April 4, 2007 — Cleveland-Cliffs Inc has entered into a definitive sale and purchase agreement to invest in the Sonoma Coal Project in Queensland, Australia. Cliffs had announced Board approval for the investment in January.

Cliffs will invest approximately $109 million to construct a washplant and acquire mining assets and rights as part of its binding terms with privately owned Australian coal company QCoal Pty Ltd. Cliffs will operate and own 100% of the washplant and 8.3% of the mining leases, resulting in a 45% economic interest in the project.

The Sonoma Project is expected initially to produce two million tonnes of marketable coal annually, beginning late in 2007. Production from Sonoma will include an approximately equal mix of hard coking coal and thermal coal. Plans call for annual production to increase to between three and four million tonnes during 2008. The Sonoma Project has a current resource estimate of 107 million tonnes.

“Our interest in the Australian Sonoma Project is integral to our strategy of expanding Cliffs' global presence,” said Cleveland-Cliffs President and CEO Joseph A. Carrabba. “It diversifies our product offerings and provides Cliffs with another means of participating in the expanding Asian steel markets.”

Subject to granting of the mining lease, on which the washplant is to be located, closing is expected to occur before the end of the second quarter of 2007. Cliffs’ Asia-Pacific business unit, which is located in Perth, will oversee Cleveland-Cliffs' interest in the project.

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

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