its U.S. operations, Cliffs joined with its

federal trade associations to lobby against tax increases or the

imposition of unwarranted fee structures on the mining industry.

The Joint Select Committee on Deficit Reduction adjourned

without providing an official recommendation for deficit reduction

and, thus, no tax or fee proposals have been advanced.

While Cliffs itself does not endorse candidates for elected office, we do encourage our employees to participate in public affairs, get involved

with volunteer efforts and contribute to the political party and candidates of their choice.

Cliffs may engage in political activities subject to all applicable laws and regulations. The Company conducts these activities with full

regard for applicable campaign finance regulations and election laws. In the United States, we operate three non-partisan Political Action

Committees (PACs), which are supported by voluntary contributions from Cliffs’ management and employees as permitted under United

States election law. These include CliffsPAC at the federal level and CliffsMichPAC and CliffsWVPAC at the state levels (Michigan and West

Virginia, respectively). In 2011, our PACs contributed nearly $51,000 to candidates for state and federal office. Contributions in support of, or

in opposition to, non-partisan referendum issues are permitted in states where not prohibited by law.

18

2011 Financial Results and Impacts

Cliffs contributes directly to the economy through employee wages and benefits,

operating costs, capital costs and contributions to the communities that we serve.

In addition to direct contributions to the economy, the economic impact study we conducted in 2009 estimated our economic “multiplier

effect,” which estimates that each Cliffs-created job supports 3.4 other jobs in the broader economy. The chart below describes the direct

economic value generated and distributed by Cliffs over the past four years.

OPERATE » OUR COMPANY

Direct Economic Value Generated

($ in Millions) 2008 2009 2010 2011

a) Revenues $3,609.1 $2,342.0 $4,682.1 $6,794.3

b) Operating costs $2,125.5 $1,673.7 2,678.2 3,519.9

c) Employee wages and benefits 544.8 438.1 733.7 925.8

d) Payments to providers of capital (interest) 63.5 57.2 103.1 294.0

e) Payments to government (taxes)

U.S.

Canada

Asia Pacific

Brazil

Other

184.3

0.7

80.3

—

—

91.1

0.1

48.9

—

—

197.1

15.5

79.3

0.3

—

288.6

109.6

47.8

0.7

2.0

f) Community investment 1.4 2.8 2.4 4.0

SUBTOTAL $3,000.5 $2,311.9 $3,809.6 $5,192.4

ECONOMIC VALUE RETAINED $608.6 $30.1 $872.5 $1,601.9

GROW

19

As we continue to make progress towards embedding sustainability into our

operations at Cliffs, a growing number of departments are utilizing sustainability as

a tool to enhance their individual environmental, social, economic and governance

performance. Through these efforts, Cliffs will continue to make progress towards

sustainable growth.

We made progress in further integrating sustainability into our

operations and creating strategies for responsible growth by

engaging leadership and establishing a governance structure

to oversee sustainability at Cliffs.

With the official creation of the Strategy and Sustainability

Committee within the Board, Cliffs has recognized that

sustainability is central to our long-term viability and will be

monitored at the highest level of governance. Our Executive

Leadership Team (ELT) is keenly aware of the importance

sustainability has on Cliffs’ day-to-day operations and our

opportunities for growth. This elevates the importance of

sustainability throughout the Company. It also provides a

governance structure that supports sound management of

our sustainability strategy.

20

GROW » OUR COMPANY

Governmental Affairs 2012 Objectives

Cliffs’ Government Affairs group is dedicated to representing the Company’s business interests and the needs of the communities where we

operate before state, provincial and federal governments. To that end our objectives for 2012 include:

Communicating and partnering to access the technical expertise

within Cliffs so we can more proactively and effectively advocate

for public policies that support our operations.

Incorporating leading practices into how we work as a team and

how we approach our advocacy efforts.

Managing our resources to achieve the highest and best use of our

time and our various trade and business association memberships.

Growing our state and federal political action committees so Cliffs

has a strong voice in the political process.

Maintaining and enhancing Cliffs’ reputation as an honest,

responsible and progressive company within industry and

government circles.

Continuing to operate with the utmost transparency and exceeding

compliance with lobbying and campaign finance regulations.

In addition, as Cliffs continues to expand its international presence, we will devote resources to representing the Company’s interests

in Canada and other jurisdictions where Cliffs maintains operations.

SUPPLY CHAIN EMBEDS BEST PRACTICE IN BUSINESS SYSTEMS

Recognizing the importance of risk minimization, enhancement of controls and the continuous improvement of business systems

as drivers of value creation, the Supply Chain team developed and continues to refine a formalized process to proactively monitor

and report remediation status of the findings and improvement opportunities identified by Cliffs’ Internal Audit team. Supply Chain

management also included successful and sustained remediation as a specific performance goal for all departmental managers. This

approach drives accountability and more effective remediation by establishing specific, measurable and time-bound remediation plans

with appropriate monitoring. The outcome is an increased likelihood of timely, successful and sustained remediation which drives

increased value to the organization.

TANGIBLE VALUE INTANGIBLE VALUE

For Cliffs •Improved accuracy and performance through

effective and sustained remediation

•Increased value through continuous monitoring

and process improvement

•Minimized risk

•Increased employee engagement

•Reinforced Core Values

•Improved inter-departmental interaction and

collaboration

•Enhanced ownership and accountability

For Others •Improved organizational performance – positive for

shareholders

•Improved responsiveness to market through

Supply Chain improvements

•Enhanced approach benefiting suppliers

•Improved efficiency

•Improved transparency and accountability

Creating Value through Implementing Best Practices

21

GROWOPERATEEXPLORE

At Cliffs, we create both direct and indirect value by exploring

opportunities to improve environmental, social, economic and

governance performance, creating best practices around our

core business and acting as a responsible corporate citizen.

Our OperationsEXPLORE

22

Management Approach

Safety, business excellence and financial discipline are core to our success and are

executed at all levels of the Company. Our Global Operational Services’ (GOS) focus

on internal customers helps us find new opportunities that generate returns for Cliffs,

our shareholders and our stakeholders.

In 2011, efforts included the implementation of new systems and standards of

excellence across Cliffs globally, continuing to build operational excellence and

business success. Specific examples include the ongoing implementation of our

ISO 14001 environmental management systems, our global talent management

system and enhanced supply chain practices.

EXPLORE » OUR OPERATIONS

23

OPERATE

2011

30.44

Deeply rooted in our history, safety is our most important Core Value as we

continue our journey towards a zero incident culture at our operating facilities.

Safety

We seek to achieve this through good housekeeping and

orderly work areas, well-maintained equipment, proper

training, looking out for colleagues and providing safe

working conditions. Through these practices, safety is an

integral part of day-to-day operations at Cliffs – a core value

in everything we do. We also incurred zero fatalities at our

operating facilities globally.

We continuously monitor, track and measure our safety

performance and make timely changes where necessary.

Best practices are shared globally through conference calls

and our annual safety conference to ensure each mine

site can embed our policies, procedures and learnings for

enhanced workplace safety. Our strategy consists of three

major components – governance, proactive initiatives and site

implementation planning.

2011 was a year of continued program refinements and as a

result of these efforts, Cliffs improved safety performance with a

total reportable incident rate of 2.70 and a lost days severity rate

of 30.44. As Cliffs grows, we continue to integrate internal and

industry best practices into our new operations and mine sites.

Our goal is to have seamless lines of communication and safety

practices in place before beginning production. Keeping our

employees safe is more than a goal – it’s the way we operate.

Total Reportable Incident Rate

(per 200,000 hours worked)

Lost Days Severity Rate

(per 200,000 hours worked)

2011

2.70

2010

2.93

2009

2.99

2008

3.70

2010

51.96

2008

57.80

2009

58.60

8%REDUCTION OVER 2010

42%REDUCTION OVER 2010

Total Reportable Incident Rate (“TRIR”) is the rate of reportable injuries requiring medical treatment, restricted duty, and LT combined per 200,000 hours worked – calculated as the number of RI x 200,000 divided by total hours worked by all employees.

Lost Day Severity Rate (“LDSR”) is the rate at which normal roster workdays or shifts are lost as a consequence of LT injuries per 200,000 hours worked – calculated as the number of lost shifts x 200,000 divided by total hours worked by all employees.

24

OPERATE » OUR OPERATIONS

Cliffs Strategic Sourcing Methodology

Supply Chain

A sustainable supply chain provides benefits well beyond Cliffs’

operations by expanding and leveraging the work of our supply

chain partners.

Sustainability metrics are included in the selection criteria built

into the extensive supplier questionnaires. Feedback from

these questionnaires provides insight into where Cliffs, and our

vendors, can further improve environmental, social, economic

and governance performance. By engaging with suppliers to

increase awareness and influence their sustainability strategies,

we have seen suppliers propose innovative solutions to challenges

our operations face. Additionally, our supply chain team include

sustainability success factors in their balanced scorecards,

reinforcing accountability through performance evaluations.

This practice further encourages employees to implement smart

environmental, social, economic and governance processes in their

daily management responsibilities.

Another example of improving business practices can be seen in

the way we source the energy to run our operations. By purchasing

energy wholesale across multiple operating locations and allocating

the cost benefits to each mine site, we leverage the scale of our

operations. Whenever possible, we utilize a weighted average cost

of natural gas and electricity to provide advantageous rates through

bulk purchasing. This practice saves money and resources at our

mining operations.

In addition to the sizeable opportunities such as energy savings,

we pay attention to every opportunity to improve efficiencies.

In 2011, we were able to:

1 Reduce plastic consumption by utilizing returnable water

containers to eliminate 120,000 16oz bottles annually.

2 Reduce paper usage by 55,000 sheets annually.

3 Reduce USIO and NAC surplus and obsolete inventory

leading to a 42% increase in supply inventory turns.

4 Recycle diamond tip drills, pressure castings and

corrugated packaging to better recover and reuse key

raw material inputs.

5 Implement an alternative rotary fan technology at Tilden

to reduce energy consumption in the rotary kilns.

Strategic Sourcing

Cliffs uses a structured seven step approach to strategically source all purchases greater than $1 million, resulting in stronger relationships,

reductions in emissions and environmental impacts, and cost savings. This approach allows us to evaluate each contract on a total cost of

ownership basis, taking into consideration not only purchase price, but the cost of operating and maintaining the product or service over the

life of the product or contract. Through the application of this disciplined approach, Cliffs is realizing increasing benefits from the products and

services we use.

Assess Opportunities /Baselining

Profile Internally & Externally

Conduct Competitive Bidding Event(s)

Screen Suppliers & Create Selection Criteria

DevelopStrategy

Shape & Negotiate Agreements

Implement Agreements

ImplementationSourcing and NegotiationStrategy / Options Formulation

25

MICHIGAN COAL FLUXSTONE HAULING

Cliffs’ Strategic Sourcing Team partnered with our Michigan operations to conduct a comprehensive strategic sourcing initiative addressing

fluxstone hauling requirements from the port to our operations. As part of the initiative, several total cost components and factors were

thoroughly examined, utilizing our fact-based strategic sourcing process. This project explored opportunities to reduce hauling loads through

demand optimization, improved safety standards and advanced emissions controls. As an outcome of the project, the team was able to

deliver significant sustainability benefits, including:

Establishing a safety belt and cell phone policy for operational truck

drivers who had been observed not wearing safety belts and using

cell phones while driving.

Implementing a speed limit policy to reduce vehicle speed limits.

Implementing load cells to monitor truck weight and ensure safe

levels are maintained and would not exceed Michigan Department

of Transportation limits.

Through logistics engineering and more precise demand

management, Cliffs reduced truck loads and truck traffic by 31

percent annually thus reducing emissions and saving money.

Implementing stronger specifications on hauling companies

requiring the latest emissions and noise reduction technology on

the trucks, thereby reducing the impact on the local community.

These practices improved our operational performance, increased safety precautions and reduced the environmental impacts of our

operations. Efficiencies achieved by this effort reach beyond our direct environmental footprint; however, we strive to incorporate them

wherever possible as they are meaningful both to our operations and to the communities that we impact.

TANGIBLE VALUE INTANGIBLE VALUE

For Cliffs •$1.2 million cost reduction

•Reduced truck carbon footprint by 4-8%

(equivalent: 26,000 gallons of diesel or 40+ cars)

•Increased haul capacity

•Environmental and social responsibility

•Goodwill

•Brand reputation

For Others •Reduced noise pollution

•Truck traffic reduced by 31%

•Reduced road impact (fewer trucks/lighter loads) –

less wear and tear on the roads

•Improved community relationships

Creating Value through Michigan Flux Stone Hauling

26

OPERATE » OUR OPERATIONS

Customer Satisfaction

Our customers are essential to our operations and growth. We work to maintain and

increase customer satisfaction through regular engagement with our customers

utilizing phone calls, on-location meetings, our bi-annual Customer Quality Conference

and annual quality performance reviews.

From this engagement, we receive customer feedback which

allows us to implement thoughtful responses and timely process

improvements to ensure we achieve the quality expectations of

our customers.

Cliffs’ focus on customer satisfaction begins with developing

a clear understanding of expectations and by selecting

products and facilities with proven capability to deliver on those

expectations. A certificate of analysis is generated with each

shipment based on the analyses requested by each customer. The

analyses are compared to customer specifications. Any deviation

from requirements triggers the generation of a Non-Conforming

Cargo Report (NCR). The NCR report lists the non-conforming

analysis, a description of the process that is at the root of the non-

conformance, and a description of the actions taken to correct the

current issue and prevent it from recurring.

Cliffs measures the NCR occurrence by site and customer,

tracking the ratio – NCR/Million Tons Shipped (NCR/MTS). Each

site reports compliance with internal specifications that are

identified drivers of customer-determined specifications, process

capability to meet customer requirements and NCR/MTS by month

and year to date. Cliffs’ stated goal is to drive NCR/MTS to zero at

all sites. This practice is achieving solid results with a continued

reduction in this high-level metric.

Our United States Iron Ore business unit has improved

performance and achieved stability in our non-conforming cargos.

We expect our other business units to achieve similar performance

in the years to come.

Non-Conforming Cargo Reports USIO (United States Iron Ore)

(per million long tons shipped)

2011

2.8

2010

3.1

2009

3.3

Non-Conforming Cargo Reports NAC (North American Coal)

(per million short tons shipped)

2011

31.7

2010

31.3

2009

16.6

Non-Conforming Cargo Reports ECIO (Eastern Canadian Iron Ore)

(per million metric tons shipped)

2011

4.9

2010

4.5

2009

4.4

Note: Due to a change in our business unit reporting, we are not able to report our 2008 results.

GROW

27

Over the past year, we have focused on preparing to embed sustainability in our

operational systems for responsible growth. Doing so is critical to our bottom

line and is an opportunity to drive excellence, innovation and stretch industry

boundaries. As we expand globally, we have the opportunity to share best

practices, extend our safety culture, enhance our supply chain responsibility,

grow our customer relationships and realize the tangible and intangible benefits

of our business impacts.

28

Supply Chain 2012 Activities

Expanding, standardizing and globalizing effective energy use,

while optimizing energy procurement will be key success factors

in our 2012 strategy. We will:

Work with our global operations to coordinate purchasing diesel

and natural gas to maximize efficiency and minimize expenses

leveraging the size and scale of the business.

Share best practices across our global operations by

communicating with site energy managers on technological and

process developments to increase efficiency and provide electricity,

power and fuel savings.

Formalize energy charters, along with frameworks for energy trade,

transit and investments.

Business Improvement

Business Improvement at Cliffs drives sustainable results across

the organization by leveraging tools and methodologies such as

Lean Manufacturing, Six Sigma and internal frameworks such as

our Stability Foundation, to drive continuous growth and efficiency.

As we expand globally, Business Improvement shares and embeds

our best practices across our new locations. Sharing what we

learn across divisions globally helps us continually streamline and

optimize our processes and use of resources.

Business Improvement provides training, mentoring and project

facilitation while encouraging improvements and project ownership

throughout our organization. As we look to further increase

satisfaction to external customers, we are implementing aspects of

Business Improvement into all employee job responsibilities

by 2015.

By focusing on safety and improvement of our business operations, Cliffs is creating tangible and intangible value to sustainably grow Cliffs

and enhancing the ability for us to retain our license to operate.

GROW » OUR OPERATIONS

TANGIBLE VALUE INTANGIBLE VALUE

For Cliffs •Better safety numbers

•Reduced waste

•Reduced cost

•Supply chain awareness

•Community engagement

•Innovation

•Goodwill

For Others •Safer work environment

•Benefits in our communities

•Increased supply chain sustainability standards

•Positive impact on community

Creating Value through Business Improvement

29

GROWOPERATEEXPLORE

In 2011, Cliffs added more than 900 positions globally,

a 14% increase (net of turnover) over 2010 and a 39%

increase over 2009. As we grow our talent base, our

employees represent an even broader diversity of

cultures and skill sets across our operations.

Our TeamEXPLORE

30

Turnover by Region 2011

(by region)

UNITEDSTATES

CANADA

ASIAPACIFIC

326

84

50

Management Approach

We foster a fair, respectful, safe and healthy workplace for our 7,404 employees.

We strive to maintain safe work environments to reduce safety

incidents and immediately report any incidents, injuries and

hazardous equipment or situations. We uphold our Core Values

of Trust, Respect and Open Communication by expecting

transparency, encouraging independent thinking and embracing

diversity. The Cliffs’ Code of Business Conduct and Ethics

represents our commitment to the highest standards of business

conduct and ethics, integrity and attendant compliance reporting in

accordance with all applicable laws. Our Code of Business Conduct

and Ethics is the foundation of our management philosophy and

the standards by which we conduct business, and can be found at

ir.cliffsnaturalresources.com/governance.cfm.

EXPLORE » OUR TEAM

Cliffs’ Workforce Year-End 2011

Male Female Total

EXECUTIVE 21 1 22MANAGEMENT 622 119 741ADMINISTRATIVE 1,260 367 1,627PRODUCTION (HOURLY) 4,811 203 5,014TOTAL 6,714 690 7,404

Year-End Headcount

2009

5,404

2010

6,503

2008

5,670

2011

7,404

13.9%INCREASE OVER 2010

FEMALEMALE

31

OPERATE

Health and Wellness

At Cliffs, we believe that successful operations require a strong

and healthy workforce. With this in mind, we provide our

employees with health and wellness programs, activities and

tools to help them engage in healthful lifestyles. By operating

with a wellness mindset, Cliffs can increase productivity, manage

absenteeism, and control the rising costs of health care and

preventable disease. Improved morale and lower stress levels

contribute to a better company and work environment for all.

In 2011, Cliffs facilitated a variety of wellness programs

and benefits for employees, including health assessments,

online health management programs, onsite screenings, and

community wellness events such as walking events and ‘lunch

and learns’. We also offer fitness programs and reimbursements

for our employees to provide flexible options for making exercise

a part of their daily routine. In 2011, we saw a 44 percent

increase over 2010 in health assessment participation levels,

signaling successful utilization of our programs.

As a result of these efforts, we reached:

1,034 employees through our fitness programs

253 employees through worksite wellness events

252 employees through online wellness management

programs

1,713 employees through health assessments

Our global operating presence spans four countries, requiring a global approach

to employment practices. In 2011, we launched a new talent management system

to track and control our recruitment and hiring process across the enterprise. This

tool is essential in attracting top talent to an increasingly competitive environment,

especially in a growth year such as 2011 where we expanded our employment

base by 1,361 employees globally.

We are committed to helping our employees develop to their

full potential. To that end, we are in the process of integrating

a global human resources system across our locations.

These systems will contribute to managing our business

and standardizing employee development and management

processes.

Whenever possible, Cliffs hires workforce directly from the

local communities in which we operate. This practice benefits

local communities economically, while providing Cliffs with a

greater understanding of local needs. However, operational

priorities or constraints in the local workforce sometimes

dictate that Cliffs utilize ‘fly in, fly out’ staffing, where seasoned

workers are flown in to supplement local workers on a

temporary basis. To maximize mutual benefit, Cliffs works with

communities to develop and hire local talent, providing the

training and skills that are essential to Cliffs’ operations and

other employment opportunities.

32

OPERATE » OUR TEAM

Training and Development

Well-trained employees improve Cliffs’ performance and deliver

value to our stakeholders. In 2011, Cliffs continued to strengthen

development programs to expand the capabilities of the Company

and create career paths for our employees. These programs allow

us to hire and develop talent, while our newly implemented talent

management system enables us to identify, support and grow

global talent on a single technology platform. This system helps

us identify and attract talent and assist our hiring needs. Our talent

management practices are working in tandem to support our

business growth and opportunity.

Cliffs’ employee training, development and talent management

approach delivers fair and consistent performance assessments,

provides learning and development opportunities, identifies and

nurtures high-potential individuals and ensures a solid Cliffs

succession plan. We are continuing to make progress towards our

goal of providing regular performance reviews with 100 percent

of our salaried employees. We also conduct an annual review of

Cliffs’ career development programming to evaluate our success

in creating pathways for our employees.

Our training programs are designed to enhance current skills

and anticipate the need for future skills to help our employees

on the job and in their career development. Our training and

development programs include safety and operational excellence

training, leadership and business basics, maintenance, mining

and on-the-job apprenticeships. In 2011, 99.8% of salaried

employees in management and non-management positions

completed our Code of Business Conduct and Ethics training.

In 2012, we expect all salaried employees to complete the Code

of Business Conduct and Ethics training. Because individuals

learn in different ways, courses are offered in person through

classroom or simulation activities and through Cliffs College,

our online learning system.

In addition to the general overview on anti-corruption provided in

the Company’s Code of Business Conduct and Ethics training, the

Company conducted additional in-depth training in 2011 with 320

key managers and employees across the globe in functional areas

including legal, audit, business development, commercial, supply

chain, exploration, operations, finance, public and government affairs,

environmental, sales and marketing.

Code of Business Conduct and Ethics Training

MANAGEMENT NON MANAGEMENT NON PARTICIPATING

2,214Total Salaried Employees

2,210Total Participating Employees

717

1493

4

GROW

33

Cliffs views sustainability as a talent attractor and differentiator. This is a critical

leverage point given the pace of our growth and our increasing need to attract and

retain qualified talent. We have seen a 938% increase in job applications, requiring

us to employ analytical tools to ensure that we reach a broad and diverse talent

pool and that we hire only the most talented, qualified candidates.

34

As a global company, we strive for diversity, gender balance in pay and opportunity

and stronger local hiring practices, including engagement with new workforces in

Indigenous communities.

Cliffs understands that mining is new to many of the communities

we enter, and that some of these areas may not offer a workforce

skilled in our operational needs. In light of this, we continue to grow

our training and development programs, offering opportunities to our

current and future employees to expand their skill sets and remain

competitive in the job market.

By investing in our employees, Cliffs is working to secure future

returns and enhancing our license to operate. Through these

investments, Cliffs is adding tangible and intangible value to both

the Company and the communities where we operate.

GROW » OUR TEAM

TANGIBLE VALUE INTANGIBLE VALUE

For Cliffs •Healthy employees

•Evolving workforce

•Stronger employee retention

•Stronger community presence

•Employer of choice

•Awards and recognition

For Others •Training, health and wellness benefits

•Productive workplace

•Opportunities for advancement

•Diverse, collaborative environment

Comparison of Average Salary by Gender and Job Category

(USD)

Male Salary Female Salary Female to Male Ratio

EXECUTIVE $363,072 - *MANAGEMENT $121,919 $113,870 93%ADMINISTRATIVE $75,142 $61,958 82%HOURLY $57,674 $55,503 96% * There is only one female in the executive category, please reference the Company’s Proxy Statement for information regarding executives compensation.

Creating Value through Our Employees

35

GROWEXPLORE OPERATE

Our communities are important to Cliffs’ exploration,

operation and growth. From actively engaging with First

Nations and Indigenous peoples to considering the

breadth of cultures we interact with, Cliffs takes pride in our

commitment to the communities in which we operate and

strives to foster open relationships with our stakeholders. We

manifest this commitment through community outreach and

involvement, social investment and active engagement in the

betterment of our communities.

Our CommunitiesEXPLORE

36

Management Approach

Our community relationships are important for maintaining our license to operate

and to our employees and stakeholders. Because of the importance of our

community relationships, we always consider Cliffs’ neighbors in our decision-

making processes. Through our engagement efforts and social investments, we help

to support communities that sustain our operations, our employees and their families

into the future.

EXPLORE » OUR COMMUNITIES

37

OPERATE

Social Investment

Cliffs has a long standing tradition of giving back to the

communities where we operate. Investing in our communities is

the right thing to do and provides critical resources to the places

Cliffs’ employees call home. We allocate spending through

facility-based discretionary giving, The Cliffs Foundation and

our support to the United Way.

In the United States, The Cliffs Foundation supports efforts

aimed at enhancing the lives of those in the communities in

which we operate and directs its resources into four categories:

education, health and human services, cultural resources and

civic-related projects. Growing into new territories will require us

to be thoughtful and disciplined about our giving approach. As

a large organization, we are working to ensure our community

partnerships are aligned strategically with common priorities.

$2,419,912Cliffs Foundation Giving

$982,032Local Contributions

$686,796U.S. and Canada United Way

Major Charitable Contributions 2011

(USD)

Cliffs Foundation Giving 2011

(by category)

$1,309,018

$855,394

$167,500

$88,000

Education

Health & Human Services

Culture

Civic

38

OPERATE » OUR COMMUNITIES

2011 community contributions highlights include:

Cliffs participated in several Public Advisory Committee meetings and

one public hearing related to the relocation of Highway 53 adjacent

to our United Taconite’s Thunderbird Mine in Eveleth, Minnesota.

During these meetings, we answered questions and updated the

public on the highway project plans. We continue to maintain regular

communication with the Minnesota Department of Transportation as

they consider a future route for the relocated highway.

In September 2011, we improved safety and reduced congestion

of vehicles and pedestrians in Esperance, Western Australia with

the opening of the Sim Street Bridge, a $9.9 million investment

by Cliffs. Community members participated in the opening of this

vital overpass with a community day, raising $28,500 towards

the purchase and installation of laser eye surgery equipment at

Esperance Hospital. Community members also assisted with

planting local plant species on the surrounding site of the bridge

to reflect its bushland origins.

Cliffs pledged $250,000 to the Marquette General Health System

to support state-of-the-art cancer care to Michigan’s Upper

Peninsula. The donation helped Marquette General purchase a linear

accelerator that produces a radiation beam used to treat cancer.

In response to unprecedented levels of opiate addiction among

two First Nations communities near the proposed chromite mine

in northern Ontario, Cliffs contributed more than $200,000 in

support of drug treatment programs. Cliffs’ donation supported

a withdrawal management program that uses a substitution drug

that tapers off over a 30-day period until clients can be taken off the

drug completely or continue on short-term, low-dose maintenance.

Cliffs provided support for the first phase of the program in two

communities in consideration of their proximity to the proposed mine

site for which a healthy, capable workforce will be essential.

Thanks to a $100,000 donation from Cliffs in support of the Ronald

McDonald House in Newfoundland and Labrador, families have a

place to go when faced with the reality of a critically ill or injured child.

The newly constructed facility provides an environment where families

can go about their regular routines, such as eating dinner as a family,

doing laundry and spending time together as much as possible.

A team of Cliffs employees assisted with construction and project

administration of Habitat for Humanity homes near our Wabush

Mine’s Scully operation in Labrador, Newfoundland. In addition to

employees volunteering their time, Cliffs pledged $60,000 towards

the project.

Cliffs recognizes the importance of creating safe spaces for the

children in the community and is the major funder of the Wyoming

County, WV Youth Center, providing $25,000 in grants – including

$10,000 as a matching grant. The Youth Center provides children

with a supervised and safe environment, recreational experiences

and a positive alternative to the prevalence of drugs and isolation

that exist in the county.

To enhance scientific learning for children in Wyoming County, WV,

Cliffs is leading an effort to build an outdoor environmental classroom

on land owned by Cliffs. The Cliffs Outdoor Classroom will enhance

classroom teaching with real world observation and experiments.

Communities and the Environment: Access to Natural Areas

One of the ways we tangibly demonstrate our commitment to

our local communities is by granting public access to certain

non-operating areas that Cliffs owns. The Company provides

communities with long-term access to land for camping leases,

roadway and utilities easements, park leases and residential sites.

Many of these areas are scenic, undeveloped tracts, providing a

variety of habitat to the unique biodiversity of the area. By offering

public access to these lands we give our neighbors the opportunity

to experience and enjoy the outdoors and improve our relations with

the communities in which we operate.

39

Community Engagement

Establishing and upholding Cliffs’ reputation in the communities in which we operate is essential to maintaining our social license to operate.

The Company engages with its local communities by providing updates about Cliffs, educating the public about our operations, responding to

community concerns, and through social investment projects and volunteerism. Through these ongoing engagement activities, Cliffs is able to

assess its efforts and relationships first hand, and respond and plan accordingly.

LAKE SUPERIOR COMMUNITY PARTNERSHIP OF MARQUETTE COUNTY

With more than 1,500 employees of the Empire Mine and Tilden

Mine living in the Marquette County area, we recognized the need

to identify and develop a strong, local partnership. Lake Superior

Community Partnership (LSCP), a leading resource for economic

development providing a variety of affordable and effective

development programs, serves as our partner. Cliffs and the LSCP

work together in Marquette County to educate stakeholders, build

community relationships and assess how Cliffs can better assist the

community development.

In Marquette County, we face an aging workforce and a lack of

skilled labor to replace the retiring talent. By advancing our training

and development programs in partnership with the LSCP, we are

creating opportunities for this region to flourish and sustain its

livelihood, building a skilled workforce for future generations.

Other successful ventures with the LSCP include the organization’s

partnership with Cliffs on the Michigan Iron Nugget project. Together,

we worked with local government officials and the community to

secure the necessary permitting requirements and incentives for

the project. While this particular project did not come to fruition, we

continue to benefit from the positive collaboration, strengthening our

relationships with the local government and community.

TANGIBLE VALUE INTANGIBLE VALUE

For Cliffs •License to operate

•Skilled workforce

•Succession planning

•Stakeholder engagement

•Goodwill

•Strong reputation

For Others •Partnerships

•New jobs

•Population retention

•Economic growth

•Training

•Advance community support

•Active engagement with local employer

Cliffs Cares Day

At our corporate headquarters in Cleveland, Ohio, employees

volunteer annually to participate in Cliffs Cares Days – when teams

of employees work together to benefit local causes. In addition

to giving time and service to our community, Cliffs Cares Days

provides the opportunity for our employees to work as a team and

interact outside of the office environment. These events introduce

our employees to non-profit organizations with which they may not

otherwise be familiar. In 2011, Cliffs’ employees volunteered at Hiram

House, the Boys and Girls Clubs of Cleveland and Fairhill Partners

where they assisted in a variety of ways, including indoor/outdoor

cleaning and maintenance activities, painting, landscaping, repair

projects and minor construction improvements. Through Cliffs Cares

Day, we support our local community, strengthen relationships and

expand our understanding of the local community and each other.

Creating Value through Community Collaboration

40

Communities and the Environment: Crisis Management

Cliffs operates as a responsible corporate citizen, which includes

responding to our communities and operations in times of need.

We have outlined crisis management plans to help support our

communities and surrounding environments should an incident

ever occur. While preparing these plans, we involve each site’s

management teams and third-party experts to ensure we are

considering each sites’ unique attributes and situation. We run test

simulations and have trained teams at each site, ready to act when

help is needed. Cliffs reviews its plans and procedures several times

per year to adjust to trends, industry-wide incidents and personnel

changes. Our preparedness, capacity and response time allows us

to carefully navigate situations while thoroughly executing our plans.

Cliffs’ preparedness in a crisis situation was put to the test when

tornadoes struck Alabama in April 2011.

OAK GROVE DISASTER RECOVERY

When disaster strikes our communities, it’s personal. Our

employees, their families and neighbors drive our passion and

efforts to respond in a timely and thoughtful way. On April 27, 2011,

devastating tornadoes struck Alabama, tearing apart communities

that surrounded our mine and preparation plant. A number of people

died in the community and hundreds of homes were destroyed or

damaged. Cliffs responded to the tragedy by donating $100,000

to the local Red Cross and more than $60,000 to the many hard-

working organizations on the ground in the days and weeks

following. In addition to assisting the communities near our facilities,

Cliffs was faced with the daunting task of rebuilding our Concord

Preparation Plant, which took a direct hit from a tornado. During

the time when the plant was being rebuilt, Cliffs kept our Oak Grove

Mine operating and more than 500 miners employed building coal

stockpiles on site. Since this disaster, we have rebuilt the preparation

facility and are restoring it to full production.

OPERATE » OUR COMMUNITIES

TANGIBLE VALUE INTANGIBLE VALUE

For Cliffs •Protecting people and our operations

•Rebuilding of operations

•Increased goodwill and awareness of Cliffs

•Speed of recovery

•Strengthened relationships with community

organizations

For Others •$100,000 donation to Red Cross

•$60,000 to support organizations

•Rebuilding of community

•Community and company cooperation

•Strengthened relationships and more possibility for

collaboration with Cliffs

Creating Value through Tight Knit Communities

GROW

41

As Cliffs grows, we touch new lives, enter new communities, and evolve our

sustainability strategy to remain a good corporate citizen on the forefront of both

our communities’ and our industry’s challenges. Whether offering assistance

through local spending, disaster relief or by working in the communities with our

neighbors, our community engagement activities go beyond the need for a social

license to operate. Community engagement is central to Cliffs’ Core Values and

operating philosophy.

42

GROW » OUR COMMUNITIES

Indigenous Peoples

Cliffs operates its mines in areas of the world where Indigenous

peoples have lived for many generations. Respecting their heritage

and taking the time to better understand their cultures and the

specific needs of each community is critical to Cliffs. To that end,

we propose mutually beneficial agreements with Indigenous

groups to increase cultural awareness and lay the foundation for

local economic growth and independence. We also engage in

activities such as ‘meet and greets’ and open houses to increase

transparency and dialogue. These tools are being used successfully

at our chromite project to better understand the specific needs of the

native communities in Northern Ontario. Globally, these activities are

particularly important when introducing Cliffs to a new community.

Cliffs understands and deeply respects the responsibilities

associated with culturally sensitive heritage sites, and we strive to

create positive relationships within these regions.

As Cliffs grows and secures new mineral assets globally, we continue

to engage open and honestly in our interactions with every new

community and culture that we encounter. We continue to seek out

new opportunities to learn from the Indigenous peoples that we

meet. This is consistent with the approach we have taken for more

than 160 years.

Community Objectives

Cliffs’ public affairs goals are enterprise-wide and cover the following topics:

Partnering and communicating with stakeholders on projects and

issues of interest.

Educating communities and stakeholders about Cliffs’ current and

proposed mine operations and business practices.

Providing social investment vital to Cliffs’ communities.

Participating in the integration of sustainable business practices.

We continue to make progress towards advancement of these priority areas.

43

GROWOPERATEEXPLORE

Environmental stewardship is essential to Cliffs’ long-term

success and is a Core Value of our business. As we

continually explore opportunities to improve our operations,

we expect our employees to practice sound

environmental management.

Our EnvironmentEXPLORE

44

Management Approach

We strive to be world-class in our approach to environmental stewardship.

Mining and mineral processing make a vital contribution to world

development by providing the essential raw materials for products

for modern society. Cliffs recognizes that extraction and processing

of the earth’s mineral resources must be accomplished in a

responsible manner that minimizes impacts on the environment

and the community. The Company believes that stewardship with

proper concern for the environment is an essential element of

a successful business strategy and subscribes to the tenets of

sustainable development.

As we identify opportunities to grow our operations organically, we

are developing and embedding strong environmental management

systems and procedures. This enables us to be strategically

positioned for continued responsible growth while protecting the

human and natural systems for long-term success. Our strong belief

in environmental stewardship provides the path forward to explore,

operate and grow.

Our management approach uses sound science as a foundation,

supported by a variety of standards and policies, including:

Code of Business Conduct and Ethics

Climate Change Policy

Greenhouse Gas Strategic Plan

Environmental Policy

Environmental Compliance Auditing Policy

Environmental Reserves and Disclosure Procedures

Corporate Spill Reporting Procedure

Corporate Ozone Depleting Substance Procedure

EXPLORE » OUR ENVIRONMENT

45

OPERATE

With environmental concerns increasing in magnitude and complexity around the

world, we strive to improve environmental performance and maintain our social

license to operate.

2011 Key Successes and Challenges

In 2011, our processes and systems were tested with the rapid

expansion of our operations and incorporation of new locations,

as well as increased interaction with regulatory agencies and

external stakeholders. Despite these increased demands, we

maintained a comprehensive environmental stewardship program

with a foundation of sound science.

Cliffs voluntarily subjected components of the chromite project

in Northern Ontario to an individual Environmental Assessment

(EA), the most stringent type of provincial EA process. In addition,

Cliffs worked with federal and provincial regulators to develop a

coordinated EA review process that integrates requirements of

the provincial individual EA and federal comprehensive EA. This

will help ensure a consistent EA review process for stakeholders

and multiple opportunities for public participation throughout the

EA process.

In Australia, new carbon emissions regulations will take effect in

2012, increasing the costs of fuel consumption. This provides a

challenge and opportunity for Cliffs to develop new efficiencies at

our Australian facilities.

Our focus on connecting the management of our environmental

controls to scientific data supports a sound science approach,

enabling Cliffs to manage the increased enforcement of existing

laws as well as the continued expansion of laws in the United

States. In Minnesota, we continue working with the regulatory

agencies to identify scientifically based acceptable sulfate levels

and controls to manage our water discharges accordingly. Cliffs’

proactive approach in our operations is providing efficiencies and

reducing compliance related risks.

46

Environmental Management Systems

Strong operating systems are critical to sound environmental

management. We are committed to implementing independently

certified International Organization for Standardization (ISO) 14001

Environmental Management Systems (EMS) across our operations.

Using EMS processes and practices enable us to manage our

environmental impacts and increase our operating efficiency.

The ISO 14001 EMS framework provides consistent control over

operations, improving the environmental performance of the

Company. We currently have seven facilities with ISO 14001 systems

operational with two additional facilities on track for implementation

in 2012. Our goal of having ISO 14001 systems in place by 2011 was

delayed at our Pinnacle mine due to an interruption in operations

caused by elevated carbon monoxide levels in the mine and at Oak

Grove due to a devastating tornado. By systematically monitoring

our environmental performance, we are better able to implement

meaningful improvements at our sites.

OPERATE » OUR ENVIRONMENT

ISO 14001 Environmental Management Systems (EMS)

North American Iron Ore

Certified EMS

Empire*TildenHibbingNorthshoreUnited Taconite

NoYesYesYesYes

Eastern Canada Ore

Certified EMS

WabushBloom Lake

NoNo

*Empire is not scheduled to have the EMS ISO 14001 certified due to its limited mine life

** Pinnacle’s EMS received ISO 14001 certification on April 2, 2012

CAPITAL EXPENDITURES FOR ENVIRONMENTAL PROTECTION

We have significantly increased our investment in environmental protection over the past few years and are continuing this trend into 2012.

Our investment in people, systems and capital improvements enable us to establish robust environmental stewardship programs worldwide.

This demonstrates our commitment to the natural environment and the communities in which we operate. We estimate environmental capital

spending in 2012 to be more than $60 million, eight times our 2009 budget.

$7

2012

2011

2010

2009

$60*

$36

$21

*Estimated value

Capital Expenditures for Environmental Protection

(in millions)

Significant Fines and Sanctions

NUMBER OF NON-MONETARY

SANCTIONS

NUMBER OF DISPUTE RESOLUTION

SETTLEMENTS

VALUE OF SIGNIFICANT FINES

(>100K)

2008 1 0 $02009 1 0 $125,0002010 4 1 $02011 4 0 $0

Asia Pacific Iron Ore

Certified EMS

KoolyanobbingWindarling & Mt. Jackson

YesYes

North American Coal

Certified EMS

Oak GrovePinnacle**Logan County Coal

NoYesNo

47

Mine Development and Planning

Environmental permitting remains one of the mining industry’s

biggest challenges. We believe that being proactive in our

engagement with our community and regulatory stakeholders will

improve our license to operate. We work continuously to minimize

any setbacks, recognizing that delays in project development are a

significant financial and reputational risk to any mining company.

In 2011, we moved forward with organic growth initiatives at several

of our mine sites around the world. We worked with regulators in

Canada to make significant steps toward securing future mineral

extraction rights in Eastern Canada. At the chromite project in

Northern Ontario, we have begun the Environmental Assessment

process, which is a key initial step in the progression towards

obtaining the permits to mine. At Bloom Lake, near Fermont,

Quebec, we received permission to start the expansion of operations

from eight million metric tons (MT) to 16 million MT per year. This

progress allows us to continue to operate, grow and access the

mineral resources that power our economy.

Mine Closure

Closing our mine operations at the end of their useful life can have

a dramatic impact on the community. We are working in advance of

mine closures to mitigate the impact of our departure. We continue

to partner with the local communities to develop new opportunities

for economic progress. We also develop training programs to

strengthen the local economy in ways that can ease the transition

of Cliffs’ employees to occupations in other industries.

In Australia, new regulations are compelling us to plan early in the

mine lifecycle for mine closures. In response to these regulations,

we recently provided mine closure plans for all of our Australian sites.

This new requirement creates opportunities for us to review and

streamline our operations and motivates our team to consider mine

closure as part of the development and operation of our sites.

48

Water Management

Growing concern over water conservation and quality have become high priorities

for the mining industry worldwide.

As a global mining and natural resource company, we rely heavily

on water and understand the significant need and opportunity we

have to protect this finite resource. Our operating facilities use

water in the processing of products and to control fugitive dust

emissions. We withdraw water from both ground and surface

sources. At our iron ore operations in Asia-Pacific, groundwater

provides for most site water needs in the arid environment. At

our North American and Asia Pacific iron ore operations, we are

withdrawing large volumes of water from surface water sources,

groundwater sources and accumulated precipitation from the

mining area. The “dewatering” from the mining area enables us to

mine under dry conditions. Cliffs withdrew a total of approximately

276 million cubic meters of water and discharged approximately

402 million cubic meters in 2011. This is an increase over 2010

reported numbers due to the our newly acquired CLCC and

Bloom Lake mine operations.

Water conservation is an important component to our

management approach. In West Virginia, our Pinnacle complex

stores water for re-use in underground reservoirs. We recognize

that sustainable management of our water resource is integral to

our continued ability to operate in the communities that we serve.

An important part of our responsible management of our water

resources is managing the quality of water in the ecosystems

that surround our mining operations. One important factor we

monitor is selenium concentrations in the streams and waterways

surrounding our operations in Michigan and West Virginia.

Though naturally occurring, selenium levels can be elevated

in waters influenced by our operations. Elevated selenium

levels may impact the ecosystem. At our Pinnacle complex, we

successfully implemented our selenium management plan with

no exceedances in 2011. In Michigan, we are continuing to work

with the Michigan Department of Environmental Quality (MDEQ)

to refine our selenium management strategy.

OPERATE » OUR ENVIRONMENT

Total Water Use 2011

(by source in million m3)

Total Water Use

(in million m3)

2009

302.73

2010

260.40

2011

275.52

2008

316.07

5.8%INCREASE OVER 2010

Total Water Discharged to Surface Waters

(in million m3)

Total Water Discharged to Surface Waters 2011

(by type in million m3)

2009

380.3

2010

415.7

2011

401.8

2008

291.1

3.3%DECREASE OVER 2010

164.4Treated Process Wastewater

68.1Mine Water

169.3Non-Contact Cooling Water

Note: Restated 2009, 2010 total water discharged to surface waters

1.82Ground Water

0.53Rain Water

0.56Municipal Water

272.61Surface Water Use and Pit/Mine Dewatering

49

Land and Habitat Management

Maintaining our social license to operate requires responsible

management of our land and the habitats that surround our mining

facilities. Minimizing the environmental impact of our operations is

critical to the long term viability of our mining sites. In addition, as we

develop and expand into new land resources, we work cooperatively

with our stakeholders to reinforce our commitment to responsible

operations. Maintaining open lines of communication with our

stakeholders builds trust in the communities in which we operate and

with the regulatory agencies that permit our continued operations.

Mine closure and reclamation efforts provide the opportunity to

share natural areas with our communities and wildlife. Reclaiming

natural areas goes beyond just providing access. We understand

that we must operate with a goal of returning our sites to a natural

and ecologically healthy state after the mine’s productive life. Our

formal mining and reclamation plans consider responsible mineral

extraction, current and desired landforms, water resources and

management, plant and animal life, our neighbors and communities.

Cliffs operates in ways that minimize long-term landscape impacts

through reclamation of stockpiles, tailing basins and other mine site

features. We strive to exceed the minimum regulatory requirements

that govern reclamation of mined lands by creating forested areas,

grassy plains, wetlands and other regionally appropriate habitats

where possible. We must manage sites responsibly throughout their

lives to enhance the ability for these areas to have productive uses

after our mining activities have ceased.

Additionally, each of our operating locations identifies a “champion”

native species as a symbolic reminder of the importance of strong

environmental stewardship to our stakeholders. The champion native

species helps unify our broad set of environmental programs and

connect them to a species that is important to the local community

as a valued part of the natural environment.

As a mining and natural resources company, we impact a significant

area of land during our operations. Entering 2011, Cliffs’ operational

footprint was 57,737 hectares. In our 2010 report, we inadvertently

stated the incorrect amount of land disturbed or rehabilitated. The

correct numbers are reflected in the chart below.

Amount of Land Disturbed or Rehabilitated

(in hectares)

OPENING BALANCE NEWLY DISTURBED NEWLY RECLAIMED CLOSING BALANCE

2010 (Restated) 56,737 236 39 56,934

2011 57,737* 1,116 36 58,817

*Beginning balance for 2011 reflects the inclusion of Bloom Lake in our reporting boundary

50

OPERATE » OUR ENVIRONMENT

Energy and Emissions Management

Our industry is energy intensive and produces significant emissions in the

extraction and processing of our product. At Cliffs, we are making ongoing business

improvements in operations to reduce emissions and energy consumption which, in

turn, reduces our environmental footprint and drives down operating costs.

We saved approximately 407,000 gigajoules in 2011, the equivalent

to the energy in approximately 66,000 barrels of oil. These savings

have been realized through energy efficiency gains from retrofits and

behavioral changes in our operations.

The acquisition of CT reflects Cliffs’ strategy to build scale by owning

expandable and exportable steelmaking raw material assets serving

international markets. As we continue to expand and develop CT,

Cliffs’ overall greenhouse gas intensity for the iron ore sector will be

reduced. Bloom Lake, the operating open-pit iron ore mine asset

of CT, is situated in Quebec and connected to an electrical grid

that is comprised of 97% non-fossil fuel based generation. Further,

the new iron ore concentrator facility incorporates current best

practices for achieving efficiencies in the processing of ore. The

direct shipping of the concentrate eliminates the addition of Scope

1 emissions at Bloom Lake from the greenhouse gas intensive

process of pelletizing.

Total Direct Energy Use

(in million gigajoules)

Total Indirect Energy Use

(in million gigajoules)

2011

52.01*

2011

19.31*

2010

42.72

2010

17.26

2009

30.73

2009

11.90

2008

44.69

2008

18.30

Total Energy Use

(by source)

NATURAL GAS

COAL

DIESEL FUEL

FUEL OIL #6

INDIRECT (HYDRO)

INDIRECT (NON RENEWABLE)

OTHER

* The increase in total direct and indirect energy use in 2011 is a result of the increased boundary of reporting on CLCC and Bloom Lake.

51

Greenhouse Gas Emissions Strategy

Cliffs recognizes the potential environmental, social and economic impacts of a

changing climate and greenhouse gas emission regulatory frameworks. We are

committed to establishing and implementing a comprehensive emissions strategy

to mitigate potential risks and capture opportunities associated with these unknowns.

Our iron ore furnaces and kilns, coal thermal driers, diesel mining

equipment and a wholly owned power plant create the majority

of our direct emissions. Our operations are focused on reducing

emissions to manage our costs and to reduce the risk associated

with climate change. In 2009, we created a Greenhouse Gas

Strategic Plan that addresses our risks and opportunities related to

greenhouse gas (GHG) emissions for our U.S. operations. Building

upon this plan, in 2010, Cliffs established a Climate Change Policy

that recognizes the environmental and social value of reducing

greenhouse gas emissions GHG associated with our operations

enterprise wide. Through this policy, the Company is committed

to measuring and transparently reporting GHG emissions and

reduction strategies. The reduction of GHG emissions is driven

by the integration of carbon management into business planning

and by environmental management systems at our facilities.

By implementing plans for reducing our emissions, we also are

preparing our operating sites for potential climate change impacts

and GHG emission regulations, such as the regulations taking effect

in Australia during 2012. To learn more about our plan, please visit

http://www.cliffsnaturalresources.com.

Cliffs is committed to remaining transparent in our approach,

progress and challenges. We voluntarily measure, independently

verify and publicly report on GHG emissions through internationally

recognized frameworks. We are a founding member of the Climate

Registry and a working group member of the Coal Mine Methane

Project Protocol. In 2012, we are also reporting our 2011 emissions

through the Carbon Disclosure Project (CDP).

Direct Greenhouse Gas Emissions

(in million metric tons CO2e)

Indirect Greenhouse Gas Emissions

(in million metric tons CO2e)

2011

4.48

2011

3.79

2010*

4.47

2010

3.38

2009

3.31

2009

2.23

2008

4.36

2008

3.60

Regional Haze Prevention

Particulate emissions and haze are of concern to Cliffs and its

stakeholders. The emissions at our operations that contribute to

regional haze predominately are particulate matter (PM10 and

PM2.5), nitrogen oxides (NOx) and sulfur dioxide (SO2). These

contributing emissions come from combustion engines in the

equipment, and from emissions associated with our processing

facilities and other mining activities. In addition, we take measures

to minimize fugitive dust emissions to reduce any negative impact

our mining operations may have on our neighbors. Cliffs continues

to explore new ways to address the concerns of our mining

communities, with a focus on the safety and environmental welfare

of local communities.

*2010 restated to include the LS&I Railroad figures

52

OPERATE » OUR ENVIRONMENT

DUST ANALYSIS

In Australia, a major concern among our community stakeholders

is the level of dust in the air. The dust in our communities presents

potential human health problems and environmental impacts.

In 2011, we participated in an analysis of the dust in Esperance,

Western Australia and discovered that less than one percent can

be attributed to our iron ore near the rail line to the port and port

activities. By addressing this health and environmental concern

in an open and transparent manner, we were able to educate the

public on the contents of the dust and reassure our stakeholders

that our control systems are protecting the public from fugitive dust

emissions. This demonstration of stakeholder engagement and

follow through reminds us of the importance of proper management

practices and strong environmental procedures.

TANGIBLE VALUE INTANGIBLE VALUE

For Cliffs •Provides data on fugitive dust emissions,

verification of dust control measures

•Reduce risk

•Improved relationship with Cliffs

•Improved relationships with community

stakeholders

For Others •Data of dust emissions

•Environmental and health information

•Peace of mind

•Reduction in perceived risks

Materials Stewardship

Cliffs uses raw materials and associated process materials on a large scale. As we use these raw materials to meet the demands of our global

customers, we track recycling and disposal of waste and operate cautiously to avoid any spills or associated environmental impacts.

2008 2009 2010 2011

TOTAL RAW MATERIALS

IRON ORE - CRUDE (metric tons) 89,873,678 56,640,744 90,813,721 99,234,339

COAL (metric tons) 5,316,606 1,578,674 2,010,081 4,579,934

BENTONITE (metric tons) 259,287 144,644 235,202 254,208

LIMESTONE (metric tons) 1,398,215 991,440 1,503,244 1,449,188

DOLOMITE - 72,233 85,329 81,755

ORGANIC BINDER - 939 1,331 939

2008 2009 2010 2011

TOTAL ASSOCIATED PROCESS MATERIALS

COAL FOR FUEL (metric tons) 976,987 732,816* 971,332* 942,354

NATURAL GAS (gigajoules) 13,386,426 8,885,343 12,017,797 14,841,285

GASOLINE (liters) 3,101,381 2,623,154 3,148,043 3,650,863

DIESEL FUEL (liters) 107,073,599 68,527,909* 111,172,758* 183,099,627

FUEL OIL (gigajoules) 2,997,881 27,126,033 28,702,782 256,745

*Restated 2009, 2010 coal for fuel and diesel fuel

Creating Value through Stakeholder Concerns

53

Waste Management

Cliffs manages multiple waste streams at our mining sites and

operating locations worldwide. We have implemented recycling

programs at all of our mine sites where local facilities are available.

We also have implemented industrial recycling, reuse and

sustainable handling efforts around our various product lines.

Our most substantial waste issues include:

Coal Slurry Management – Coal is washed and separated from

refuse (non-coal rock) at preparation plants. Fine coal slurry, which

consists of coal fines within water, is stored in impoundments that

clarify the water by allowing the coal fines to settle out of the water

column. These impoundments are assessed for safety risks to

ensure structural integrity. Since acquiring our NAC properties, we

have a management practice to not inject coal slurry underground to

avoid potential ground water impacts.

Iron Ore Tailings Management – Iron containing rock (ore) is ground

to the consistency of talc powder and transported by water in the

process that separates the iron from tailings (ground rock within

the water at several operations). The tailings are stored in basins

that clarify the water by allowing the ground rock to settle out of the

water column. The basins are assessed for safety risks through dam

inspections to ensure structural integrity.

Total Hazardous Waste

(metric tons)

Total Hazardous Waste 2011

(by type, metric tons)

Total Non-Hazardous Waste

(thousand metric tons)

Total Non-Hazardous Waste 2011

(by type)

2011 2011

70.0312,450 87.71

2010

559.92

2010

40.05

2009

183.88

2009

84.20

2008

304.30

2008

Note: In 2011, the pH levels of landfill leachate collected at Northshore were temporarily elevated and resulted in the reclassification of the leachate from non-hazardous to hazardous. This accounts for the significant increase in hazardous waste being reported and a corresponding decrease in the non-hazardous waste.

12,085Recycled

143.08Incinerated or Used as Fuel

100.28Landfilled

121.72Other

REUSED ONSITE

REUSED/RECYCLED OFFSITE

INCINERATED OR USED AS FUEL

LANDFILLED

ONSITE DISPOSAL

54

Spill Management

At Cliffs, we operate with an understanding that impacts from spills must be eliminated.

In 2011, Cliffs launched a new Corporate Spill Reporting Procedure,

which was rolled out globally to all of our mining operations. The new

procedure focuses on releases that could harm the environment.

In our Asia Pacific Iron Ore unit, this includes saline water spills.

The procedure requires a root cause analysis for any spill over

100 gallons. As we implement this procedure, we are supporting

a philosophy of “zero tolerance” as an expectation at each of our

operating sites.

As we continue to examine the spills reported under the new

procedure, we aim to identify opportunities for reducing spills and

the associated potential impacts. We want to note that a single

reported release of over 150,000 m3 at our newly acquired Bloom

Lake facility significantly affected the reported volume for 2011.

The analysis of this event is anticipated to result in the identification

of opportunities to improve our performance.

OPERATE » OUR ENVIRONMENT

Spill Volume

(m3)

Number of Spills

2011

161,096

2011

2983,820

2010 2010

94218

2009 2009

6511,339

2008 2008

179

The increase in spill volume was due to a specific event at our Bloom Lake facility as described above. The increase in spill frequency is substantially due to our change in reporting methodology.

GROW

55

Three-Year Environmental Sustainability Strategic Plan

Emerging environmental concerns and the potential of future regulations are driving Cliffs to prepare an organization-wide approach to

address these issues. With this understanding, Cliffs developed an environmental sustainability strategic plan in 2011, which included

the following four priorities:

1 Carbon Emission Leadership in the mining industry

2 Water Use Leadership

3 Biodiversity

4 Environmental Management Systems (EMS) implementation

We are working over the next three years to make significant progress towards addressing these priorities. As we develop the

management approach and strategy, we further recognize the role that Cliffs can take in both improving our operations and leading our

industry in sound environmental management.

Three-Year Plan Activities

Carbon Emission Leadership

Water UseLeadership

Biodiversity

Environmental Management System (EMS)

2012 2013 2014

Develop carbon emission leadership initiatives, i.e. sector-specific carbon intensity targets

Planning and phased implementation of initiatives

Continued implementation and support of initiatives

Baseline water assessmentDevelop water use leadership initiatives, i.e. sector-specific water use intensity targets

Planning and phased implementation of initiatives

Establish biodiversity policy and implementation guide

Inventory listed species at select properties

Develop BMPs and management plans for priority species

Continued EMS implementation and ISO 14001 certification

ISO 14001 certification, enhance EMS and maintain certification

Enhance EMS and maintain certification

56

Objectives

Cliffs’ environmental goals are organization-wide and cover the

following topics:

Meeting and exceeding environmental regulations

Partnering and communicating with stakeholders

Managing climate change risks and opportunities

Integrating sustainable land practices

Reducing our overall environmental footprint

We are continuing to make progress towards advancing these

priority areas. In 2012, we will be focusing on the development

of a Strategic Plan to outline Cliffs’ approach to integrating and

embedding sustainability.

Biodiversity Plan

Our operations have the potential to impact the biodiversity of a region. It is important that we understand the risks and opportunities

associated with our operations. In 2012, we will be developing a Biodiversity Plan that outlines our strategy and approach to monitoring and

managing our impacts where we operate. This is an important step toward proactively identifying our complete footprint, while minimizing the

negative and maximizing the positive influence that our operations may have on the natural environment.

By creating a Biodiversity Plan, Cliffs benefits from both tangible and intangible value creation that helps to prepare us in an uncertain future.

GROW » OUR ENVIRONMENT

TANGIBLE VALUE INTANGIBLE VALUE

For Cliffs •Reduces negative impacts to natural systems

•Reduced risks

•Working relationships with community preserves

for license to operate

•Strengthening reputation

For Others •Species protection

•Data and monitoring of biodiversity

•Biodiversity awareness

Creating Value through Biodiversity Planning

57

Environmental and Safety Table

Indicator 2008 2009 2010 2011

ENERGY USE (million gigajoules)

NATURAL GAS 8.9 12.0 14.8 PETCOKE 1.2 0.5 0.45 GASOLINE 0.08 0.1 0.13 DIESEL FUEL 3.4 5.0 7.0 PROPANE 0.008 0.02 0.004 FUEL OIL #6 0.57 2.7 2.7 FUEL OIL 0.035 0.1 0.26 COAL 17.5 25.2 26.05TOTAL DIRECT 44.69 30.73 42.72 52.01INDIRECT1 18.30 11.90 17.26 19.31

TOTAL 62.99 42.63 59.98 71.32GREENHOUSE GAS EMISSIONS (million metric tons CO2e)2

DIRECT GREENHOUSE AIR EMISSIONS 4.36 3.31 4.47 4.48INDIRECT GREENHOUSE AIR EMISSIONS 3.60 2.23 3.38 3.79TOTAL GREENHOUSE AIR EMISSIONS 7.96 5.54 7.85 8.27WATER USE (million cubic meters)

GROUND WATER 2.73 6.19 2.25 1.82RAIN WATER N/A 3.16 4.23 0.53MUNICIPAL WATER 1.34 1.01 0.88 0.56SURFACE WATER WITHDRAWALS AND PIT/MINE DEWATERING 312 292.4 253.0 272.61

TOTAL WATER USE 316.07 302.76 260.36 275.52AIR EMISSIONS (metric tons)

NOX 21,459 12,843 22,020 22,347SO2 11,484 8,601 10,342 9,593PM3 6,354 7,674 9,932 12,136PM10 6,540 6,419 7,880 9,431PM2.5

4 280 805 1,266 1,206VOC5 437 343 449 317Lead 0.94 0.973 0.991 0.935CO6 1,557 3,745 4,047 3,920Mercury 0.03 0.03 0.03Ammonia N/A 1.38 2.19 2.63

1 Indirect energy consumption from non-renewable source, electricity, except for 2.5 million gigajoules from renewable energy source, hydroelectricity, for Point Noire and Scully sites.

2 Explosives, refrigerants and fugitive releases have not been included in GHG calculations. GHG emissions and energy consumption figures of North American Iron Ore sites are calculated using fuel source invoice data, not production data.

3 Total PM values are not measured at Tilden or Empire mines.

4 2010 PM2.5 number does not include data from Northshore. 2009 number does not include data from Northshore or Hibbing. 2008 PM2.5 number does not include data from UTAC, Point Noire, Tilden or Oak Grove.

5 Excludes Scully data.

6 2008 CO emissions data excludes Point Noire.

58

Indicator 2008 2009 2010 2011

HAZARDOUS WASTE (metric tons)

EXPORTED FOR DISPOSAL 0 0 0 0RECYCLED 26.2 30.50 37.15 12,085INCINERATED OR USED AS FUEL 35.7 10.7 121.5 143.08LANDFILLED 12.8 136.64 6.23 100.28DEEP WELL INJECTION 0 0 0 0OTHER 229.6 6.04 395.06 121.72TOTAL HAZARDOUS WASTE GENERATED7 304.3 183.88 559.92 12,450.08NON-HAZARDOUS WASTE (thousand metric tons)8

COMPOSTED0 0 0 0

REUSED ONSITE 11.4 12.65 19.48 4.56REUSED/RECYCLED OFFSITE 42.53 19.11 36.41 42.53INCINERATED OR USED AS FUEL 0.2 0.48 0.83 1.95LANDFILLED 7.46 3.01 8.47 14.25ONSITE DISPOSAL 34.9 4.8 21.6 6.47ONSITE STORAGE 0 0 0 0DEEP WELL INJECTED 0 0 0 0OTHER - 0.265 0.03 0.270TOTAL NON-HAZARDOUS WASTE GENERATED 84.20 40.05 87.71 70.03WASTE WATER

TREATED PROCESS WASTEWATER DISCHARGED TO SURFACE WATERS (million m3)8 34.5 39.9 190.6 164.4

MINE WATER DISCHARGED TO SURFACE WATERS (million m3)9 80.6 161.2 58.3 68.1NON-CONTACT COOLING WATER DISCHARGED TO SURFACE WATERS (million m3) 176.0 179.2 166.8 169.3

TOTAL WASTE WATER DISCHARGED TO ENVIRONMENT (million m3) 291.1 380.3 415.7 401.8TOTAL SUSPENDED SOLIDS IN PROCESS WASTEWATER DISCHARGED TO SURFACE WATERS (thousands kilograms)9 140.6 156.7 1,132.4 1,636.5TOTAL SUSPENDED SOLIDS IN MINE WATER DISCHARGED TO SURFACE WATERS (thousand kilograms)9 62.9 1,1710.5 549.0 536.1SPILLS

NUMBER OF SPILLS 179 65 94 298SPILL VOLUME (m3) 11,339 218 3,820 161,096SAFETY PERFORMANCE (per 200,000 hours worked)10

TOTAL REPORTABLE INCIDENT RATE 3.70 2.99 2.93 2.7LOST DAYS SEVERITY RATE11 57.80 58.60 51.96 30.44

7 Pinnacle tracks total amounts for hazardous or non-hazardous waste but not disposal method.

8 Under Hazardous Waste, the disposal category “Other” 2008 data includes all hazardous waste generated at the Pointe Noire processing facility (further breakdown was not available). 2009 data for Pointe Noire was appropriately broken down by category.

9 2009 data included Scully treated process water as mine water discharge.

10 Safety data for 2008 and 2009 includes all Cliffs North American operations as well as APIO. APIO safety statistics include employees and contractors; North America safety statistics include employees only.

11 The reference of lost day means any day an employee misses a scheduled shift.

59

 

  Member of Deloitte Touche Tohmatsu Limited 

  

 

 

     INDEPENDENT ACCOUNTANTS’ REVIEW REPORT  Board of Directors and Stockholders Cliffs Natural Resources Inc. Cleveland, Ohio  We have reviewed the following 2011 performance indicators (the “specified performance indicators”) presented within the Sustainability Report of Cliffs Natural Resources Inc. (the “Company”) for the year ended December 31, 2011: 

·  EN3 – Direct energy consumption by primary energy source ·  EN4 – Indirect energy consumption by primary source ·  EN5 – Energy saved due to conservation and efficiency improvements ·  EN8 – Total water withdrawal by source ·  MM1 – Amount of land (owned or leased, and managed for production activities or extractive use) 

disturbed or rehabilitated ·  EN16 – Total direct and indirect greenhouse gas emissions by weight ·  EN20 – NOx, SOx, and other significant air emissions by type and weight ·  EN21 – Total water discharge by quality and destination ·  EN22 – Total weight of waste by type and disposal method ·  EN23 – Total number and volume of significant spills ·  EN28 – Monetary value of significant fines and total number of non-monetary sanctions for non-

compliance with environmental laws and regulations ·  LA7 – Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related 

fatalities by region and gender ·  SO1 – Percentage of operations with implemented local community engagement, impact assessments, 

and development programs. ·  SO3 – Percentage of employees trained in organization’s anti-corruption policies and procedures 

 The Company’s management is responsible for the specified performance indicators.   

We conducted our review in accordance with attestation standards established by the American Institute of Certified Public Accountants.  A review consists principally of applying analytical procedures, considering management assumptions, methods, and findings, and making inquiries and evaluating responses from persons responsible for sustainability and operational matters.  It is substantially less in scope than an examination, the objective of which is the expression of an opinion on the specified performance indicators.  Accordingly, we do not express such an opinion.  A review of the specified performance indicators is not intended to provide assurance on the entity’s compliance with laws or regulations. 

The preparation of the specified performance indicators requires management to interpret the criteria and make estimates and assumptions that affect reported information.  Different entities may make different but acceptable interpretations and determinations. 

Based on our review, nothing came to our attention that caused us to believe that the specified performance indicators referred to above are not presented, in all material respects, in conformity with the GRI G3.1 Guidelines and the GRI Mining and Metals Sector Supplement.  

The comparative specified performance indicators for periods prior to 2011 and all other information presented within the Sustainability Report of the Company for the year ended December 31, 2011 were not reviewed by us and, accordingly, we do not express any assurance on them. 

 

July 10, 2012 

Deloitte & Touche LLP 200 Renaissance Center Suite 3900 Detroit, MI  48243-1895 USA 

Tel:   +1 313 396 0000 Fax:  +1 313 396 3618 www.deloitte.com 

Assurance

60

GRI Statement

61

GRI INDEX

Profile Disclosures

1. STRATEGY AND ANALYSIS PAGE

1.1 CEO Statement 2

1.2 Key impacts, risks, and opportunities. 13-14

2. ORGANIZATIONAL PROFILE PAGE

2.1 Name Cover and 10

2.2 Primary brands, products, and/or services. 10-12

2.3 Operational structure 10-12, 14

2.4 Headquarters 10

2.5 Countries of operations 10-12

2.6 Nature of ownership http://files.shareholder.com/downloads/ABEA-

2.7 Markets served 10-12, 14

2.8 Scale of the organization 10-12, 30 and 10-K

2.9 Significant changes during the reporting period regarding size, structure, or ownership.

10-14

2.10 Awards 15

3. REPORT PARAMETERS PAGE

3.1 Reporting period 4

3.2 Date of most recent previous report (if any). 2010

3.3 Reporting cycle (annual, biennial, etc.) 4

3.4 Contact person 1

3.5 Process for defining report content 1, 3-4, 7

3.6 Boundary of report 4

3.7 Limitations on the scope or boundary of the report

4

3.8 Reporting on joint ventures and subsidiaries 4, 10-14

3.9 Data measurement techniques 4

3.10 Restatements 54-56, 59-60

3.11 Changes in boundary or scope 4, 10-14

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

3.13 External assurance 59

4. GOVERNANCE, COMMITMENTS, AND ENGAGEMENT PAGE

4.1 Governance structure 15-16

4.2 Chair and CEO 15-16

4.3 Board structure 15-16, 23 of 10-K

4.4 Mechanisms for feedback to Board 15-16, 22 of 10-K

4.5 Compensation and performance linkage 15-16, 23 of 10-K

4.6 Avoiding conflict of interest 15-16, 10-K

4.7 Qualifications of the Board 15-16

4.8 Internally developed statements of mission, values and codes of conduct

15-16

4.9 Overseeing sustainability performance 16

4.10 Evaluating governance and performance 15-16

4.11 Precautionary principle Cliffs’ Environmental Policy is consistent with a precautionary approach

4.12 External charters 6, 44, 46, 50-51

4.13 Memberships and associations 6, 14, 38

4.14 Stakeholders 6

4.15 Stakeholder identification 5-6

4.16 Stakeholder engagement 5-6 , 35-39

4.17 Stakeholder topics and responses 5-6, 35-39

Performance Indicators

ECONOMIC INDICATORS PAGE

DISCLOSURE ON MANAGEMENT APPROACH 10-14, 18-20, 24-26, 28 and 97-98 of 10-K

EC1 Direct economic impacts 18, 37 and 98-99 of 10-K

EC3 Coverage of the organization's defined benefit plan obligations.

91-92, 112, 150-153 of 2011 10-K

EC4 Significant financial assistance received from government.

No significant government assistance received

EC6 Policy, practices, and proportion of spending on locally based suppliers at significant locations of operation.

24-25

EC8 Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagement.

8, 35-42

EC9 Understanding and describing significant indirect economic impacts, including the extent of impacts.

18, 24-26, 28

ENVIRONMENTAL INDICATORS PAGE

DISCLOSURE ON MANAGEMENT APPROACH 10-12, 24, 44-56 and 15-20 of 10-K

EN1 Materials used by weight or volume. 52

EN3 Direct energy consumption by primary energy source.

50, 57

EN4Indirect energy consumption by primary source.

50, 57

EN5Energy saved due to conservation and efficiency improvements.

50

EN7 Initiatives to reduce indirect energy consumption and reductions achieved.

50

EN8Total water withdrawal by source. 48, 57

MM1

Amount of land (owned or leased, and managed for production activities or extractive use) disturbed or rehabilitated.

49

EN13 Habitats protected or restored. 49

EN16 Total direct and indirect greenhouse gas emissions by weight.

51, 57

EN17 Other relevant indirect greenhouse gas emissions by weight.

No additional relevant indirect GHG emissions beyond what is reported in this report

EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved.

50-51

EN20NOx, SOx, and other significant air emissions by type and weight.*

51, 57, Calculations vary by location

EN21Total water discharge by quality and destination.

48, 58

EN22Total weight of waste by type and disposal method.

53, 58

EN231 Total number and volume of significant spills.

54, 58

EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation.

8, 12, 44-47, 55-56

EN28

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations.

46

EN30 Total environmental protection expenditures and investments by type.

46

*Disclosures and indicators have been edited, but the content remains aligned with GRI. Download a PDF version of our full content index at http://www.cliffsnaturalresources.com/EN/Sustainability/SustainabilityReporting/

* Calculation varies by location.

62

SO2 Percentage and total number of business units analyzed for risks related to corruption.

100%

SO3Percentage of employees trained in organization's anti-corruption policies and procedures

32

SO4 Actions taken in response to incidents of corruption

No incidents

SO5 Public policy positions and participation in public policy development and lobbying

17, 20

SO6 Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country

17

SO7 Anti-competitive behavior None

PRODUCT RESPONSIBILITY INDICATORS PAGE

DISCLOSURE ON MANAGEMENT APPROACH 26, http://www.cliffsnaturalresources.com/EN/aboutus/Pages/default.aspx

MM11 Programs and progress relating to materials stewardship.

52

PR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction.

26

LABOR INDICATORS PAGE

DISCLOSURE ON MANAGEMENT APPROACH 23, 30-34 and 20-22 of 10-K

LA1 Employees by type 30, 20 of 2011 10-K

LA21 Employee turnover 30

LA3 Benefits 31

LA4 Percentage of employees covered by collective bargaining agreements.

20-21 of 2011 10-K

LA6 Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs.

23

LA71

Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities, by region and by gender.

23

LA9 Health and safety topics covered in formal agreements with trade unions.

Personal protective equipment, safety committees, incident investigations, inspections, training, medical records, representation, medical examinations and surveillance, ergonimics

LA12 Percentage of employees receiving regular performance and career development reviews.

32

LA14 Ratio of basic salary of men to women by employee category.

34

HUMAN RIGHTS INDICATORS PAGE

DISCLOSURE ON MANAGEMENT APPROACH 20, 30, 34-35, 39, 62 and 20-22 of 10-K

HR5 Freedom of Association No risks identified

HR6 Child Labor No significant risks at our operations

HR7 Forced or compulsory labor No significant risks at our operations

HR9 Rights of indigenous peoples 41

SOCIETAL INDICATORS PAGE

DISCLOSURE ON MANAGEMENT APPROACH 16-17, 20, 32, 35-42

SO1

Percentage of operations with implemented local community engagement, impact assessments, and development programs

3-7, 37-42, 44-46 5-8, 36-39 – 100% of our operations have implemented local community engagement programs. These programs include, but are not limited to, local community development programs, environmental monitoring programs and stakeholder engagement.

MM8 Number (and percentage) or company operating sites where artisanal and small-scale mining (ASM) takes place on, or adjacent to, the site; the associated risks and the actions taken to manage and mitigate these risks.

Did not occur

MM10 Number and percentage of operations with closure plans.

148-150 of 2011 10-K

1 Partial reporting

✔

FORWARD LOOKING STATEMENT

This report contains statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform

Act of 1995. These forward-looking statements may be identified by the use of predictive, future-tense or forward-looking terminology, such

as “believes,” “anticipates,” “expects,” “estimates,” “intends,” “may,” “will” or similar terms. These statements speak only as of the date of

this report, and we undertake no ongoing obligation, other than that imposed by law, to update these statements. These statements appear

in a number of places in this report and relate to, among other things, our intent, belief or current expectations of our directors or our officers

with respect to: our future financial condition, results of operations or prospects, estimates of our economic iron ore and coal reserves; our

business and growth strategies; and our financing plans and forecasts. You are cautioned that any such forward-looking statements are

not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those

contained in or implied by the forward-looking statements.

This Report is printed on Mohawk Options PC 100 White 100lb double thick cover and

80lb text which contains 100% post-consumer waste fiber. This paper is certified by

SmartWood in accordance with FSC standards, and manufactured with windpower.

Report is printed with Superior Super Tech 520 ink, 30% vegetable base.

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2011 SUSTAINABILITY REPORT