Sep. 25, 2006 — Cleveland-Cliffs Inc. has signed a non-binding term sheet with Centennial Asset Mining Fund LLC, an affiliate of MMX Mineracao e Metalicos SA, for the purchase of 100% of the shares of Centennial Asset Amapa Participacoes SA.

Centennial Amapa owns 30% of the Amapa Project, which is a Brazilian iron ore project consisting of a significant iron ore deposit, a 192-kilometer railway and 71 hectares of real estate property on the banks of the Amazon River for the development of an iron ore terminal. The Amapa Project is currently under construction and expected to produce 6.5 million tonnes of direct-reduction-grade pellet feed annually once fully operational.

Under the non-binding term sheet, Cliffs would purchase 100% of the shares of Centennial Amapa for US$133 million. Cliffs would provide technical support for the construction and operation of the Amapa Project and MMX would provide corporate and institutional support services. It is anticipated that approximately $275 million in future capital will be required for the Amapa Project. Pursuant to the term sheet, Cliffs would be responsible for 30% of such future capital.

Closing is subject to completion of due diligence, completion of financing and negotiation and execution of definitive documents for the transaction, as well as approval of Cliffs' Board of Directors.

Headquartered in Cleveland, Ohio, Cleveland-Cliffs Inc. 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 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.