Cleveland-Cliffs Inc. announced commencement of a negotiated A$3.40 per share all-cash tender offer for all outstanding shares issued by Portman Limited. If the tender offer is fully subscribed, the net acquisition price would total approximately US$465 million (at an exchange rate of A$1 = US$0.77) and would be financed with existing cash and new borrowings of $100 million.

In the absence of a superior offer, the offer has been unanimously recommended by Portman’s board of directors. Portman’s directors have indicated that they intend to accept the offer with respect to their own shareholdings.

Commenting on the tender offer, John S. Brinzo, Cleveland-Cliffs' Chairman and CEO, stated: "This acquisition represents a significant milestone in our long-term strategy for enhancing shareholder value as the company transitions from primarily a mine management company and mineral holder to an international merchant mining company. Through combining two primarily regional producers, we can better lever our iron ore competencies and Asian relationships for the benefit of shareholders of both companies.

"As we have stated previously, we have been seeking opportunities in areas that serve China and other fast-growing steel production centers around the world. Portman has long-term supply contracts with steel producers in China and Japan that currently account for 75%, and 25%, respectively, of sales. Moreover, we are very encouraged by the prospect of further increasing our penetration in the Chinese market and elsewhere in Asia," Brinzo added.

Cliffs stated that it expects the acquisition to be accretive to 2005 results, with additional benefits in 2006 when the expansion tonnage is fully on line. Portman has agreed to pay a break fee of A$6 million if its board of directors withdraws its recommendation of the offer in the absence of a superior competing offer or if a competing acquirer assumes control of Portman.

Cleveland-Cliffs stated that, if the tender offer is successful, it would operate the company much as it has been, under the name of Cliffs Portman. Richard Meaghan, currently Portman's Chief Operating Officer, will become President of Cliffs Portman with responsibility for the company's sales and operations.

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. The company operates six iron ore mines located in Michigan, Minnesota and Eastern Canada.