Cliffs 2014 January 2014 - Investor Presentation

1. Cliffs Natural Resources Inc.
January 2014

2. FORWARD-LOOKING STATEMENTS
This presentation contains forward-looking statements within the meaning of the federal securities laws. Although the Company believes
that its forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties relating to
Cliffs' operations and business environment that are difficult to predict and may be beyond Cliffs' control. Such uncertainties and factors
may cause actual results to differ materially from those expressed or implied by forward-looking statements for a variety of reasons
including without limitation: uncertainty or weaknesses in global economic conditions, including downward pressure on prices, reduced
market demand and any slowing of the economic growth rate in China; trends affecting our financial condition, results of operations or
future prospects, particularly the continued volatility of iron ore and coal prices; our ability to successfully integrate acquired companies into
our operations and achieve post-acquisition synergies, including without limitation, Cliffs Quebec Iron Mining Limited (formerly
Consolidated Thompson Iron Mining Limited); our ability to successfully identify and consummate any strategic investments and complete
planned divestitures; the outcome of any contractual disputes with our customers, joint venture partners or significant energ y, material or
service providers or any other litigation or arbitration; the ability of our customers and joint venture partners to meet the ir obligations to us
on a timely basis or at all; our ability to reach agreement with our iron ore customers regarding modifications to sales contract pricing
escalation provisions to reflect a shorter-term or spot-based pricing mechanism; the impact of price-adjustment factors on our sales
contracts; changes in sales volume or mix; our actual economic iron ore and coal reserves or reductions in current mineral estimates,
including whether any mineralized material qualifies as a reserve; the impact of our customers using other methods to produce steel or
reducing their steel production; events or circumstances that could impair or adversely impact the viability of a mine and the carrying value
of associated assets; the results of prefeasibility and feasibility studies in relation to projects; impacts of existing and increasing
governmental regulation and related costs and liabilities, including failure to receive or maintain required operating and en vironmental
permits, approvals, modifications or other authorization of, or from, any governmental or regulatory entity and costs related to implementing
improvements to ensure compliance with regulatory changes; our ability to cost-effectively achieve planned production rates or levels;
uncertainties associated with natural disasters, weather conditions, unanticipated geological conditions, supply or price of energy,
equipment failures and other unexpected events; adverse changes in currency values, currency exchange rates, interest rates a nd tax
laws; availability of capital and our ability to maintain adequate liquidity and successfully implement our financing plans; our ability to
maintain appropriate relations with unions and employees and enter into or renew collective bargaining agreements on satisfac tory terms;
risks related to international operations; availability of capital equipment and component parts; the potential existence of significant
deficiencies or material weakness in our internal controls over financial reporting; problems or uncertainties with productivity, tons mined,
transportation, mine-closure obligations, environmental liabilities, employee-benefit costs and other risks of the mining industry; and other
factors and risks that are set forth in the Company's most recently filed reports with the Securities and Exchange Commission . The
information contained herein speaks as of the date of this release and may be superseded by subsequent events. Except as may be
required by applicable securities laws, we do not undertake any obligation to revise or update any forward-looking statements contained in
this presentation.
1

3. CLIFFS NATURAL RESOURCES - A LEADING, GLOBAL IRON ORE MINER
REVENUE BY PRODUCT
Coal
13%
Cliffs Natural Resources (NYSE: CLF) (Paris: CLF) is an
international mining and natural resources company. A member
of the S&P 500 Index, the Company is a major global iron ore
producer and a significant producer of metallurgical coal
Other
6%
Iron
ore
81%
GLOBAL MARKET EXPOSURE
(2012 REVENUE OF $5.9 BILLION)
Other
18%
U.S.
36%
Canada
12%
Cliffs is executing a strategy designed to increase scale and
diversity and focused on serving the world’s largest and fastest
growing steel markets
China
34%
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
Source: Company filings and presentations.
2

4. CLIFFS’ STRATEGIC IMPERATIVES
Building scale through diversification
Global execution
• Multiple Revenue Streams
• Product Diversification
• Geographic Presence
• Competencies of the Firm
• Outlook of Personnel
• Global Scalability
Operational excellence
Shareholder returns
• Safety
• Technical Competencies
• Operating Efficiencies
• Shareholder Value
• Risk Management
• “Earning the Right to Grow”
3

5. GLOBAL FOOTPRINT - FOCUSED ON SCALE, DIVERSITY AND GROWTH
7
mt2
14mt3
25mt4
6mt1
9mt
PRODUCT KEY
Iron Ore
Coal
11mt
Chromite
END MARKET KEY
North America
Asia Pacific
Europe
Note: The volumes listed above represent Cliffs’ production capacity as reported in the Company’s 2012 Form 10-K. 1 Wabush current annual capacity.
Phase I and Phase II capacity. 4 Based on Cliffs’ equity share of annual rated production capacity, converted to million metric tons.
4
2
100% of Bloom Lake Phase I capacity.
3
100% of Bloom Lake

6. U.S. IRON ORE
U.S. IRON ORE
PROVEN & PROBABLE MINERAL RESERVES
(IN LONG TONS)
Empire
6mt
United
Taconite
126mt
Tilden
247mt
823
Million
Tons
Northshore
361mt
Hibbing
83mt
• Pioneers in developing the beneficiation and pelletizing
process
CLIFFS’ USIO SHIPMENTS
(MILLION METRIC TONS1)
23
25
22
21
22 - 23
• Largest merchant supplier of iron ore pellets to U.S.based steel mills
• Significant portion of U.S. Iron Ore volume contracted
for the next decade
14
2009
2010
2011
2012
2013E
2014E
• Cliffs’ U.S. mines are well capitalized, well maintained
and run by world-class operators
CLIFFS EXPECTS TO SUSTAIN ITS LONG-TERM VOLUMES IN U.S IRON ORE
Source: Company filings
5
1
Converted from long tons.

7. EASTERN CANADIAN IRON ORE
BLOOM LAKE
WABUSH
BLOOM LAKE CAPITAL EXPENDITURES
($ MILLIONS)
Phase II expansion
2011 &
2012
•
Successfully idled the pelletizer in the second
quarter 2013
•
Number of processing lines in the concentrator
expected to be reduced
•
If $100 cash costs at Wabush are not achieved
by year-end, a more permanent solution will be
considered
•
Currently selling Wabush's iron ore concentrate
product on a short-term spot basis
$739
Phase II
expansion1
Remaining
$900
CASH COSTS
($ PER METRIC TON)
$90-$95
$70-$75
Mid-$60s
2013
Outlook
Targeted
Phase I
cash costs
Source: Management estimates, company filings and earnings releases
6
Long-term
1
Excludes sustaining capital

8. ASIA PACIFIC IRON ORE
SALES VOLUME1
PROVEN & PROBABLE RESERVES
(MILLIONS OF METRIC TONS)
(MILLIONS OF METRIC TONS)
12
96
89
88
93
88
89
77
4
2005
2012
• Tripled sales volume through expansion
projects and acquisitions
• 2012 execution of a large-scale expansion
project completed on time and on budget
1
2005 sales reflect Cliffs’ 80% ownership of Portman Limited
7
2006
2007
2008
2009
2010
2011
2012
• Maintained reserve base despite significant
sales volume growth

9. NORTH AMERICAN COAL
NORTH AMERICAN COAL SALES VOLUME
(MM SHORT TONS)
2.500
2.000
1.9
1.8
1.7
1.5
1.500
1.4
1.3
• Sharpened focus on metallurgical coal
1.1
1.000
• Significant sales volume growth achieved
through the successful completion of several
large capital projects
0.9 0.9
0.7
0.500
0.3
0.4 0.3
0.3
0.3
0.3
0.2
0.2
0.1
0.1
0.2
0.2
Q1 '11
Q1 '11
Q2 '11
Q2 '11
Q3 '11
Q3 '11
Q4 '11
Q4 '11
Q1 '12
Q1 '12
Q2 '12
Q2 '12
Q3 '12
Q3 '12
Q4 '12
Q4 '12
Q1 '13
Q1 '13
Q2 '13
Q2 '13
Q3 '13
Q3 '13
0.000
Metallurgical
8
Thermal
• Substantially lower cash costs through project
execution and new management
• Recent sales volume increases driven by
higher premium metallurgical coal sales

10. Q3 2013 HIGHLIGHTS & CONSOLIDATED RESULTS
SALES
MARGIN
OPERATING
INCOME
YTD SG&A
EXPENSE
$349M
$224M
$168M
76%
194%
YTD
EBITDA
$1.1B
17%
HISTORICAL CONSOLIDATED FINANCIAL HIGHLIGHTS 1
• Announced Gary Halverson as President and
Chief Operating Officer.
($ IN MILLIONS)
1,547
1,536
1,489
1,220
1,198
1,545
1,297
1,347
1,141
903
• Achieved lower cost-per-ton rates across all
business segments, and reduced exploration and
SG&A expenses, excluding special items.
• U.S. Iron Ore strong sales volumes expectation
of 22 – 23 million tons in 2014.
Q3 2013
Q2 2013
Q1 2013
Revenue
1Source:
Company filings
9
COGS
Q4 2012
Q3 2012

11. CURRENT PENDING DECISIONS
BLOOM LAKE – PHASE II DECISION
• Future volume & EBITDA
• Stabilization of phase I
• Tailings investment
• Rail take or pay contract
• Future iron ore pricing
WABUSH – OPERATION’S FUTURE
• High quality producing asset
• Sound logistics in place
• High cost structure
• Challenging labor conditions
• Future iron ore pricing
10

12. LIQUIDITY AND CAPITAL STRUCTURE
TOTAL DEBT AND CREDIT FACILITY1
CASH & CASH EQUIVALENTS
(OUTSTANDING, IN BILLIONS)
(IN MILLIONS)
$4.1
$299
$287
$263
$3.9
$195
$3.4
$3.3
$3.3
$36
1
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
DEBT MATURITY PROFILE
(IN MILLIONS)
Baa3 / Stable
BBB- / Stable
$1,750
$900
$500
$0
$0
$0
2013
11
$0
2014
2015
2016
Source: Company filings. 1
$700
$800
2021
2040
$0
2017
2018
2019
2020

13. IRON ORE PRICING VOLATILITY EXPECTED – LONGER TERM FUNDAMENTALS INTACT
Constructive long term
iron ore trends
New supply sources
challenged by rising
costs, capital constraints
and delays
• Developing markets’ iron ore and steel demand remains strong
• Inflation in Australia, Brazil and China
• Marginal cost producers are expected to set pricing floor
•
•
•
•
Resource depletion, reduced quality and decreasing yields
Lack of suitable infrastructure and qualified labor
New supply delayed during 2H 2012 due to volatility
Government intervention is restricting supply expansion globally
IRON ORE 62% FE FINES, CFR CHINA SPOT PRICE (US$/METRIC TON)
$200
$160
$134
$120
$80
$40
Nov-08
Source: Platts
12
Jul-09
Mar-10
Oct-10
Jun-11
Jan-12
Sep-12
May-13
Dec-13

14. SERVING THE RIGHT MARKETS – CHINA & U.S.
MILLION METRIC TONS
CHINESE ANNUAL CRUDE STEEL PRODUCTION AND WEEKLY IRON ORE INVENTORY
Annual crude steel production
Weekly port iron ore inventory
120
800
700
100
600
80
500
60
400
Jan-08
Sep-09
Mar-11
Aug-12
40
Dec-13
Source: Bloomberg, World Steel Association
•
China's crude steel production continues to be healthy,
with year-to-date 2013 annualized run rate averaging over
750 million tons
•
Iron ore inventories at the Chinese ports are at
multi-year lows
•
In the U.S., strong positives have the potential to drive
growth for the remainder of 2013
•
Consumer spending has strengthened
•
Labor market appears to have started an
upward trend
•
Housing is recovering
MILLION METRIC TONS
STEEL PRODUCTION
U.S.
100
91
86
80
Canada
87
89
80
58
60
40
20
15
9
13
13
14
12
0
2008
2009
2010
2011
2012
2013E
Source: World Steel Association
A BALANCED END-MARKET MIX ENABLES CLIFFS TO GENERATE HEALTHY CASH FLOWS
FROM ITS U.S. BUSINESS AND BENEFIT FROM CHINA'S GROWTH
13

15. SUMMARY
• Focused on improving our cost profile through reductions across the Company
• Managing capital spending with discipline
• Enhance balance sheet strength to ensure that our current debt profile is
maintained or improved
• Secure the longer-term sustainability of our core operations through long-term
sales contracts and prudent capital allocation decisions
• Looking forward to the mining experience, expertise, and leadership Gary
Halverson will bring as the new President and COO.
14

16. 2012 PERFORMANCE
U.S. Iron Ore
($mm)
Revenue
Sales margin
Shipments 2
2010
$2,444
788
23.0
Eastern Canadian Iron Ore
2011
$3,510
1,679
24.2
2012
$2,723
976
21.6
•
2012 Revenue
2012 volume decline driven primarily by
specific customer financial circumstances.
•
($mm)
Revenue
Sales margin
Shipments 1
2011 margin favorably impacted by
arbitration settlements.
•
2010
$478
133
3.3
2011
$1,178
291
7.4
2012
$1,009
(121)
8.9
•
2011 volume increase attributed to
Consolidated Thompson acquisition
(3.9mm tons).
•
2012 margin decline driven by reductions
in market pricing combined with higher
spending on contractors, repairs and
maintenance.
17%
Due to reductions in market pricing, limited
tonnage was delivered in export market in
2012.
46%
22%
North American Coal
($mm)
Revenue
Sales margin
Shipments 3
•
2011
$512
(58)
4.2
2012
$881
(2)
6.5
Volume increase in 2012 attributable to
2011 operational issue at Pinnacle and
tornado damage at Oak Grove along with
strong production performance.
15%
2012 margin driven by fixed-cost leverage
improvement and cost reductions at lowvolatile mines.
Million metric tons;
15
15
2
Million long tons; 3 Million short tons.
($mm)
Revenue
Sales margin
Shipments 1
2010
$1,124
566
9.3
2011
$1,364
700
8.6
2012
$1,259
311
11.7
•
U.S. Iron Ore
Asia Pacific Iron Ore
2012 volume increase driven by
completion of Koolyanobbing expansion
project.
•
2012 margin decline driven by reductions
in market pricing combined with increased
stripping costs and logistics costs.
Eastern Canadian Iron Ore
North American Coal
•
1
2010
$438
(29)
3.3
Asia Pacific Iron Ore

17. Q3 2013 OUTLOOK
2013 Segment Expectations
U.S. Iron Ore
•
•
•
Sales volume of 21 million long tons
Cash cost per ton of $65 - $70
Depreciation, depletion & amortization of $6 per ton
Other 2013 Guidance
SG&A and other expenses
•
Full-year SG&A of $215 million
Other outflows of $65 million
− Exploration & drilling programs: $15 million
− Chromite project: $50 million
Depreciation, depletion & amortization of $575 million
•
•
Eastern Canadian Iron Ore
•
•
•
Sales volume of 8.5 - 9 million metric tons
Cash cost per ton of $100 - $105
Depreciation, depletion & amortization of $19 per ton
Cash flows and capex
•
2013 Revenue Price Sensitivity
•
Asia Pacific Iron Ore
•
•
•
Sales volume of 11 million metric tons
Cash cost per ton of $65 - $70
Depreciation, depletion & amortization of $15 per ton
•
•
•
Sales volume of 7 million short tons
Revenue per ton of $100 - $105
Cash cost per ton of $85 - $90
Depreciation, depletion & amortization of $17 per ton
•
•
•
•
1
16
Based on YTD iron ore pricing of $135/ton, the
following is the sensitivity to a $10 change in the
benchmark price across our iron ore business
segments1:
− USIO: $110-$115 (+/- $1) per ton2
− ECIO: $110-$115 (+/- $2) per ton3
− APIO: $110-$115 (+/- $2) per ton4
2014 Sales Volume Guidance
North American Coal
•
Full-year capex of $950 million
U.S. Iron Ore: 22 – 23 million long tons
Eastern Canadian Iron Ore: 5.5 – 6 million metric tons
for Bloom Lake
Asia Pacific Iron Ore: 10 – 11 million metric tons
North American Coal: 6 – 7 million short tons
The year-to-date iron ore price is the average 62% Fe seaborne iron ore fines price (CFR China) as of September 30, 2013. Cliffs expects to update the
year-to-date average iron ore price and the related sensitivities for its respective iron ore business segments in future reporting periods.
2 U.S. Iron Ore tons are reported in long tons. 3 Eastern Canadian lron Ore tons are reported in metric tons, F.O.B. Eastern Canada. 4 Asia Pacific Iron Ore
tons are reported in metric tons, F.O.B. the port.

18. Cliffs Natural Resources Inc.
January 2014