HIGH-GRADE NI-CU-PT-PD-ZN-CR-AU-V-TI DISCOVERIES IN THE "RING OF FIRE"

NI 43-101 Update (September 2012): 11.1 Mt @ 1.68% Ni, 0.87% Cu, 0.89 gpt Pt and 3.09 gpt Pd and 0.18 gpt Au (Proven & Probable Reserves) / 8.9 Mt @ 1.10% Ni, 1.14% Cu, 1.16 gpt Pt and 3.49 gpt Pd and 0.30 gpt Au (Inferred Resource)

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Message: Re: Chromite irellivent
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Apr 20, 2011 08:33AM

Cliffs is not a steel producer.

"As a supplier of high-quality blast furnace feed pellets, Cliffs conducts business with virtually all of the integrated steel producers in North America. More than 98% of Cliffs’ North American revenues are derived from sales of iron ore pellets to these producers. Generally, we have multi-year supply agreements with customers. Each of these term sales agreements utilizes a base price that is adjusted annually using one or more adjustment factors, including general industrial inflation indices, steel prices, and internationally negotiated pellet prices.

International iron ore prices are reset annually based on negotiations between the largest consumers and producers. Separate negotiations take place for lump and fines pricing, as well as for pellet pricing. Cliffs does not play a role in any of these negotiations; it does, however, employ the agreed-upon benchmark settlements for lump and fines ore produced by its Asia-Pacific business unit. We have long-term supply agreements with steel producers in China and Japan that account for approximately 72% and 27% of sales, respectively. A very small amount of Cliffs’ Koolyanobbing iron ore is consumed domestically.

Cliffs also utilizes the Eastern Canadian pellet-price settlement as one of the adjustment factors used to determine term contract prices for its North American pellet business.

One hundred percent of our production capacity is essentially committed under long-term supply agreements.

Two recent acquisitions further broaden our international exposure. The Sonoma seaborne coking and thermal coal operation expands our presence in the Australian mining sector, while production of iron ore concentrate from our Amapá joint venture is fully committed to a Bahrainian producer of direct-reduction-grade iron oxide pellets. "

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