CLIFFS DEC 2010 Investor Slide Deck

OPERATIONAL EXCELLENCE | A WORLD LEADER | STEWARDSHIP

Cliffs Natural Resources IncCliffs Natural Resources Inc.

December 2010


“S f H b ” St t t d th P i t S iti“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995

This presentation includes predictive information that is intended to be made as“forward-looking” within the safe harbor protections of the Private Securities LitigationReform Act of 1995. Although the Company believes that its forward-looking informationis based on reasonable assumptions, such information is subject to risks anduncertainties, which could cause materially different results. Important factors that couldcause actual results to differ materially from those in the forward-looking information areset forth in the Company’s most recent Annual Report and reports on Form 10-K andset forth in the Company s most recent Annual Report and reports on Form 10-K and10-Q, and news releases filed with the Securities and Exchange Commission. All reportsand news releases are available on Cliffs’ website www.cliffsnaturalresources.com.

1


Overview of Cliffs Natural Resources IncOverview of Cliffs Natural Resources Inc.

Cliffs Natural Resources (NYSE: CLF) (Paris: CLF) is an international mining and natural resources company A member of the S&P 500 it is the largest producer ofnatural resources company. A member of the S&P 500, it is the largest producer of iron ore pellets in North America, a major supplier of direct-shipping lump and fines iron ore out of Australia and a significant producer of metallurgical coal

Cliffs is executing a strategy designed to increase scale and diversity and focusedCliffs is executing a strategy designed to increase scale and diversity and focused on serving the world’s largest and fastest growing steel markets

The Company boasts a conservatively managed balance sheet with low debt and strong liquidityg q y

With core values of environmental and capital stewardship, our colleagues across the globe endeavor to provide all stakeholders operating and financial transparency as embodied in the Global Reporting Initiative (GRI) framework

2


Cliffs Natural Resources Global FootprintCliffs Natural Resources Global Footprint

Access to high-growth Asian markets

Pricing correlates to Australian benchmark for lump and fines

Largest iron ore producer in North America

Significant position in North American metallurgical coal

A developing project in a low-cost mining district

3


Cliffs’ Strategic ImperativesCliffs Strategic Imperatives

Building scale through diversification Global execution

S l Gl b l

Multiple Revenue Streams

Product Diversification

Geographic Presence

Competencies of the Firm

Outlook of Personnel

Global Scalability

Scale Through

Diversification

GlobalExecution

Operational ShareholderOperationalExcellence

Operational excellenceSafety

Shareholder returnsShareholder Value

Shareholder Returns

Technical Competencies

Operating Efficiencies

Risk Management

“Earning the Right to Grow”

4


Impact of Strategic Execution($ in Millions)

$150

($ in Millions)

tion

Share price performance since January 2004

North American Coal

10%

Other4% North American

Iron Ore62%

$120

ines

s ev

olut Asia Pacific

Iron Ore24%

$60

$90

esB

usi

2005

Sales: $1,2032005

Sales: $1,7402006

Sales: $1,9222007

Sales: $2,2752008

Sales: $3,6092009

Sales: $2,342

2007 2008 2009

2004

2010E

2010ESales: $4.4B

$30

$60

gic

mile

ston

e

Acquired 80% of Portman Limited, then the third largest iron ore mining company in Australia

Acquired 30% interest in Amapá iron ore project in Brazil

Acquired 45% economic interest in Sonoma, hard coking and thermal coal mine in Queensland,

Acquired remaining stake in Portman Limited (20%)

Acquired remaining stake in United Taconite (30%)

A i d t k i G ld

$347mm in net proceeds from equity offering executed in May

Added to S&P 500 Index

Acquired remaining stake (73%) in Wabush Mines

Acquired Freewest Resources and Spider Resources, world-class chromite assets in

$0Jan 2004 Sep 2004 May 2005 Jan 2006 Sep 2006 May 2007 Jan 2008 Sep 2008 May 2009 Feb 2010

Stra

teg mine in Queensland,

Australia

Acquired PinnOak, Central Appalachian high-quality, low-volatile met coal mines

Acquired stake in Golden West, an Australian iron ore junior mining company

chromite assets in Ontario, Canada

Acquired INR Energy, high-volatile met coal and thermal coal

5


Financial OverviewTrack record of growth ($mm) Strong balance sheet

Financial Overview

Revenue EBITDA

Credit and liquidity metrics 2008 2009

1

y

Total debt / EBITDA 0.6x 1.0x

Net debt / EBITDA 0.4x 0.0x

Debt / Total capitalization 23.0% 17.1%

Total debt ($mm) 525 525

Diverse end-market exposure (2004 – 2009)

Cash balance ($mm) 179 503

Availability under credit facility ($mm) 587 569

Japan 7%

United States45%

d

Other 8%

2004 2009

Canada19%

China 5% Other 1%

Revenue by end-market

China30%

Canada10%

United States76%

19%

6


2010 Financial Highlights2010 Financial Highlights

Record-breaking nine months ended results:

- Revenues of $3 3 billion up 114%- Revenues of $3.3 billion, up 114%

- Net income of $627 million, up 547%

- Free cash flow of $481 million, up 575%

Over $1 billion in acquisitions:

- Wabush remaining stake $88 million

- Freewest acquisition $186 million

- INR Energy’s coal operations $757 million

North American Iron Ore shipments total 18.6 million tons, up 88%

North American Coal revenues of $323 million, up 158%

Asia Pacific Iron Ore sales margin of $383 million, up 468%

Strengthened balance sheet by raising $1.4 billion in public debt

The Company achieved investment grade rating from Standard and Poor and Moody’s

7


Business Segment Overview

North AmericanIron Ore

62%Asia Pacific

North AmericanCoal9%

Other 6%

2009 Revenue

North American Iron OreManage and operate six North

North American Coal

Own and operate five

Asia Pacific Iron Ore

Operations include 100%-owned

62%Iron Ore23%

American mines located in Michigan, Minnesota, and Eastern Canada

Annual equity production capacity of 29.5mm tons of iron

Own and operate five metallurgical coal mines and one thermal coal mine in West Virginia and Alabama

2011 production capacity in excess of 7mm tons

Operations include 100% owned Koolyanobbing complex and 50% equity interest in Cockatoo Island

9mm tonnes of current capacity, with upgrade underway to reach 11mm tonnes by 2012ore pellets

Over 90% of 2010 volume committed under contract

excess of 7mm tons

A significant portion of revenue comprised of exports

tonnes by 2012

Direct-shipping lumps and fines ore sold on the seaborne market

($mm) 2007 2008 2009 ($mm) 20071 2008 2009 ($mm) 2007 2008 2009

Revenue $1,745 $2,370 $1,448

Sales margin 398 804 276

Tons shipped 22.3 22.7 16.4

Revenue $85 $346 $207

Sales margin (32) (46) (72)

Tons shipped 1.2 3.2 1.9

Revenue $445 $770 $542

Sales margin 96 349 87

Tonnes shipped 8.1 7.8 8.5

1 Partial year

8


M&A and Development StrategyM&A and Development Strategy

Diversify business into other end-markets Cliffs’ strategy: geographic and mineral Diversify business into other end markets and other steel-related minerals

Expand geographically into low-political-risk geographies

gy g g pdiversification

Minerals Geographies

g g p

Objective is to strike a balance among cash-flow positive, profitable, commercial-stage businesses and targets in the early

NORTH ASIA PACIFIC SOUTH AMERICA

NORTH AMERICAN SEABORNE IRON ORE

SEABORNE MET COAL

stage of developmentNORTH

AMERICA (AUSTRALIA) AMERICA(BRAZIL)

AMERICAN MET COAL

SEABORNEIRON ORE

IRON ORE

SEABORNEFERROALLOYS

9


INR Energy's Coal Operations AcquisitionINR Energy s Coal Operations AcquisitionDemonstrates Cliffs’ commitment to further diversify its business into coal

$757 million acquisition funded through available liquidity, including cash on hand and Cliffs’ $600 $ 5 o acqu s t o u ded t oug a a ab e qu d ty, c ud g cas o a d a d C s $600million credit facility

Transaction will increase Cliffs’ total global coal equity production capacity to nearly 11 million tons by 2012, from today’s current annualized equity production of approximately 7 million tons

Si ifi t t ll i l lSignificant metallurgical coal reserves

Expands global reserve base to over 232 million tons

Southern West Virginia multi-mine complex with features that are complementary to our North American Coal operationsAmerican Coal operations

Two underground continuous mining operations and one open surface mine

Assets include several metallurgical coal development mines

Increases Cliffs’ products portfolio through the addition of high-volatile metallurgical coal andIncreases Cliffs products portfolio through the addition of high volatile metallurgical coal and thermal coal

10


INR Energy's Coal OperationsINR Energy s Coal Operations

Southern West Virginia Mining ComplexSouthern West Virginia Mining Complex

Metallurgical Coal Operations

Thermal Coal/PCI Operations

• Two operating underground • One operating surfaceTwo operating underground mines:1. Powellton2. Chilton-Dingess

One operating surface mine:1. Toney Fork #2

Developmental Projects

• Two additional underground metallurgical coal mines inmetallurgical coal mines in active development

• Several additional metallurgical coal mines in permitting phase

Operations located in near proximity to Cliffs

Pinnacle Mine

11

Pinnacle Mine


Ring of Fire – Chromite ProjectFreewest Resources and Spider Resources Acquisitions position Cliffs to become the leading North American primary chromite and ferrochrome producer and exporter

Ring of Fire Chromite Project

Customers would include global stainless steel producers

World-class chromite deposits within the “Ring of Fire” in Northern Ontario, Canada– 100% Black Thor– 100% Black Label– 73.5% Big Daddy

Anticipate mining 1 million to 2 million tonnes of high-grade chromite ore to produce 400 000 to 800 000 tonnes of ferrochrome annually with a >30-year mine life400,000 to 800,000 tonnes of ferrochrome annually with a >30-year mine life

Prefeasibility studies and initial First Nation discussions are underway; production anticipated to commence around 2015

Financed with stock and cashFinanced with stock and cash

12


Ring of Fire – Chromite Project Capex Requirements

Estimated capex of $800mm required to develop the site

Ring of Fire – Chromite Project Capex Requirements

Options for financing capex include:– Internal cash flow– Joint-venture partner

Oth fi i l ti– Other financial options

Capex will be deployed only after certain project milestones are satisfactorily achieved

Cliffs has the opportunity to evaluate proceeding with the development of the assets over the next 5 years– Majority of capex spending would occur in 2013 and 2014

13


Ring of Fire – Chromite Project g jWorld-Class Assets

CHROMITEDEPOSITS BLACK THOR

BLACK LABEL

DEPOSITS

BIG DADDY

14


Industry Overview

15


Steel Is a Large Growing Global Business

1,200

Steel Is a Large, Growing, Global BusinessIn 2009, China’s steel consumption was nine times that of the U.S.

S. Korea

800

1,000

onsu

mpt

ion

As countries industrialize, per capita steel consumption increases as GDP per capita expands through h i

JapanChina

Oceania400

600

Kg/

Cap

ita S

teel

Co the maturing process

U.S.Canada

MexicoBrazil

EU 27CISIndia

0

200

2009

0 10 20 30 40 50 602009 GDP Per Capita ($US 000s)

BRIC economic growth is substantial and appears inevitable.

Note: Size of bubbles represents size of absolute 2008 finished steel consumption in each respective countrySource: Metals Strategies, CIA World Factbook

16


The Long Term Outlook Remains StrongThe Long-Term Outlook Remains StrongWorld steel demandWorld steel demand(millions of tonnes)

500

1,000

1,500

Source: Metal Strategies

0

500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E 2010E 2011E 2012E 2013E 2014E 2015E

% of crude steel production

Growth in global steel production using blast furnacesGrowth in global steel production using blast furnaces(millions of tonnes)

75%

100%

1,200

1,400

0%

25%

50%

75%

400

600

800

1,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E 2010E 2011E 2012E 2013E 2014E 2015E

17



North American Steel Producers Are Particularly W ll P iti d t P ti i t i E i R

U.S. steel supply/demand (mm tons)U.S. steel supply/demand (mm tons)Well-Positioned to Participate in an Economic Recovery

Production Consumption

110105 108 108

101 98107 111 114 116

133

119

135

122

110101

113118

123127

66

9298

65

89

Net imports as a % of

consumption17% 12% 19% 11% 9% 10% 9% 10% 10% 11% 11% 11%

2004 2005 2006 2007 2008 2009 2010E 2011E 2012E 2013E 2014E 2015E


18


Steel Center Inventories Remain Low Relative to Hi t i l L l

Months supplyTons (mm)

Service center inventoriesService center inventories

Historical Levels

Months supplyTons (mm)

5

14

16

18

3

4

10

12

24

6

8

10

2

2005 2006 2007 2008 2009 2010


19


Steelmaking Raw Materials Supply-Side ConsiderationsIron ore– New projects commissioned in countries with medium to high sovereign risk

Hi h d f t i i i ifi t it l d l t

Steelmaking Raw Materials Supply-Side Considerations

– High-end of cost curve requiring significant capital deployment– Suppliers farther inland from deep-water ports, economic logistics– Further tightening of Indian supply as increased export regulatory pressure

has emerged

Metallurgical coal– At top of cycle in 2008, Appalachian supplies declined

(mines deeper, seams thinner)– Environmental and safety regulations make permitting more difficult to secure– Other global metallurgical coal basins in challenging political geographies

(Mongolia, Mozambique, etc.)

20


Pricing for Core Products Has Corrected Sharplyg p yIron ore prices ($/metric ton based on 64% iron content)

150175 Pellets Lumps Fines $149

75%

$153109%

($ price and % change)

0255075

100125150

$73(48%)$62

(33%)

$85(44%)

75%

$129108%

Metallurgical coal prices ($/metric ton)

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

E

Source: Cliffs and various industry publications/reports

($ i d % h )

50100150200250300

$209 *62%

$129

($ price and % change)

050

199

0

199

1

199

2

199

3

199

4

199

5

199

6

199

7

199

8

199

9

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

20

10

E

$129(57%)

* Latest quarterly Settlement

21

Source: Metal Strategies, equity research, Company estimates


Business Unit OverviewBusiness Unit Overview

22


North American Leader in Iron OreFirmly established as a critical supplier to the leading U.S.-based integrated steelmakersVirtually 100% of sales volume is committed under long-term supply agreements

North American Leader in Iron Ore

($mm) 2006 2007 2008 2009

Revenue $1 561 $1 745 $2 370 $1 448

Financial overview

supply agreementsFormula-based supply agreements capture steel prices, iron ore prices and wholesale inflation while mitigating volatilityCost effectively increased production base during most recent cycleOver 900 million tons of proven and probable reserves

Revenue $1,561 $1,745 $2,370 $1,448

Sales margin 327 398 804 276

Capex 81 64 53 43

DD&A 33 41 66 74

% capacity

A l Mi l

Equity production (MM gross tons) North America pellet production

Cliffs Managed45%

Iron Ore Co. of Canada

16%

Arcelor Mittal14%

U.S. Steel25%

16%

23

Source: Company data


The North American Market Is Geographically ProtectedThe North American Market Is Geographically ProtectedArcelorMittal Mines

24



North American Iron Ore Pellet Contract PricingVirtually all pellet capacity under long-term contracts

Annual price adjustments are based on a variety of factors including:

North American Iron Ore Pellet Contract Pricing

— Seaborne pellet prices

— Various PPI indices

— Hot-band steel pricesp

— Contractual-based price increases, lag-year adjustments and capped pricing

A 48% decrease in pricing in 2009 resulted in average prices for Cliffs decreasing only 11%

2010 guidance: 27 million tons of sales volume $98 - $103 per ton2010 guidance: 27 million tons of sales volume, $98 $103 per ton

— Assumes 96% increase in seaborne pellet prices, $600 - $650 hot band steel

25


North American CoalOverview

Cliffs will produce primarily high-volatile and low-volatile

North American Coal

($mm) 20071 2008 2009

Financial overview

Cliffs will produce primarily high volatile and low volatile metallurgical coal, with some thermal coal production

Reserve base of 225 million tons contains some of the highest quality metallurgical coal in the world

NAC capacity will be over 9 million tons in 2012

C l i ld i b th d ti d t k t

( )

Revenue $85 $346 $207

Sales margin (32) (46) (72)

Capex 11 97 21

Reserves by Mining ComplexCliffs North American Coal Production (millions of tons)

Coal is sold in both domestic and export markets

k

Geographic overview

DD&A 18 52 38

1 Partial year

Pi l10 Oak Grove19%

Pinnacle28%

4+

7+

4

6

8

10

INR Met30%

Oak Grove Mine

Pinnacle ComplexPinnacle MineGreen Ridge Mine

INR Mines:Powellton MineChilton-Dingess MineToney Fork #2 Mine

225 mm tons

INR Thermal23%

1.74

0

2

2009 2010E 2011E


26


Asia Pacific Iron OreBusiness overview

Asia Pacific iron ore operations located in Western Australia:

Financial overview

Asia Pacific Iron Ore

($mm) 2006 2007 2008 2009– Koolyanobbing mine (100% owned)

– Cockatoo Island Joint Venture (50% owned)

Serves the Asian iron ore markets with direct-shipping fines and lump ore, with 2012 capacity to reach 11mtpy

88mm tonnes of proven and probable reserves

($ )

Revenue $361 $445 $770 $542

Sales margin 87 96 349 87

Capex 32 39 68 96 88mm tonnes of proven and probable reserves

Near mine drilling program targeting substantial reserve additions

Customer overview (2009)

Cockatoo Island

Geographic overview Production (millions of tonnes)

DD&A 41 49 74 111

Cockatoo Island

Japan15%

China85%

Koolyanobbing

Complex

27



Sonoma CoalBusiness overview

45% economic interest, shipments commenced in 2008

Geographic overview

Sonoma Coal

2009 equity sales volume: 1.4mm tonnes

21.6 million tonnes of reserves

Mix of metallurgical and thermal coal

Supply agreements in place with JFE China Steel

Sonoma

Supply agreements in place with JFE, China Steel (metallurgical) and a Korean utility (thermal)

Moves by rail to the Abbot Point Bulk Coal Terminal for export

$142 million investment has returned a total sales margin gof $82 million since operations commenced two years ago

28



Amapá ProjectBusiness overview

30% owned by Cliffs, 70% owned by Anglo American

Geographic overview

Amapá Project

Consists of a significant iron ore deposit, a 192-kilometer railway connecting mine to port, and 71 hectares of real estate for a loading terminal

Majority of production committed under long-term supply agreement with operator of an iron oxide

Amapá Project

supply agreement with operator of an iron oxide pelletizing plant in Bahrain

$62 million equity loss in 2009 and expectations of profitability in 2010


29


In SummarySteel and the raw materials to make it are extremely important

— Building block of society

— Essential to modernization of Brazil, Russia, India and China

Raw materials will continue to be scarce in the long-termg

— Very few meaningful iron ore or metallurgical coal projects came online at the top of the last cycle

— Worldwide economic recovery is resulting in increased demand

Cliffs is well positioned in its current markets and to benefit from the current environment

— Active business development targeting program

— Strong balance sheet and significant financial flexibility

30


Cliffs Natural Resources IncCliffs Natural Resources Inc.


Appendix – 2010 Outlook SummaryAppendix 2010 Outlook Summary


2010 Outlook Summary2010 Outlook Summary

North American North American Asia PacificIron Ore (1) Coal (2) Iron Ore

Current Previous Current Previous Current PreviousOutlook Outlook Outlook Outlook Outlook Outlook

Sales volume (million tons/tonnes) 27.0 27.0 3.6 3.9 9.0 8.8

Revenue per ton/tonne $98 - $103 $107 - $112 $115 - $120 $115 - $120 $115 - $120 $110 - $115

Cost per ton/tonne $65 - $70 $65 - $70 $120 - $125 $115 - $120 $55 - $60 $55 - $60

Sonoma Coal- Equity sales and production of 1.5 million tonnes

SG&A Expenses and Other Expectations- SG&A expenses of approximately $200 million

(1) Assumes a range of hot band steel pricing of $600 - $650 per ton.(2) North American Coal outlook includes the impact from INR Energy's coal operations.

- 60%/40% thermal-met mix- Average revenue per tonne of $120 - $125- Average cost per tonne of $80 - $85

Amapá Iron Ore Project- Profitable in 2010 for Cliffs’ equity interest

- Global Exploration costs of $30 million to $35 million- Chromite project costs of approximately $15 million- Full year tax rate approximately 30%- Depreciation and amortization approximately $325 million

Cash from operationsMore than $1 3 billion- More than $1.3 billion

Capital expenditures- Approximately $275 million

33

Investor Relations

CLIFFS DEC 2010 Investor Slide Deck