Cleveland-Cliffs Updates 2008 Iron Ore Revenue-Per-Ton Guidance; Provides Commentary on 2009 North American Iron Ore Pricing

Cleveland-Cliffs Updates 2008 Iron Ore Revenue-Per-Ton Guidance; Provides Commentary on 2009 North American Iron Ore Pricing

As a result of the recently announced iron ore settlements between major Asia-Pacific iron ore producers and consumers, as well as the rising price of hot band steel, Cleveland-Cliffs Inc (NYSE: CLF) today updated its 2008 iron ore revenue and cost-per-ton guidance. In addition, the Company provided commentary on expected pricing for its North American Iron Ore segment for 2009.

Asia-Pacific Iron Ore 2008 Outlook

With the recent iron ore pricing settlements in Australia of an 80% increase for fines and a 97% increase for lump, Cliffs said its Asia-Pacific Iron Ore segment is expected to achieve average revenue per tonne of approximately $102 in 2008 based on its anticipated product mix. This is an 87% increase from the previous year, and up from previous guidance of $89 per tonne.

Cliffs expects costs per tonne in Asia-Pacific Iron Ore of approximately $55. The increase from the Company’s previous expectation of $53 per tonne is primarily the result of higher expected royalty payments related to higher than expected year-over-year price increases, along with increased energy costs. Production volume is expected to be 7.8 million tonnes, with expected sales volume of 8.0 million tonnes.

North American Iron Ore 2008 Outlook

In estimating Cliffs’ revenue-per-ton guidance in its North American Iron Ore segment, the Company updated its steel pricing assumptions, which is one of many adjustment factors used to determine prices in its North American Iron Ore supply agreements.

Cliffs said it now expects an approximate 34% increase in adjustment factors related to steel pricing, using an annual average hot band steel price of $750 per ton at certain customer’s steelmaking facilities. This is an increase from the Company’s previous assumptions of 25% and $700 per ton, respectively.

This new expectation, combined with the other factors used in determining pricing for its North American Iron Ore supply agreements, results in estimated revenue per ton of $85 for 2008, compared with previous guidance of $81 per ton. The Company said each $10 change from $750 per ton in the average hot rolled steel price at certain steelmaking facilities will result in a change in average realization of $0.24 per ton.

Cliffs expects 2008 North American Iron Ore costs per ton to increase approximately 16% compared with 2007 to approximately $56 per ton. The increase from the Company’s previous expectation of $53 per ton is primarily the result of rising energy costs and higher than previously projected royalty payments.

In 2008, Cliffs expects to have equity production of approximately 23 million tons and sales volume of 24 million tons as it sells through some inventory.

North American Iron Ore 2009 Pricing

In addition to providing an update to its 2008 outlook, Cliffs provided commentary on its 2009 pricing expectations for its North American Iron Ore segment, which sells virtually all of its production under long-term supply agreements. Cliffs indicated that, assuming no change in World Pellet Prices in 2009 and no changes in producer price indices or steel pricing (all adjustment factors that determine its pricing in North American Iron Ore), average realized 2009 price per ton would be approximately $107. This 26% increase compared with the expected 2008 average price realization is based on contractual base-price adjustments, lag-year adjustments and price caps contained in the Company’s current supply agreements.

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Cleveland-Cliffs Inc, headquartered in Cleveland, Ohio, is an international mining company, the largest producer of iron ore pellets in North America and a major supplier of metallurgical coal to the global steelmaking industry. The Company operates six iron ore mines in Michigan, Minnesota and Eastern Canada, and three coking coal mines in West Virginia and Alabama. Cliffs also owns 85% of Portman Limited, a large iron ore mining company in Australia, serving the Asian iron ore markets with direct-shipping fines and lump ore. In addition, the Company has a 30% interest in the Amapá Project, a Brazilian iron ore project, and a 45% economic interest in the Sonoma Project, an Australian coking and thermal coal project.

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Cleveland-Cliffs Inc Steve Baisden, 216-694-5280 Director, Investor Relations and Corporate Communications

Source: Cleveland-Cliffs Inc

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