June 27, 2006 — Cleveland-Cliffs Inc. expects recent price settlements and other contract adjustments to increase prices for all of its 2006 iron ore sales.

Based on current estimates for all adjustment factors, Cliffs expects average 2006 sales revenues for pellets to increase approximately 7.5% to $63.15 per ton from the 2005 average of $58.77 per ton. Cliffs expects its Portman revenue rate to increase roughly $6.60 per tonne (16%) above 2005's average revenue rate of $41.66 per tonne. The company expects 2006 pellet unit costs to increase approximately 11% ($4.70) from 2005's average unit cost of $42.65. Cliffs also expects its Portman operating costs per ton to increase less than 5% from 2005's average unit cost of $35.47.

International settlements have been announced providing for a 19% increase in iron ore fines and lump, and a 3.5% reduction in the price of blast furnace pellets for Eastern Canadian producers. Cliffs stated that sales prices at its 80%-owned Portman operation, which supplies Asian steel producers with fines and lump ore, are directly affected by changes in negotiated iron ore fines and lump prices. However, the negotiated international price for blast furnace pellets is only one of several price adjustment factors included in the company's North American term sales contracts.

Cliffs' estimated average revenue rate on all of Portman's sales will increase 16%, due to the benchmark pricing settlements, changes in sales mix and Cliffs' purchase accounting adjustments, which are related to currency hedges in place at the date of acquisition.

The estimated 7.5% increase in 2006's pellet sales revenue rate includes a number of factors. A combination of contractual base price increases, lag-year adjustments and capped pricing on one contract will increase 2006 average pellet sales revenue $3.28 per ton. The impact of the international pellet price change will reduce Cliffs' 2006 pellet sales revenue by approximately $0.64 per ton. Finally, a reduction in net sales realization due to higher lake freight rates imbedded in sales contract prices will result in a decrease of $0.33 per ton.

Cliffs' 2006 pellet pricing will also be determined by the net impact from other price-adjustment factors that will not be finalized until after yearend, namely changes in the producer price indices (PPI) and average hot rolled coil prices for 2006. Each one-percent increase in the PPI-All Commodities Less Fuel index is currently expected to add $0.12 per ton to Cliffs' 2005 average pellet sales pricing; each one-percent increase in the PPI-Fuel and Related Products index will result in an approximate $0.06 per ton increase to Cliffs' 2005 average pellet sales pricing; and, each $10 per ton increase from $520 per ton average hot rolled price in a number of Cliffs' contracts is expected to result in a $0.30 per ton increase to Cliffs' 2005 average pellet sales pricing.

Commenting on the pricing impact, Chairman and CEO John Brinzo said, "The net positive outcome for our consolidated iron ore pricing in 2006 reinforces our strategy of increasing Cliffs' exposure to the fastest-growing iron ore markets in the world. For North America, the multiple escalator provisions in our long-term pellet sales contracts far outweigh the negative impact of the international price settlements on our North American sales prices.

"Meaningfully higher prices for fines and lump ore being supplied by Portman, coupled with stronger North American pellet pricing, should result in another very good year for Cliffs," he concluded.

The company estimates its share of North American pellet sales at 21 million tons in 2006, of which about 13.5 million tons will be sold in the second half of the year. Portman's sales of fines and lump ore are estimated to be 7.5 million tonnes during the current year, with approximately 4.3 million tonnes sold in the second half of 2006.

Headquartered in Cleveland, Ohio, Cleveland-Cliffs Inc. is the largest producer of iron ore pellets in North America and sells the majority of its pellets to integrated steel companies in the United States and Canada. Cleveland-Cliffs Inc. operates a total of six iron ore mines located in Michigan, Minnesota and Eastern Canada. The company is majority owner of Portman Limited, the third-largest iron ore mining company in Australia, serving the Asian iron ore markets with direct-shipping fines and lump ore.