focused. aligned. disciplined. 2013 sustainability...

Focused. Aligned. Disciplined.2013 SUSTAINABILITY REPORT

© 2014 Cliffs Natural Resources. All Rights Reserved.

Welcome to Cliffs Natural Resources’ 2013 Sustainability Report, which is themed Focused, Aligned, Disciplined. This website-based report focuses on the efforts Cliffs undertook in 2013 to operate in a responsible and sustainable manner, thereby maintaining our license to operate.

The report is organized around nine key areas:

• Our Company • 2013 Highlights • Our Sustainability Strategy • Our Report • Our Operations • Our Team • Our Customers • Our Communities • Our Environment

When you go through the report, hopefully you will recognize that we strive to be good stewards of the environ-ment, a valued neighbor, a customer of choice and a company that attracts and retains talented employees.

Feedback

We welcome any feedback our stakeholders have on this report and our continued progress in sustainability. If you would like to share your comments, please contact Corporate Sustainability at [email protected].



Cliffs Natural Resources has a long history of providing a safe workplace, striving to be good stewards of the environ-ment, and establishing strong and respectful relationships with our communities. These fundamentals provide the foundation upon which we manage our business. First and foremost, safety is a cornerstone of Cliffs’ culture and notably, a Company Core Value. Our goal continues to be aimed at zero safety incidents annually. After a very challenging year, we are making good progress on safety metrics and increasing our efforts to improve overall safety performance. This involves improving our safety procedures and training to avoid hazards to ensure every employee returns home safely every day. Nothing is more important. Cliffs’ operations are often located immediately adjacent to communities where our employees live, work and play. This provides us with both opportunities and challenges. In many of our locations, Cliffs is a major employer in the community. As a result, many of our employees not only commit their time and talent to the success of our business but likewise contribute to the strength of the very commu-nities in which we operate. Since the founding of Cliffs over 165 years ago, this intimate and very local connection with our communities is a vital element of our social license to operate, which means we need to conduct our business in a manner that goes above and beyond our regulatory obliga-tions. Cliffs’ commitment to responsible and sustainable business practices is essential to maintain our corporate reputation

and successfully compete in a globalized and highly cyclical industry and address the trends that are shaping our world and the mining industry. The breadth and depth of stake-holder expectations continues to move up and the industry wide challenge of lowering operating costs, reducing emis-sions and addressing energy security concerns are ever more frequent topics of mining industry conversations.

Simply put, we must be vigilant in addressing these chal-lenges. In 2013, we invested more than $13M in energy effi-ciency projects which significantly reduce our energy related costs and reduce our annual greenhouse gas emissions by more than 45,000 metric tonnes of carbon dioxide. Exploring opportunities to reduce costs and our impact on the envi-ronment will be integral to our ongoing operating strategies and essential if we are to remain globally competitive and environmentally responsible.

As a company, we have been focused on improving financial and operating performance to effectively respond to market challenges and enhance value creation in the near- and long-term. In 2013, we continued to implement initiatives aimed at strengthening our overall performance, including:

• Strengthened our balance sheet with cash flows from operations and reduced capital spending by 50% year over year, all without compromising our commitment to environmental, health and safety related investments

• Reduced the number of environmental incidents by more than 75% since 2012. This is significant progress



towards our goal of zero environmental incidents • Cliffs Foundation giving and Corporate contributions

increased in 2013, reflecting our deep commitment to help build healthy and vibrant communities through our philanthropic activities

The 2013 Sustainability Report provides further information on Cliffs’ performance in 2013 as it relates to Our Company, Our Operations, Our Team, Our Communities, Our Custom-ers and Our Environment.

In 2013, the Cliffs Sustainability Working Group developed a new sustainability strategy that will span 2014 through 2016. This strategy builds on our previous three-year environmen-tal sustainability strategy and is focused on improving our operational efficiency and business performance. In short, sustainability is integrally connected with and supportive of our operational goals and objectives.

Through embedding our sustainability strategy effectively into our corporate strategy, we plan to achieve not only our environmental and social sustainability goals, but also our corporate imperative of ensuring that Cliffs remains econom-ically viable amidst the challenges of a volatile pricing envi-ronment and a deeply cyclical, highly competitive industry. Our objective is to create shareholder value by implement-ing strategies that continue to enhance our social license to operate, improve safety and environmental performance, and reduce operating costs. Through our Focused, Aligned, and Disciplined approach, we look forward to generating opportunities for future generations.



Sustainability is about long-term thinking, long-term planning and long-term results. Our renewed focus on all aspects of sustainability -- environmental, social and economic -- aligns with our corporate strategy by improving efficiencies, reduc-ing our costs and achieving stronger company performance. Our 2014 to 2016 Sustainability Strategy will assist us in enhancing our social license to operate by leveraging our drive toward industry-leading environmental stewardship and community engagement.

In 2013, we recognized the need to make sustainability an enterprise-wide initiative that was more strategic and operationally relevant. Our 2014-2016 Sustainability Strategy embeds sustainability into all aspects of our operations in a manner that aligns with our corporate vision and mission. It incorporates the opportunities and the challenges we face in an increasingly complex and volatile industry.

Stakeholder Consultation

We engage regularly with our stakeholders through public meetings, outreach opportunities, newsletters, presenta-tions, investor communications and other engagement efforts.• In 2013, we developed a three-year Stakeholder En-

gagement Strategy and Stakeholder Map for the Bloom Lake mine in Quebec. This stakeholder engagement

and mapping exercise served as a pilot program to formalize our OneCliffs Stakeholder Engagement Standard, which is scheduled to be rolled out to other operations in 2014.

• Other stakeholder engagement activities for 2013 included the ongoing stakeholder engagement effort and environmental assessment for the Chromite Project. Although this project has been suspended indefinitely, we will continue to consult with the relevant stakeholders as appropriate.

The information contained within this report aligns with these engagements, our risk process and the relevant business activities that occurred during 2013.

We understand the important role all of our stakeholders play in our success. In developing this sustainability report, we have considered input from a range of stakeholders, including:

• Academia • Business partners • Customers • Elected officials • Employees • Investors • Labor unions

We continue to build on a strong foundation of sustainability across our global organization, generating value for our business, our stakeholders and our communities.



• Local businesses • Local communities, Indigenous and Aboriginal commu-

nities • Local, State/Provincial and Federal government agen-

cies • Non-governmental organizations • Suppliers • Trade organizations

These stakeholder groups helped us to determine which issues were material and should be addressed within this report.

Materiality and Reporting Boundary

Our goal is to produce a sustainability report that is rel-evant to all of our stakeholders and our overall business objectives. To better understand the issues that are most material to our business, we engaged a third-party provider to help us conduct a thorough materiality assessment. This assessment first identified potentially relevant issues and determined the significance of each issue. Stakeholders then scored the issues based on a defined scoring system. The materiality chart below highlights the economic, environ-mental and social aspects that were material to our business in 2013.

All of the material aspects identified have an impact within the organization. Any changes to the scope and aspect boundaries from the previous reporting periods reflect either changes to the size of our operations or the migration from GRI G3.1 to G4.

Report Profile

This report is intended to disclose material information for the 2013 calendar year, from January 1 through December 31.

However, given recent business decisions made in early 2014, we have elected to report on some of our achieve-ments and challenges that have occurred in the first three months of 2014 which we have deemed to be material to our stakeholders and business. The data we used to produce this report spans all operations where our Company has more than a 50 percent ownership stake or where we exer-cise control through a management contract for the entire 2013 calendar year.

For more information regarding our performance in 2013, please refer to our Form 10-K filed with the Securities Ex-change Commission.

We have been reporting on our sustainability progress since 2008. We issued our most recent sustainability report in 2013, covering our 2012 fiscal year. We remain committed to reporting on our activities annually.

There have been no restatements related to this report.

Sustainability Reporting Guidelines

This report reflects our reporting strategy, which is to tran-sition over time from the GRI G3.1 Sustainability Reporting Guidelines to the GRI G4 Sustainability Reporting Guidelines (GRI G4). As such, this report includes many key reporting principles and disclosure reporting requirements of GRI G4. We plan to obtain external assurance in future years’ reports.

Feedback

We welcome any feedback our stakeholders have on this report and our continued progress in sustainability. If you would like to share your comments, please contact Paul West, Director, Corporate Sustainability at [email protected].



Cliffs Natural Resources Inc. (Cliffs) (NYSE: CLF) (Paris: CLF) is a major global iron ore producer and a significant producer of high- and low-volatile metallurgical coal. We have been operating responsibly for more than 167 years within an industry characterized by challenging market cycles.

Driven by the Core Values of safety, social, environmental and capital stewardship, Cliffs’ associates across the globe endeavor to provide all stakeholders with operating and financial transparency. We are organized through a global

commercial group responsible for sales and delivery of our products and a global operations group responsible for the production of the minerals that we market.



Global Operations

Cliffs’ headquarters is located in Cleveland, Ohio, USA. Our operations are organized according to geographic location: United States Iron Ore, Eastern Canadian Iron Ore, Asia Pacific Iron Ore and North American Coal.

Mineral Portfolio

Iron OreWidely recognized for innovation in iron ore mining and pro-cessing technologies and joint-venture management, we are committed to providing high-quality, cost-effective iron ore products. Our North American operations produce concen-trate and 13 grades of iron ore pellets, including standard, fluxed and high manganese. We supply Asia Pacific steel-makers with direct-shipping fines and lump iron ore.

CoalWe produce high- and low-volatile metallurgical coal for use by the steel, merchant coke and foundry coke indus-tries. Metallurgical coal is a blast furnace injection product in steelmaking which reduces the coke quantity required in production of pig iron. Our reserves are some of the larg-est high-quality metallurgical coal reserves in the United States. Because of its association with our metallurgical coal reserves, we also mine minor amounts of thermal coal for energy production.

FerroalloysChromite is a natural resource used to produce ferrochrome, a critical ingredient in the production of stainless steel. The mining of chromite and the production of ferrochrome large-

ly occurs in South Africa and Asia, requiring most stainless steel producers in North America to import the product. In 2010, we acquired the largest known chromite deposits in North America, located in Northern Ontario.

Although remote and with significant infrastructure chal-lenges, our chromite deposits are considered world-class in terms of tonnage and grade. Developing this project will require a major investment of money and resources, along with the support of many key stakeholders.

In 2013, we indefinitely suspended the project due to the uncertain timelines and risks associated with the develop-ment of necessary infrastructure to bring this project online. However, we continue to believe in the value of the miner-al deposits and the potential this region offers. Although the project is suspended indefinitely, we continue to have ongoing dialogue with the Government of Ontario and First Nation communities regarding regional infrastructure.

Global Commercial Group

Our Global Commercial Group builds strategic customer relationships to facilitate the sale of our iron ore and coal, and manages the global transportation and logistics func-tions of our operations. While we are uniquely positioned as



the largest supplier of pellets to United States-based blast furnaces, our operations in Eastern Canada and Australia are positioned to supply the growing Asian customer base. We have realigned sales and marketing management re-sponsibilities from a regional approach to a global structure, allowing us to manage the challenges and opportunities that arise from serving several customers in multiple markets.

Our global commercial structure enables us to enhance our customer service to existing customers and refine our sophistication in targeting new customers. We also recog-nize the importance of logistics in our business. Premium assets in close proximity to well-capitalized infrastructure are becoming a phenomenon of the past. Today, investments in complex infrastructure and logistics networks are growing

as premium-mining districts are established in more remote locations. We believe the infrastructure component within the mining industry will be key to unlocking future value for our stakeholders.

Global Exploration Group

Our Global Exploration Group establishes partnerships with mining and exploration companies, towards its objective to secure resources through direct investment and coopera-tive exploration efforts. Our relationships with exploration companies allow us to invest capital in prospects for various commodities throughout the world. In alignment with our capital allocation strategy, we anticipate significantly de-creased levels of exploration spending in 2014.

Governance and Policies

Board and Executive Structure

Our Board comprises an active group of directors who inter-act frequently with our senior management team. Our Board oversees and monitors the critical activities and overall results of our business. See the “Corporate Governance” section of our Investors site to learn more about our Board of Directors.

Throughout 2013, we made a number of changes to our Board and senior management team, such as separating the roles of Chairman and Chief Executive Officer and ap-pointing an independent director as Chairman of the Board.To read more about the Board and Executive changes that took place at Cliffs during 2013 , please visit the “News Releases” section of our corporate website.

CommitteesIn 2013, our Board maintained four committees: Audit, Governance and Nominating, Compensation and Organiza-tion, and Strategy and Sustainability. The charters for these Board-approved committees describe the respective func-tions, responsibilities, areas of risk oversights, membership

qualifications and reporting procedures, and are available on the “Corporate Governance” section of our Investors website. Audit CommitteeThis committee is responsible for assisting our Board in its oversight responsibilities with respect to financial reporting and compliance, independent auditors, internal accounting and financial controls, internal audit function, enterprise risk management, conformity with applicable legal requirements and our Code of Business Conduct and Ethics.

Governance and Nominating CommitteeThis Committee is responsible for such governance matters as identifying and recommending potential director nomi-nees and director committee assignments, reviewing and recommending applicable Corporate Governance Guide-lines, reviewing director compensation and benefit plans, assessing the size and makeup of our Board, and participat-ing in the annual review of our Board’s performance.



Compensation and Organization CommitteeThis Committee is responsible for establishing and adminis-tering our policies, programs and procedures for compen-sating management, recommending officers to our Board, approving and evaluating the performance of our officers, succession planning strategies and approving relevant sec-tions of our proxy statement.

Strategy and Sustainability CommitteeThis Committee, formerly the Strategy and Operations Com-mittee, was renamed the Strategy and Sustainability Com-mittee in January 2012.

In 2013, it was responsible for overseeing our strategic plan and monitoring and reviewing the merits or risks of business decisions regarding major projects, acquisitions or joint ventures and strategic alliances.

Conduct and Ethics

Our Core Values and the Code of Business Conduct and Ethics provide guidance to every one of our employees. See the “Corporate Governance” section of our Investors site to learn more about our Board of Directors (Board), Code of Business Conduct and Ethics and Corporate Governance Highlights.

We are committed to undertaking business practices that are ethical, honest and accountable-a position that has earned us a reputation for fairness, trust, and honesty around the globe. We operate in accordance with the high-est ethical standards and we entrust each of our employees with upholding these standards in our day-to-day activities.

Business Ethics

Our continued success depends on our individual and col-lective commitment to our Core Values, and the principles and standards established in “The OneCliffs Way of Doing Business . . . our Global Code of Business Conduct and Ethics,” which sets forth our commitment to act with integrity and in compliance with the law wherever we operate.

“The OneCliffs Way” is built on our Core Values and is sup-ported by policies and procedures encompassing an array of key topics, including Fair Competition and Anti-Corrup-tion. These topics, as well as subjects relating to conflicts of interest, insider trading, financial reporting, safety, environ-mental stewardship and others are included in our annual code of business conduct and ethics training.

In 2013, more than 99 percent of all Cliffs’ salaried employ-ees participated in these training activities. We also provide, through a third-party administrator, both telephone-based and web-based ethics helplines which empower our em-ployees or stakeholders to report behavior that may contra-vene “The OneCliffs Way”. Reports can be made anony-mously, if so desired.

In 2014, our goal is to have 100 percent of salaried employ-ees complete code of business conduct and ethics training.

Fair Competition

Our Core Values include Ethical Behavior, Customer Focus and Creating Economic Value. These values need never conflict. Our Company earns business and succeeds by outperforming our competition fairly and honestly. We do this by producing leading products based on design and perfor-mance, and never through unfair business practices.

We abide by all applicable competition laws (also called “an-titrust” laws) in the countries where we operate. Each one of our employees is responsible for being aware of the com-petition laws and regulations that apply to their job functions and complying with them fully. Our Antitrust Policy contains practical compliance guidelines. In 2013, no legal actions relating to anti-competitive practices were taken against us.For more information regarding our governance philosophy, see the “Governance Highlights” section of our Investors website.



Anti-Corruption

We have an extensive anti-corruption compliance program. This program includes conducting in-person, video confer-ence or electronic training with targeted employees on our Foreign Corrupt Practices Act policies and Anti-Corruption Policy. In addition to training, management also issues periodic communications regarding anti-corruption compli-ance to targeted employees as developments in the law or Company policy occur.

Highlights of our anti-corruption compliance activities in-clude:

• due diligence requirements prior to engaging certain third party representatives, based upon services per-formed, geographic boundary and other factors

• quarterly monitoring of our third party representatives• pre-approval requirements for selected transactions

involving government officials• identification of transactions involving government offi-

cials in employee expense reimbursement reporting• quarterly review of expense reimbursements, including

gift-giving and entertainment, relating to government officials

Our controllers are also required to disclose on a quarterly basis any potential anti-corruption red flags or concerns that have been identified. We encourage employees to contact our ethics helpline to register potential violations at any time.

Core Values

We are committed to doing the right thing in all our business dealings. Our first priority is to conduct busi-ness safely, honestly, transparently, and as a team, while focusing on our customers and creating value for our Company in a sustainable manner.

Our Core Values contribute to our ability to overcome business challenges. They guide us when we have to make difficult decisions in complex situations. They also help us to maintain the trust we have built with our stakeholders and with each other.

Core Values

Safe ProductionRecord production with: lack of injuries ... good housekeep-ing and orderly work areas ... well-maintained equipment ... proper training and procedures ... looking out for and correcting each other ... safe conditions and behavior ... Sentinel of Safety qualification.

Environmental StewardshipGoing beyond compliance ... being socially responsible ...

anticipating and addressing potential impacts before they occur ... personal accountability ... operating to preserve the environment for future generations.

Ethical BehaviorConducting business with honesty, fairness, integrity and full compliance with all applicable laws.

Customer FocusListening to the customer ... being responsive and on time ... meeting quality expectations ... helping the customer succeed.

Creating Economic ValueDoing the right things right the first time ... elimination of waste and inefficiency ... breakthroughs in productivity and technology.



Group and Individual AccountabilityBehaving in line with our Core Values ... being responsible for our actions ... providing plans/standards/expectations ... holding yourself and/or the group to a high standard of performance ... walk the talk.

Trust, Respect and Open CommunicationOpen access to information ... constructive conflict ... delegation to the appropriate level ... toleration of failure in pursuit of business success ... encouraging and accepting different views ... feeling an obligation to explain your ac-tions to those affected ... gender and racial diversity.

Bias for ActionGetting things done ... reduced red tape ... “barrierless” ... call anybody you want ... management by fact ... plan the work, work the plan.

TeamworkActively involve others in decision-making ... know when to take a leadership role and when to be an active member ... recognize the value of teamwork and the synergy it creates.

Recognize and Reward AchievementCelebrating successes ... stress training and development ... an effective appraisal of performance ... expressing a simple thank you.

Awards and Recognition

We are always honored when respected organizations recognize our achievements, and we are proud of our employees who make such recognition possible. The following highlights represent some examples of our achievements in 2013. To read more, please visit the “Awards and Recogni-tion” section of our corporate website.

Local Chamber Names Hibbing Taconite “Business of the Year”

In February 2013, the Hibbing Chamber of Commerce hon-ored Hibbing Taconite as the “Business of the Year”, citing its dedication and service to the community and employees, as well as the operations’ demonstrated growth and stability.

Cliffs Receives Distinguished Service Award from the Lake Superior Community Partnership

In March 2013, Marquette County’s Lake Superior Commu-nity Partnership (LSCP) honored our Company with the 2012 “Distinguished Service Award”. The award recognizes com-panies and individuals who make significant investments and economic impact in the community and to the LSCP.

As the second largest employer in Marquette County, Cliffs delivered an economic impact of $879 million to the area in 2012, including annual payroll, services and supplies and lo-cal taxes. We also donated, through a number of channels, nearly $430,000 to the local community.

Cliffs’ Minnesota Operations Wins Business Im-provement Award

In May 2013, our Minnesota operations proudly received the “Immersive Technologies’ 2012 Business Improvement Award” for outstanding results in mining operator training through the use of heavy equipment simulators. We were chosen from more than 230 global mining operations in 33 countries.



Hibbing Taconite and Northshore Mining Receive “Above and Beyond Award” for Military Support

Hibbing Taconite and Northshore Mining were proud recip-ients of the “Above and Beyond” award from the Employer Support of the Guard and Reserve. This exclusive award recognizes employers who have gone above and beyond the legal requirements for granting leave and providing sup-port for military duty by their employees. Hibbing Taconite and Northshore Mining were nominated for the award by two of our employees, citing the support they and their families received when they were deployed.

Cliffs’ Pinnacle and Oak Grove Mines Excel at the 2013 National Coal Mine Rescue Competition

Our Mine Rescue Team from the Pinnacle Mine recently won first place at the 2013 National Coal Mine Rescue Competi-tion. The bi-annual competition is sponsored by the National Mining Association and administered by the United States Department of Labor’s Mine Safety and Health Adminis-

tration. Competition events ranged from first aid to more complex mine rescue scenarios. More than 80 rescue teams from 12 states competed.

This is the second time that our Pinnacle Mine rescue team has won the national championship. Our Oak Grove Mine Rescue Team also performed well at the competition, secur-ing second place in the first aid event.

Cliffs Honored for Gender Diverse Board of Directors

In December 2013, the Women’s Forum of New York recog-nized Cliffs for having at least 20 percent female representa-tion on their Board of Directors.

Cliffs Honored with NorthCoast 99 Award

In 2013, for the third consecutive year, NorthCoast 99 iden-tified Cliffs as one of 99 great workplaces for top talent in Northeast Ohio.



As an international mining and natural resources company, Cliffs is dedicated to achieving excellence in our operations, maintaining financial discipline, meeting the changing needs of our customers and continuing to diversify our asset portfolio in order to drive long-term share-holder value.

Vision and Mission

Cliffs Natural Resources is an independent, owner-operator mining company supplying the global steelmaking industry.

• Operational excellence is our foundation - We have deep technical expertise and focus on safety, responsi-ble stewardship and continuous improvement.

• Customer excellence is fundamental - We succeed together with our customers.

• Financial discipline enables our success - We achieve superior economic performance.

• People are our strength - Attracting and developing in-dustry-leading talent are vital differentiators in achieving our goals

We are a mining company with which customers seek to establish a long-term partnership, valued by communities as a neighbor and a place where employees want to work.

Organizational Changes

In 2013, we have instituted a number of leadership, organi-zational, and operational changes. In addition to new Board of Director (Board) members being elected, significant

changes were also made to our executive leadership team. At a functional level, we de-layered the Company’s organi-zation structure and instituted direct reporting relationships to the President and Chief Executive Officer to streamline operations and facilitate timely decision-making.

To read more about the organizational changes that took place at Cliffs during 2013 , please visit the “News Releas-es” section of our corporate website.

Key Business Decisions

Across the organization, the Board and executive team made several challenging decisions in 2013 and early 2014. While some of these decisions affected the jobs of our em-ployees and the future of certain projects, they were neces-sary to reduce our capital and operating costs to ultimately improve Cliffs financial position for the near and long term. As a result of these changes, we lowered our expected full-year 2014 capital spending by more than 50 percent to a range of $265-325 million, based on a year-over-year comparison. We also reduced our full-year 2014 expected Selling, General and Administrative (SG&A) and exploration spending by more than 30 percent to approximately $200 million.



Our objectives in 2013 were - and continue to be - to:

• Reduce costs • Strengthen our balance sheet with cash flows from

operations • Take a disciplined approach to capital spending • Evaluate the strategic fit and value creation potential of

all of our assets

Supported by our corporate strategy, we are positioning Cliffs to be stronger and more responsive to changing mar-ket conditions. We are confident that the decisions we are making today will enable us to generate sustainable, long-term value for all of the Company’s stakeholders.

Extending Empire Mine Supply Agreement In 2013, we began preparing for the closure of the Empire Mine in Michigan, which we expected to occur in late 2014. However, in late February 2014, we reached an agreement with ArcelorMittal USA Inc. to extend our commercial agree-ment to supply iron ore pellets for an additional two years. This has enabled us to extend the mine’s life until 2016. The decision to extend the contract will benefit our share-holders, employees, suppliers and the local community.

Idling Wabush MineDriven by the asset’s high cost structure and the lower mar-ket pricing, we have idled our Wabush Mine. 500 employees were affected at the operation’s facilities in both Newfound-land and Labrador and Quebec.

We recognize the impact these decisions have on em-ployees, their families and the communities. To help them through these challenges, we supported and partnered with the affected communities to explore new opportunities for our former employees, including training for other industries and recruitment assistance.

Idling Wabush Pellet PlantIn March 2013, we made the decision to idle the Wabush pellet plant at Pointe Noire in Sept-Îles, Quebec. High pro-duction costs and lower pellet premium pricing converged to make the operation economically unsustainable. Unfor-tunately, this decision impacted approximately 165 employ-ees.

Indefinitely Suspending Bloom Lake Phase II ExpansionIn early 2014, we announced that we are curtailing the ex-pansion of the Bloom Lake Mine, and contining with Phase I operation only. Although Phase I remains viable in the current market, we also announced that we are prepared to idle Phase I if pricing and operating costs justify such an alternative action.

The indefinite suspension of Phase II has enabled us to defer and lower our year-over-year capital spending while continuing to operate Bloom Lake.

Indefinitely Suspending the Chromite ProjectIn light of the uncertain timeline and risks associated with the development of necessary infrastructure to bring this project online, we decided not to allocate additional capital to the project in November 2013.

Although we have indefinitely suspended the project, we continue to believe in the value of the mineral deposits and the potential the Ring of Fire region offers. We will continue to work with all of our partners, including First Nations and the Governments of Ontario and Canada, to develop a plan for regional infrastructure that will benefit communities and allow for development of the Ring of Fire’s mineral potential.

Restarting Two Taconite Production Lines at Northshore In October 2013, we announced that we will reopen two taconite production lines in 2014 at our Northshore Mine in Silver Bay, Minnesota, to meet an increase in customer demand.

The reopening is positive news for the large number of em-ployees who had been affected by the idling of the produc-tion lines in January 2013.



Throughout our 167 year history, we have understood that our license to operate hinges on successfully attending to economic, social and environmental stewardship.

2011

In our 2011 Sustainability Report (page 55), which you can download in PDF format, we communicated our environ-mental sustainability strategic plan that focused on carbon and water leadership, biodiversity and Environmental Man-agement Systems.

2012

In 2012, we updated the name of our sustainability-focused Board Committee from the Strategy and Operations Com-mittee to the Strategy and Sustainability Committee.

2013

In 2013, this committee reviewed the impact risks may have on business decisions relating to major projects, acquisi-tions, or joint ventures and strategic alliances, and provided guidance on our global sustainability initiatives. We recog-nized the need to expand our sustainability scope.

As such, we began to develop a new cross-enterprise sustainability strategy that would address all aspects of our organization. We assessed the challenges, trends, and threats potentially affecting each of the Company’s business units and key functional groups.

These issues largely fell into five categories:

• Stakeholder engagement • Operational sustainability • Corporate sustainability • Product stewardship • Environmental stewardship

To assist in the development of this broader scoped sus-tainability strategy, we established the Cliffs Sustainability Working Group, which comprises representatives from each of our business units and key functional groups. The Sus-tainability Working Group attended workshops throughout the year to develop the sustainability strategy.

The graphic on the next page illustrates the established sus-tainability action plan for 2014 through 2016, as well as 2013 projects completed or underway.



We create both direct and indirect value through focused, aligned and disciplined performance, creating best practices around our core business and acting as a responsible corporate citizen.

Market Overview

Global demand for steelmaking raw materials in both emerging and developed economies drives our business. The United States and China represent two of our largest markets.

Global Steel ProductionGlobal crude steel production in 2013 increased approx-imately 4 percent compared to 2012. We attribute this growth, in part, to the ongoing recovery in developed mar-kets, including the United States and the Eurozone Defined as countries that have adopted the Euro as their currency., as well as rapid growth markets such as China.

Although the United States experienced a year-over-year decline in total crude steel production in 2013, the industry saw healthy demand for steel from both the automobile and oil and gas industries. In China, investment in infrastructure remained the dominant driver of domestic steel demand and production, as its commodity-intensive growth continued. Year-to-date Platts pricing increased 3.9 percent during the full year ending December 31, 2013.

CoalMetallurgical coal continued to experience an oversupply of product largely due to increased supply from Australian producers. Low demand by European, Japanese and South American metallurgical coal consumers also influenced the decline of the quarterly benchmark price for premium low-volatile hard coking coal between Australian metallurgi-cal coal suppliers and Japanese/Korean consumer, which decreased to a full-year average of $159 per metric ton in 2013 from $210 per metric ton in 2012.

OutlookIn 2014, we anticipate economic growth in the United States to accelerate, increasing demand for steelmaking raw materials. In China, we expect the economy will continue to expand rapidly, primarily driven by fixed asset investment. Overall, we expect growth in both the United States and China will provide a continued source of demand for our products in 2014.

For additional 2013 market details relating to our Company, please refer to our 10-K filing.



Core Values

Our overall success and profitability is dependent on several factors. Although we cannot control the market pricing for our products -- a significant driver of our results -- our continued focus on our strategic alignment to certain markets, operational efficiencies, product quality, talent management, and capital allocation discipline will position the company for future success.

2013 Financial Performance

Our consolidated revenues for the years ending December 31, 2013 and 2012 were $5.7 billion and $5.9 billion respec-tively, with net income from continuing operations per diluted share of $2.36 and net loss from continuing operations per diluted share of $6.57, respectively.

Net income in 2013 was affected negatively by $154.6 million of other long-lived asset impairment charges related to our Wabush operations within our Eastern Canadian Iron Ore operating segment, an $80.9 million goodwill impair-ment charge related to our Cliffs Chromite Ontario and Cliffs Chromite Far North reporting units within our Ferroalloys operating segment, and a $67.6 million asset impairment charge related to our investment in Amapá.

This was offset by lower exploration spending in 2013, pri-marily related to the Chromite project.

Earnings in 2012 were affected adversely by impairment charges including impairment of goodwill and other long-lived assets of $1,049.9 million within our Eastern Canadian Iron Ore operating segment and a $365.4 million impairment charge related to our investment in Amapá. Additional items that adversely affected earnings in 2012 included the establishment of valuation allowances against certain deferred tax assets and higher spending, which par-tially were offset by total increased iron ore and coal sales volumes at most of our operations around the world.

The chart on the next page describes the direct econom-ic value we generated and distributed over the past three years.



In 2014, we will sustain our strategic course, executing ini-tiatives that improve our cost profile and long-term sustain-ability.

Two of our financial objectives in 2014 are:

• Reduce selling, general and administrative (SG&A) and exploration expenses by more than $90 million

• Reduce year-over-year capital spending by more than 50%.

For more information related to our economic performance in 2013, please refer to our 10-K filing.

Reducing Unscheduled Maintenance-Related Delays

In 2013, we continued to implement the General Repair Improvement Process maintenance program. This program aims to reduce the number of unscheduled maintenance-re-lated delays by monitoring the pre-planning and scheduling functions for repairs and maintenance. The program also defines the standards and accountabilities our maintenance process must follow. Through this program, our Tilden op-erations in Michigan have seen a significant reduction in the number of the unscheduled maintenance related downtime hours between 2011 and 2013.



We are committed to protecting the occupational health and well-being of each of our employees. Safety will always be our first Core Value. We strive to achieve zero injuries and incidents company-wide.

Approach

In 2013, we focused on proactively identifying the necessary prevention activities, establishing standards and evaluating performance to mitigate any potential loss to people, equip-ment, production and the environment. We have implement-ed intensive employee training to maintain awareness and knowledge of safety and health issues in the work environ-ment. We continuously monitor, track and measure our safe-ty performance and make changes where necessary. We also share leading practices globally so that each mine site can embed our policies, procedures and lessons learned to improve our safety performance.

We base our safety management approach on behavioral science. We identify, analyze and track behavior for correc-tion. We have a health and safety plan template for each site, comprising more than 30 internal safety standards that specify which systems need to be in place at the site level. Each site is given the latitude to manage safety in a way that best fits the culture of the site; however, all sites must comply with our standards for each area of risk.

Organizationally, we have a safety manager at each site who reports to the General Manager. Safety Leadership Modules provide the framework for integrating behavioral science into the daily activities of line management. Health and Safety scorecards outline what we expect from safety activities and provide performance metrics that can provide comparative data. We also track behaviors that lead to incidents so that we may prevent the same risk from occurring in the future.

Measurement We measure progress toward achieving our objective against established benchmarks, including measuring company-wide total reportable incident rates (TRIR). TRIR is then embedded into safety scorecards that establish a road-

map for safety performance. We also facilitate job planning discussions and provide the necessary equipment to ensure that our employees perform their jobs more safely.

In addition to TRIR and scorecards, we conduct internal and external safety audits. We conduct comprehensive internal audits with employees to ensure adherence to our safety standards. We also undertake field audits to review docu-mentation and observe employee behavior. Externally, in the United States, the Mine Safety and Health Administration (MSHA) conducts periodic audits of our sites.

In 2013, we launched a safety portal that houses all of our safety-related data, including incidents and details regarding corrective actions. This new one-stop-shop for safety data will enable us to more accurately identify the areas of safety where we excel and where we need improvement, by region and site.

For our Eastern Canadian Iron Ore operations, we continued to develop our safety management systems to align with the Canadian Mining Association’s Towards Sustainable Mining health and safety protocol.

2013 Safety Performance

Tragically, we experienced a fatality at one of our operations in 2013. Although subsequent investigations concluded that the fatality was due to natural causes and was not work related, the incident was traumatic for the individual’s family, colleagues and to the local community.

Despite our continued efforts to improve our safety per-formance, our TRIR and Lost Days Severity Rate both increased in 2013. As part of our continuous improvement activities, we have expanded our safety training, and have conducted more frequent and interactive discussions about hazard identification and control. We will also continue to

Safety



encourage employees to report any unsafe actions or con-ditions they observe. Every employee must remain safe and sound every day at every mine site. We will continue to do everything we can to make sure that happens.

In 2014, our objectives are to reduce all safety-related acci-dents by 15 percent and achieve zero fatalities.

The charts below reflect our safety performance for 2013, as well as a comparison of our safety performance against other United States industries.

Cliffs’ Toney Fork Surface Mine Marks MilestoneIn November 2013, employees at Cliffs Logan County Coal’s Toney Fork Surface Mine in West Virginia celebrated 1,000 days without a lost-time incident (LTI). In total, forty-seven employees of the mine worked more than 550,000 hours without an LTI. Cliffs Logan County Coal was also the receipt of the 2013 Joseph A. Holmes Safety Association Award for outstanding safety performance during 2012.

Management-Worker Health and Safety Committees/Training [G4-LA5, G4-LA8]Formal joint management-worker health and safety com-mittees typically operate at a site level. 100 percent of our workforce at our United States Iron Ore, Eastern Canadian Iron Ore, Pinnacle and Oak Grove operations is represented in formal joint management-worker health and safety com-mittees. At our Asia Pacific Iron Ore operation, our contract partner is responsible for the mine operations workforce. Logan County Coal operations and our corporate workforce, which represents less than 10 percent of our total workforce, are not represented by a formal safety committee.

Definitions

Total Reportable Incident Rate

Total Reportable Incident Rate is the rate of reportable injuries requiring medical treatment, restricted duty, and lost time combined per 200,000 hours worked -

calculated as the number of reportable incidents multiplied by 200,000, divided by total hours worked by all employees.

Lost Days Severity Rate

Lost Days Severity Rate is the rate at which normal roster workdays or shifts are lost as a consequence of lost time injuries per 200,000 hours worked - calcu-

lated as the number of lost shifts multiplied by 200,000, divided by total hours worked by all employees.

Lost Time Incident Rate

Lost Time Incident Rate is the rate of occurrence of lost time injuries per 200,000 hours worked - calculated as the number of lost time incidents multiplied by

200,000, divided by total hours worked by all employees.

In addition to the oversight performed by these health and safety committees, we regularly conduct health and safety training with our workforce.

Further, the formal agreements with trade unions and all operations in 2013 included the following health and safety obligations:

• hazard controls • hazard recognition • ncident investigations • inspections • medical examinations • medical records • personal protective equipment • representation • surveillance and ergonomics • training



Emergency Preparedness

We understand the importance of being prepared for un-planned emergency situations. Our emergency response and crisis management plans reinforce our continued com-mitment to prevent harmful events where possible and re-spond swiftly and effectively when adverse events do occur to minimize the level of damage and disruption to operations and communities.

We have developed and are continuing to improve upon the emergency response standards that are applicable compa-ny-wide. Each operation has developed site-specific emer-gency response plans based on these standards. In doing so, each site’s management team and third-party profes-sionals are involved to ensure we consider each operation’s unique attributes and characteristics.

ProceduresAt a minimum, emergency response plans include proce-dures for:

• emergency coordination and communication with exter-nal responders and agencies

• hazardous materials spills and environmental releases • evacuation • personal protective equipment

Emergency response plans also include procedures for:

• medical response • plant shutdown • power outages • technical rescue • violent threats (e.g., bomb threats or terrorism)

In addition to our emergency response plans, we also have a crisis management plan that outlines how we plan to coordinate with external agencies, as well as communication protocols with employees, the community and appropriate government officials to keep everyone updated as fast as possible throughout an emergency.

We have trained teams at each site. We assess, develop and execute exercises for test simulations on an annual ba-sis. We review and adjust our plans and procedures based on the results of these simulations, as well as any trends, industry-wide incidents and personnel changes. Our pre-paredness, capacity and response time allows us to careful-ly navigate situations while diligently executing our plans.

Incident Response

In 2013, an ammonium nitrate truck overturned at the entrance of our Hibbing Taconite Mine in Minnesota, which triggered a maximum severity emergency response. We followed the emergency response plan’s procedures to address fire and environmental hazards. We coordinated with local fire officials and issued a press statement to local media to inform the community of the issue and the actions we were taking to resolve it. Fortunately, the fire and envi-ronmental impacts were minimal as the load was stable and contained quickly and appropriately. While the truck driver sustained minor injuries, no other people were injured in the incident.

Also in 2013, we executed partial emergency responses to address two separate incidents at our Michigan facilities. One related to a fire at one of the storage buildings, while the other related to a fatality due to natural causes.

Following all of these incidents, a root cause analysis was undertaken to determine any areas for improvement in our response and our ability to make our facilities safer. All recommended improvements were either immediately implemented or embedded within action plans for future execution as part of a broader initiative.

In 2013, we reviewed and updated our Bloom Lake Crisis Management Plan to ensure greater alignment with the Canadian Mining Association’s Towards Sustainable Mining crisis management protocol.



Supply Chain

Our operational focus on a sustainable supply chain enables us to strike a balance between efficiency and the environment. Our supply chain is divided into two disciplines:

Global Strategic SourcingGlobal strategic sourcing focuses on fulfilling major busi-ness requirements with large contract sizes. This function evaluates the market for requirements and impact on the business, negotiates outcomes, and awards and imple-ments supplier contracts. The function operates centrally, but executes at an operational level.

Global Materials ManagementGlobal Materials Management takes over once the supplier signs the contract. This function supports center-led con-tracts, governance of contracts and inventory management. This function also manages procurement, which is site-based and center-led, inventory control warehousing and warranty administration.

Our sustainability efforts within our supply chain focus on decreasing energy consumption and emissions, increasing alternative energy use and minimizing waste and packaging. We also build sustainability metrics into the criteria of our supplier selection process.

Additionally, all suppliers must adhere to the principles set forth in The ‘OneCliffs’ Way of Doing Business - our global code of business conduct and ethics, as well as the Code of Conduct for Cliffs’ suppliers. This Code of Conduct defines the basic requirements to which suppliers must adhere relating to legal compliance, prohibition of corruption and bribery, respect for basic human rights of employees, health and safety, environmental protection and non-discrimination.By requiring our suppliers to meet these requirements, we have increased awareness and influenced their sustainability strategies. In response, our suppliers have proposed inno-vative solutions which have enabled us to reduce our envi-ronmental footprint and improve operational performance.

2013 Supply Chain Strategy

In 2013, our supply chain function developed a strategy with financial and operational performance and talent manage-ment targets that align with our corporate objectives. The supply chain strategy also includes performance objectives relating to materials management, sourcing safety, and sourcing sustainability.

Building Trust with First NationsFor a number of years, we have been working closely with the First Nation - Innu Takuaikan Uashat mak Mani-Utenam (ITUM) community to build trusting and workable relation-ships, increase organizational awareness and formalize feedback channels for our Eastern Canadian Iron Ore opera-tions.

In 2013, as a result of a collaboration with the ITUM com-munity initiated during the previous year, we implemented a new formal procurement process that gives local suppliers greater access and involvement in sourcing opportunities at our Bloom Lake operations. Since 2010, we have awarded supply contracts totaling $160 million to the Innu Partnership and partner suppliers, and in 2013 alone, we awarded $60 million in contracts to Innu suppliers and their partners.

De-icing Alternatives at North American Iron Ore OperationsAt most mine operations that experience very cold condi-tions, chloride-based de-icers are often applied to reduce the impact of weather. Although chloride is an affordable de-icer, it is highly corrosive and can negatively impact flora, fauna and waterways. At our Northshore Mining operation, we began investigating the suitability of alternative products to reduce chloride de-icer use and its related delays, costs and impacts on the environment. This investigation will con-tinue into 2014.



Gaining Procurement Insights at Asia Pacific Iron OreOur Asia Pacific Iron Ore operations rely on a substantial number of other businesses to help in the production and transport of iron ore. Both Cliffs and our major contracting partners at these operations engage a broad range of local service providers.

In 2013, we hosted a workshop in Western Australia’s Southern Cross -- the town located closest to our mining operations -- to give local business owners insight into the opportunities that may exist for local businesses and the related procurement process. Also that year, we spent al-most $2.3 million with businesses located in this immediate local government area (Shire of Yilgarn) and an additional $900,000 on businesses in the wider Wheatbelt region. This spend continues to show our commitment to using local service providers.

Reduced Disposal of Hydrocarbon OilThrough collaboration with a key supplier to our U.S. Iron Ore operations, our used hydrocarbon oil is being repro-cessed, providing us with on-demand access to oil. This, in turn, allows us to reduce our inventory of oil, minimize oil waste volumes, maintain optimal oil quality and improve our operational efficiency.

Smaller Carbon Footprint by Using Compressed Natural GasGasoline-powered pickup trucks and vans have high fuel costs and significant carbon footprints, and produce harmful emissions. To help reduce our overall emissions, our Michi-gan operations developed a compressed natural gas (CNG) light duty vehicle program. CNG is produced domestically, safe, non-toxic, less environmentally harmful and offers the added benefits of reduced costs.

Working with our supply partners, our Michigan operations engineered, tested and installed specialized bi-fuel conver-sion systems to allow approximately 100 light duty vehicles to operate on both CNG and gasoline. They also installed a CNG fast-fueling station with fueling times that are compara-ble to gasoline.

As a result of this effort, we expect to achieve fuel savings that will reduce our operating costs by more than $500,000 annually and reduce fleet greenhouse gas emissions by between 20 percent and 30 percent.

Working with Local SuppliersWe are fully committed to developing relationships and supporting communities where we live and operate. This is demonstrated through our supplier selection process where we include criteria relating to the location of our vendors. In 2013, we also embarked on an initiative to identify where our diverse suppliers are located, allowing us to determine how much of our supplier spend is directed to local suppliers.

For our U.S. Iron Ore, Eastern Canadian Iron Ore and North American Coal operations, we define “local” as companies with a postal address within 100 miles of our operations; for our Asia Pacific Iron Ore operations, local is defined as within 50 miles. In 2013, 37 percent of our supplier spend for U.S. Iron Ore, Eastern Canadian Iron Ore and North American Coal operations went to local suppliers, while Asia Pacific Iron Ore had a 6 percent local spend. Globally, we spent 32 percent with local suppliers.

In 2013, we also created a baseline of spend from our U.S. Iron Ore and North American Coal operations going to cer-tified Small, Woman-Owned, and Minority-Owned Business-es.

Results of this supplier diversity initiative showed that we spend:

• 3.7 percent of all purchases with Small Businesses• 1.4 percent with Woman-Owned Businesses• percent with Minority-Owned Businesses

Our total supplier diversity spend was 5.0 percent, with some of our suppliers being a combination of Small, Woman-Owned and/or Minority Businesses.



Our customers are an essential part of our ongoing success. We strive to provide our customers with the best possible products from year to year.

Customer Satisfaction

Satisfying our customers is one of our Core Values. It is essential to our growth, sustainability and success as a company. Although we have no formal customer feedback survey in place to measure service quality, we regularly solicit our customers’ feedback through a number of chan-nels; including phone calls and on-location meetings. We also have a Quality Leadership Team that meets regularly to discuss process capability, product quality performance and product defects.

For our U.S. Iron Ore and Eastern Canadian Iron Ore oper-ations, we conduct formal face-to-face meetings annually, at our customers’ facilities and/or at ours. We also conduct formal quality review meetings with the majority of our coal customers. During these meetings, as well as the perfor-mance of our products in their processes, and seek to understand our customers’ current and future requirements. Although regular, our interactions with our customers at our Asia Pacific Iron Ore site are less formal.We meet regularly with our customers to ensure we un-derstand both our customers’ current and future needs. We document all input from our customers and feed items requiring action into our continuous improvement plan.

Evaluating Performance

To measure performance, we issue a certificate of analy-sis with each shipment. If we deviate from the customer’s specifications, we issue a Non-Conforming Cargo Report (NCR) to the customer, which describes the non-conformity, identifies the root cause, and outlines all actions taken to correct the problem and prevent a recurrence.

We track NCR occurrences by site and by customer using the ratio NCR/Million Tons Shipped (NCR/MTS). Each of our operations tracks compliance with internal specifications that align to our customer specifications. Sites then report the NCR/MTS rate to management on a monthly and year-to-date basis.

Our aim is to drive NCR/MTS to zero at all of our operations. Every year, we give each region a 10 percent target NCR reduction rate until each region reaches zero.

The following graphs represent the NCR/MTS reporting levels for our U.S. Iron Ore, Eastern Canadian Iron Ore and North American Coal operations in 2013, as compared to the previous three years. For our Asia Pacific Iron Ore oper-ations, we established new NCR limits in 2013.



In 2013, our U.S. Iron Ore and Eastern Canadian Iron Ore operations continued to improve performance and reduce the frequency of non-conforming cargoes.

Our North American Coal operations saw an increase in non-conforming cargo occurrences, primarily due to an increase in weather-related moisture defects, higher lev-els of ash at our Pinnacle and Oak Grove operations and higher levels of ash and sulphur at Cliffs Logan County Coal operation. Given recent plant upgrades and the expected impurity levels within our coal reserves, we anticipate that our coal operations will record a reduction in the frequency of non-conforming cargoes.

In 2014, we will seek to establish a more formal process for capturing the entire customer experience. This will include product quality, service quality, transportation and billing cycles. We will also continue to achieve lower NCR rates until we reach zero.

Direct Reduced Iron Investigation

There is growing interest in the United States from Electric Arc Furnace (EAF) operators to develop direct reduced iron and for pellet producers to serve this market. In 2013 we began investigating the feasibility of producing direct reduc-tion-grade pellets. The investigation reviewed our ability to produce a suitable product as well as the market potential for direct reduction-grade pellets and direct reduced iron. We will continue to study the opportunity further in 2014 to determine whether there is sufficient value in servicing this emerging market.



We recognize that our most valuable asset is our people. Their contributions on the job and in our commu-nities are vital to our sustained success. In 2013, Cliffs experienced a time of change, restraint and renewal as we shifted our attention to operational focus, strategic alignment and fiscal discipline.

Employment

As the employer of choice in many of the communities in which we operate, we understand the importance of mini-mizing employee turnover, maximizing retention, and recruit-ing talented people who have the necessary skills to excel in their role and work collaboratively with their colleagues.

Key Decisions in 2013

In 2013, we initiated a thoughtful and measured review of our organization to identify opportunities to reduce costs and increase efficiencies. This review was undertaken to ensure the Company’s competitiveness under different commodity cycles. This review led to difficult decisions that affected a number of our employees at the corporate and site levels. The resulting organizational structure is nimble

and streamlined and ensures our efforts are focused on value creation.

In all instances, we have sustained a commitment to acting fairly and respectfully. To assist our outgoing employees with this transition, we hired a third party to provide coun-seling and support. This included assisting them with their résumés, providing interview training, connecting them with recruiting agencies and working with them until they found other positions.

Given the challenges we have faced in 2013, in 2014 we plan on conducting an employee survey. This survey will ask our employees about their level of satisfaction with the orga-nization and the tools and initiatives we use to communicate



with them, and invite them to identify areas for improvement. This survey will serve as a baseline upon which we will com-pare future employee surveys, which we plan to conduct annually.

Workforce and Compensation

We continue to attract and retain intelligent and talented indi-viduals who believe in our Core Values. We offer competitive compensation and benefits packages, as well as training and development programs that focus on career develop-ment and engagement.

We employ a number of strategies to reward safety, eco-nomic and environmental performance. We review each incentive program annually to identify opportunities for im-provement, confirm alignment with our strategic objectives and ensure that we compensate our employees appropri-ately.

To minimize our gender salary gap, we use an established job evaluation system, as well as salary survey market data based on industry trends. We also review internal factors related to our employees’ specific job duties. This salary decision-making process is not unique to our Company, but reflects general standard methodology used in other organi-zations. In 2013, we continued to make progress in closing the gender gap at the management level.



Working with our Communities

We are proud of the employment opportunities we provide in our local communities. Although local applicants have a distinct advantage, our hiring process is designed to ensure that the most suitable applicant, based on qualifications and experience, will always be preferred. We deem candidates to be local if we do not have to relocate them for the posi-tion; we define significant operations as locations where we extract or process materials.

Another focus area for us in 2013 was to increase indige-nous workforce participation across our operations. At our Koolyanobbing operations, in 2013, indigenous workforce participation was 4.2%, which is above the industry average of 3.52%. We will continue to work pro-actively with key part-ners to implement indigenous workforce initiatives in 2014, such as improving our indigenous employee retention rate and providing cultural awareness training for our employees. Excluding our fly-in fly-out operations, based on employ-ee relocations, all of our operations’ senior management vacancies in 2013 were filled by individuals from one of our neighboring communities.

Apart from Asia Pacific Iron Ore, where the mining activities are performed by a third-party contractor, our employees undertake the majority of each operation’s work. We oper-ate 24/7 facilities and do not experience significant annual variations in employment numbers.

Benefits

Although packages may vary from region to region based on local laws and regulations, we provide the following ben-efits to all of our full-time employees:

• Medical, dental and vision coverage • Disability and life insurance • Pension plans • Flexible health spending account • Employee Assistance Program to address personal and

family issues • Education benefits such as educational reimbursement

and matching gifts • Professional membership reimbursement



Defined Benefit Plan Obligations

Cliffs offers defined benefit pension plans, defined contribu-tion pension plans and other post-retirement benefit plans (primarily consisting of retiree health care benefits) to most employees in North America as part of a total compensation and benefits program. For our Asia Pacific Iron Ore employ-ees, the benefits we provide exceed the minimum amount of superannuation. For more information on our benefit plan obligations in 2013, we encourage you to read our 10-K filing (Item 7). Health and Wellness

We recognize that providing a safe and healthy work envi-ronment improves our ability to recruit and retain high quality talent and our capacity for production. We provide our em-ployees and family members with the resources and tools to achieve and maintain a healthier lifestyle, which in turn pro-vides us with a healthier workforce. This includes a variety of wellness programs, ranging from health and ergonomic assessments, to online health management programs, smoking cessation programs and worksite wellness events. We encourage employees to participate in fitness and health management programs by providing several options.

In 2013:

• more than 1,500 employees took advantage of our fitness reimbursement program

• more than 3,000 employees participated in worksite wellness events

• more than 1,400 employees completed on-site biomet-ric screenings

In addition, employees and spouses who participated in the Mayo Clinic Health Assessment demonstrated improve-ments in alcohol, safety and emotional health risk factors.

Corporate and Duluth Wellness teams launch “Active for Life”In Minnesota, the corporate and Duluth wellness teams launched the “Active for Life” wellness challenge. Through our partnership with the American Cancer Society, more than 120 employees participated in a flexible, 10-week, team-based physical activity and nutrition program designed to promote regular and sustainable physical activity, health awareness and the maintenance of healthy behaviors.

Snow Day at Giants RidgeIn February 2013, United Taconite (UTAC) employees, family and friends enjoyed a great day of skiing, snowboarding and tubing at Giants Ridge, in Biwabik, Minnesota. The UTAC Snow Day event, organized by the UTAC wellness committee, promoted exercise and the benefits of enjoying the great outdoors.

National Bike ChallengeThe National Bike Challenge encourages biking for trans-portation, fitness and recreation. In Cleveland, Ohio, 21 employees participated in the 2013 Rust Belt Battle of the Bikes challenge. During the six-month challenge period, our employees rode an impressive total of 17,553 miles, equiva-lent to riding from New York to Los Angeles six times.



Labor Relations

At the corporate level, Cliffs has a labor relations team that reports into our Legal Department. Our unionized sites -- Pinnacle, Oak Grove, Wabush, Empire, Tilden, UTAC and Hibbing -- feature Human Resources representatives who possess experience in labor relations available to address questions or concerns onsite. As of December 31, 2013, collective bargaining agreements covered approximately

• 84.2 percent of our U.S. Iron Ore hourly employees• 99 percent of our Eastern Canadian Iron Ore hourly

employees• 66.3 percent of our North American Coal hourly employ-

ees

2013 Labor Agreements

In August 2013, we entered into a new three-year labor agreement with the United Steelworkers Union covering our

represented employees at Bloom Lake, which provides us with workforce flexibility.

In December 2013, we entered into a new six-year labor agreement with the United Steelworkers Union covering our represented employees at our Pointe Noire facility, which is part of our Wabush operations. We also obtained the United Steelworkers Union’s consent to an application we made to the Canadian Industrial Relations Board to have this work-force governed by Canadian federal labor law.

For more detailed information regarding the labor agree-ments at all of our unionized sites, please refer to our 10-K filing.

No Labor Unrest

As a result of our ongoing efforts to maintain good relations with our employees, we did not experience any strikes or lock-outs at any of our operations in 2013.

Training and Education

Our employee training, development and talent manage-ment approach delivers fair and consistent performance assessments, provides learning and development opportu-nities, identifies and nurtures high-potential individuals and ensures a solid succession plan.

In 2013, 100 percent of salaried employees across the organization completed their performance reviews using our

talent management system. In addition to performance, the system captures individual goals and objectives, and en-ables employees to track recent accomplishments, degrees, achievements and career aspirations.

Our Human Resources department uses this information to place people in roles that suit their skills and interests. The annual organizational talent review process also includes



managerial assessments which chart progress against ca-reer goals and offers recommendations for career advance-ment. We also use these assessments to identify candidates for our leadership development programs.

Training and Development Opportunities In 2013, we continued to implement our leadership training programs, as part of our commitment to helping our employ-ees advance their careers within our Company. In addition to our leadership development programs, we offer employee training opportunities to develop skills and careers in many areas, including safety, business improvement, leadership and business basics, maintenance and mining.

Cliffs CollegeCliffs College was launched in 2005, offering a training library of more than 375 courses to assist our employees with their professional development. We also offer access through Cliffs College to EduMine’s learning catalogue.

Available courses include

• Technical training• Safety• Environmental• Communications• Leadership• Team building • Problem solving• Mining-specific training

In 2013, we included our Code of Conduct, Cliffs Privacy Policy and IT End User program through Cliffs College. We update our library semi-annually, replacing approximately 100 courses each year.

EDGEExperience, Development & Growth for Engineers (EDGE) is a U.S. Iron Ore engineering rotation program designed to help high-potential engineers learn new skills while develop-ing new talent in the Company. The program offers partic-ipants three 12-month rotations at different U.S. Iron Ore mine sites where they engage in new experiences, develop-ment, and growth in disciplines within their academic field and beyond. There are currently four participants involved in the EDGE program, with two more expected to be added in 2014.

Financial Development ProgramThe Financial Development Program enables graduates to develop a broad understanding of our financial business. The program involves three 12-month rotations across a variety of corporate functions, including Accounting, Internal Audit, Tax and Treasury, as well as a rotation at one of our mine operations.

Program participants support corporate and business-line functions, gain insight on business models, and participate in reporting, management reviews and finance strategy sessions. In 2013, there were five participants involved in the Financial Development Program, with more participants expected to be added in 2014.

MentoringOur Mentoring Program was developed to increase employ-ee engagement and retention, meet employee development needs, and build relationships and understanding across functional groups and business units. The program is de-signed to benefit both the mentor and the mentee. To enroll in the program, mentor and mentee candidates submit a profile form to the Mentoring Program Coordina-tor, who matches learners’ developmental interests with mentors’ knowledge and experience. In 2013, many of our employees participated in the Mentoring Program.

Growing the BusinessGrowing the Business is a mandatory program for senior leaders and officers. This program focuses on building busi-ness acumen in the areas of operations, finance, strategy and global awareness. In 2013, 17 senior executives partici-pated in the program.

Leading the BusinessLeading the Business is comprised of five modules that build leadership and communications skills around our Core Values. In 2013, 628 employees globally participated in eight Leading the Business sessions for managers and supervi-sors.



Diversity and Inclusion

We recognize that organizations need both diversity and inclusion to be successful. What makes us unique defines diversity and we embrace the ways people can differ from one another. Inclusion puts diversity into action by creating an environment of respect and connection, where the rich-ness of ideas and perspectives from diverse backgrounds are harnessed to create business value.

Diversity & Inclusion Committee

Our Diversity & Inclusion Committee was established to de-velop plans, strategies, and initiatives to encourage a more diverse and inclusive environment. It also provides programs and resources that enhance the knowledge and under-standing of our diversity and inclusion principles across the organization. In 2013, the Diversity & Inclusion Committee is composed of our global leaders, representing Iron Ore, Coal, Shared Services and Corporate.

Cliffs Women Connect

Cliffs Women Connect (CWC) was established in 2013 as a component of our Diversity & Inclusion program. CWC’s mission is to advance Cliffs’ success by creating an envi-ronment that inspires, connects and empowers women to achieve their full leadership potential through professional development, mentoring, coaching, and networking. Events and meetings are held at the corporate and regional levels, offering regular opportunities for our female workforce to connect and develop.

During 2013, we also developed a regular spotlight fea-ture in our internal employee newsletter to promote greater awareness of culture and gender. These monthly spotlights covered a range of topics, including Indigenous people, Latino history, and celebrating gender.



At the core of each of our operations is a commitment to the communities where we live and work.

Our communities are important to us. As an employer of choice, we form an integral part of the fabric of the commu-nities in which we operate. We support our employees and their families, local businesses, schools, First Nations and other Aboriginal communities, as well as other community

groups so that they may have a higher quality of life and benefit from our activities. When we have to make difficult decisions, such as the ones we had to make in 2013, we engage the community to help us navigate change so that we can remain a sustainable presence for years to come.

Community Engagement

No two communities are the same. As such, our approach to engagement varies by operation to best address the challenges and opportunities facing each community. We demonstrate our support for local communities through our engagement, social investment and our decision-making strategies.

Approaching Engagement

Each operation or project has a methodical approach for engaging with communities and stakeholders. In addition to ad-hoc, site by site approach, Cliffs’ objectives are to stan-

dardize the stakeholder mapping and engagement process throughout the company.

Throughout the year, our Public Affairs representatives formally engage with the community and serve as the face of Cliffs. These Cliffs representatives sit on Chambers of Commerce boards at regional and local levels and partici-pate in discussions with government officials. Informally, em-ployees, including general managers, regularly participate in community activities; for example, we offer regular mine tours for students and the general public at our U.S. Iron Ore sites. If issues arise, the operations manager serves as the



primary point of contact and the first avenue of communi-cation, while the site’s general manager stays apprised of issues at all times. If the issue requires escalation, the Public Affairs representatives liaise with the community to help determine a solution.

Each operation’s team manages escalation and resolution on a case-by-case basis. For example, for our operations that abut our communities, our representatives will noti-fy affected local communities in advance of normal mine blasting operations. If local residents complain, one of our representatives will make house calls to assess the situation and resolve the issue directly.

Community Disputes

Many of our operations occur immediately adjacent to our communities. At times, some of our activities may inconve-nience our neighbors. To address any issues quickly and to the satisfaction of the community, we have public or com-munity relations specialists at each of our locations. These specialists develop relationships with the community and make themselves available to address concerns that arise.

Engagement: U.S. Operations At our United States operations, we currently do not have any formal mechanisms in place to assess community engagement effectiveness. Rather, we listen to communi-ty feedback and respond to concerns on a case by case basis.

For example, in 2013, members of the communities sur-rounding Michigan’s Empire Mine expressed concerns about the site’s anticipated closure at the end of 2014.

While considering contract sensitivities, we provided open and transparent communication, sharing as much detail as possible and making plans that are in the best interest of the communities and our employees, as well as our own operations. In early 2014, we announced that we would be extending Empire Mine’s operations until 2016. Our prepara-tions for the mine’s eventual closure will continue as will our communication and involvement in the community to ensure that we support everyone affected to the best of our ability through the transition.

Minnesota Highway 53 RealignmentHighway 53 between Duluth and International Falls is a ma-jor transportation corridor serving northeastern Minnesota.

Since 1960, some parts of Highway 53 have crossed land that we own. To continue our mining operations at United Taconite, we need to exercise our right to access the land. From the beginning, we have worked with the community, state and other stakeholders to assess options to relocate the road. We also worked with them to develop a strategic plan to communicate to all parties affected by the relocation.

Educational Partnership in MichiganFor 25 years, Cliffs has worked in partnership with four Mich-igan school districts. We meet monthly with representatives from the school districts to discuss their needs and poten-tial opportunities. We also host an Excellence in Education day that recognizes high-achieving students. This program has been in place so long that we are now seeing students whose parents were former participants in the program.

Corporate Work Study Program with St. Martin de Porres High SchoolFor the second consecutive year, we partnered with St. Mar-tin de Porres High School in Cleveland, Ohio, to establish a Corporate Work Study Program. The program enables stu-dents of modest economic means to afford a private college preparatory education that would otherwise be beyond their means. It also assists in ensuring that students are invested in their own development, strengthens their résumés and work ethic and provides positive role models and mentors. In return, we engage a dependable, eager team of students who participate in the work place one day a week. St. Martin de Porres High School assigned three students to Cliffs for the 2013 to 2014 school year. By participating in this pro-gram, we join more than 35 other local organizations that partner with St. Martins de Porres High School.

Engagement: Eastern Canadian Iron Ore

At our Eastern Canadian Iron Ore Bloom Lake operation, we continue to conduct the quarterly stakeholder and communi-ty forums that we initiated in 2012. The forums bring togeth-er local community partners, elected officials, education representatives, health care professionals, economic devel-opment leaders, non-governmental organizations and our management to discuss details of our operation and public concerns. The forums make us more aware of the communi-ty’s interests and concerns and give the community a direct line of communication with the Company.

In 2013, we presented project results, our contribution process and donations to organizations. We also participat-



ed in several discussions with stakeholders, such as area cabin owners and snowmobilers. Based on the outcomes of these quarterly forums, in 2013 we were able to initiate our first stakeholder mapping exercise. Launched initially as a pilot program, we expect to roll it out formally across the Company in 2014 as part of a sustainable mining reporting framework.

In addition to the stakeholder and community forums, man-agement is also involved in a diverse array of local boards and committees which allow us to better understand issues and opportunities in which Cliffs may engage.

Transparency at Pointe NoireIn September 2013, we experienced an oil spill at our Wabush Mines Pointe Noire facility in the Sept-Îles region of Quebec. Although we captured 99 percent of the released material on-site, we recognize the impact the remaining 1 percent had on the Bay of Sept-Îles. From the outset, we were committed to taking all the appropriate actions neces-sary to address the issue and remediate the affected area. In addition to the environmental impact activities as detailed later in this report, we also undertook regular and open communication with the relevant stakeholders, including environmental groups, elected officials, regional economic development representatives and community members. Al-though the incident was unfortunate, we have received very positive feedback from community leaders and residents on our handling of the event.

Engagement: Asia Pacific Iron Ore

At our Asia Pacific Iron Ore site we conduct formal commu-nity engagement assessments every two years. We also organize a community reference group that meets semi-an-nually. The group comprises members of the community,

non-government organizations and regulators, and is attended by the mine’s general manager and environmen-tal and community relations personnel. Initially created to address environmental issues, the group now discusses a broader range of topics. The general manager also attends regular council meetings.

APIO Communities Share their OpinionIn 2013, community residents surrounding our Asia Pacific Iron Ore mine completed our bi-annual survey. As part of the survey, we solicited feedback from the community of South-ern Cross, which is in close proximity to our Koolyanobbing mine operation, and the community of Esperance, where our iron ore is exported. In particular, community members were asked to comment, on how Cliffs manages the social and environmental impacts of our operations on their communi-ties.

The survey results revealed a 95 percent satisfaction rate with our efforts and demonstrated that 88 percent of the community has no issues about our activities in the area, up from 83 percent in 2011. After increased community engagement and a $9.9 million investment in road infra-structure in 2011, three of the highest ranking concerns in 2011 for Esperance residents -- traffic congestion, dust and noise associated with our port operations -- had significant reductions in the 2013 survey.



Social Investment

We make contributions to our communities locally through operations and corporate donations, as well as our charita-ble fund, The Cliffs Foundation. In 2013, we simplified the way we categorize our funding and giving streams. Funding streams now fall into two categories: our Cliffs Foundation Giving and Corporate Contributions, and Local Contri-butions, which included $572,145 in donations from our employees to United Way.

Our community investments are now categorized into three broad areas:

• Education • Healthy Communities • Vibrant Communities

Although we have experienced a revenue reduction over the last few years, our contributions continue to rise, reaching record levels in 2013. This result demonstrates our ongo-ing commitment to investing in the communities where we operate.

In addition to monetary contributions, we help to promote volunteer opportunities in the local communities in which we operate. Our employees have served as role models for Big Brothers and Big Sisters, participated in building Habitat for Humanity Homes, and donated their time serving meals and providing support at Ronald McDonald Houses.



The following represent just a few of the investments our Company and our employees have made in the communi-ties in which we operate.

Environmental ClassroomCliffs provided $30,000 in funding to support the devel-opment of an outdoor environmental classroom trail on a 12-acre parcel of land between Aspen Ridge Elementary School and Westwood High School in Michigan. This teaching facility -- which will include a trail, interpretive kiosks and a wetland overlook area -- will be utilized by stu-dents from both schools, as well as by students from other local school districts, to learn about the local environment.

Partnership with Northern Michigan UniversityWe provided mining equipment to Northern Michigan Uni-versity for their industrial maintenance program. Through this partnership, students gain the opportunity to learn skills on actual mining equipment, and we gain the opportunity to use the facility for training local employees.

Bricks and MortarThe Cliffs/Eagle Mine community fund in Michigan has partnered with the Lundin Mining Corporation in the state to develop a $4 million infrastructure fund that focuses on long-term sustainable brick and mortar projects and com-munity enhancement programs. To date, the partnership has donated $1.2 million to the community.

Local Food BanksMore than $64,000 in donations to local food banks resulted in approximately 138,000 meals to those in need within our communities. Contributions were made to food banks in: • Michigan (16,000 meals)• Minnesota (68,500 meals)• Cleveland (30,000 meals)• West Virginia (20,000 meals) • Eastern Canada (3,000 meals)

Room at the InnFor several years 12 churches of various denominations have been opening their doors to the homeless in Michi-gan, providing shelter and meals during the winter months, but they were in need of a permanent base. Through The Cliffs Foundation, we provided funds to assist with building renovations that will include showers facilities, a kitchen for

meal preparation and space for advocacy services to help the homeless find jobs and homes.

United WayIn North America, we support communities near our oper-ations through contributions to the United Way. Cliffs has been a long-time supporter of the United Way and conducts employee campaigns at most of our North American busi-ness locations. The United Way strives to make a difference by building communities where every family is healthy and financially stable and every child graduates from school.Each North American location conducts an annual cam-paign locally to which Cliffs typically provides a 50 percent match of the sum of employee pledges. Collectively, Cliffs and our employees pledged approximately $930,000(USD) to their local United Way in 2013.

United Way provides our employees an easy, efficient way in which to give back locally and address critical needs. United Way priorities, programming and administration differ from one community to the next. Although United Way is not able to isolate our donations to specific programs, these are just some examples of the impact our contributions have:

Birmingham, Alabama

• $4 provides transportation for a senior citizen to a medi-cal appointment (Positive Maturity)

• $60 provides day care for a homeless child for one month (YWCA Central Alabama)

• $615 provides guided employment for one month to a person with disabilities (Workshops Inc.)

Northeastern Minnesota

• $100 provides an infant with formula for one month (LSS Family Resource Center)

• $260 provides test strips for a diabetic patient for one year (Project Care)

• $520 provides scholarships for four low-income 8-14 year olds to attend a five-day camp session (Camp Chicagami)

Marquette County Michigan

• $62 provides a warm, safe, drug-free environment for a homeless man for one month (Janzen House)

• $336 provides youth (age 7-15) facing adversity with a caring adult through the Big Brothers and Big Sisters mentoring program for one year



• $673 provides a cancer patient with financial assistance for one year for cancer-related expenses such as medi-cations, co-pays, and travel for those being treated out of the area (Cancer Care of Marquette County)

Cleveland, Ohio

• $20 buys a visually impaired child a pair of Clip-on Spectacles (Cleveland Sight Center)

• $600 provides individual counselling for a survivor of do-mestic violence (Domestic Violence and Child Advocacy Center)

• $5,000 buys 100 specialized telephones for the hearing impaired (Cleveland Hearing and Speech Center)

Bloom Lake Development ProjectsIn Fermont, Quebec, we contributed to three large develop-ment projects in 2013:

Community CenterWe provided $250,000 in 2012 and $250,000 in 2013 to as-sist with the transformation of a local community center into space that meets the changing needs of the Fermont com-munity. With an occupancy of up to 400 people, the center will serve cultural and community events, and is expected to host up to 40 events each year.

Social HousingTo help address the limited housing opportunities in Fer-mont, we donated $100,000 to support the development of

12 housing units for low- and moderate-income households and for those with special housing needs.

Tourism DevelopmentWe contributed $50,000 to assist with development of tour-ism infrastructure in the Town of Fermont. This new building will help support the community’s objective to diversify its economy in the area of tourism.

Ore to Shore Car BashThe Cliffs Ore to Shore Car Bash saw community members in crazy cars and costumes take part in a 650km road trip from Cliffs’ Koolyanobbing mine site to Esperance, raising more than $100,000 for the Royal Flying Doctor Service. Street parades, fundraising balls and dinners were held at Cliffs’ local communities of Southern Cross and Esperance. Cliffs personnel teamed up with our major mining contractor BGC to staff a mining-themed vehicle. In total, the Ore to Shore Car Bash included 24 cars with 53 participants and volunteers.

Preserving Historic HousingIn June 2013, approximately 120 of our employees volun-teered at various work sites throughout Lakewood, Ohio, working in conjunction with Lakewood Alive, a group dedi-cated to preserving Lakewood’s historic housing. The vol-unteers undertook eight projects, including painting houses, enhancing a vacant lot, making repairs to historic properties, and building planter boxes.



Indigenous and Aboriginal

We respect Indigenous and Aboriginal peoples’ heritage and invest substantial effort to better understand their culture and perspectives. We proactively engage with and listen to Aboriginal communities through face-to-face meetings, facility tours and regular newsletters.

First Nation Engagement

When we advance developments in Canada within areas that affect Aboriginal communities, we seek to work collab-oratively so affected communities can benefit. We also seek to create opportunities to enhance the social well-being and economic prospects for these communities. Additionally, we support land-use planning initiatives that First Nations com-munities undertake, working with them to address associat-ed recommendations.

Bloom Lake Impact and Benefit AgreementAt our Bloom Lake operations in Quebec, we have estab-lished an Impact and Benefit Agreement (IBA) with the Innu community of Takuaikan Uashat Mak Mani-Utenam. This agreement covers a range of aspects including employ-ment, workplace, Innu business opportunities, protection of the environment and preservation and promotion of Innu Culture.

We work with the Innu Takuaikan Uashat mak Mani-Utenam community to build trusting working relationships. Together we have established a coordination committee, which has the primary responsibility for building and maintaining good relationships between all parties, along with achieving the agreement outcomes.

To promote and inform the Innu community on different aspects of our operations, we also support a member of the Innu nation who writes a monthly newsletter, published in Innu and French, that keeps the community apprised of Cliffs’ initiatives.

Bois Forte Tribal Representatives Visit Hibbing TaconiteIn September 2013, three representatives from the Bois Forte Band of Chippewa visited the Hibbing Taconite mine in Minnesota. The group toured the mine, plant, tailings basin and reclamation sites. They also visited the Hill of Three Waters, where three major watersheds diverge. The site was also used by Ojibwe Indians many years ago for council meetings prior to battle.

Recognizing the importance of this site, our Hibbing Taco-nite operation has left the area untouched. We also provide access to Native American tribal representatives when asked. The Bois Forte representatives performed some of their native rituals at the site and shared information about their culture with tour guides from Hibbing Taconite and Cliffs.

Land Disputes

In 2013, we did not experience any significant land disputes with Indigenous or Aboriginal communities.

Incidents Involving the Rights of Indigenous People

During 2013, we had no identified incidents of violations involving the rights of Indigenous peoples.



Public Policy

We play an active role in the development of laws, regulations and community initiatives that af-fect, or have the potential to affect, our Company and our stakeholders. We also contribute to the development of industry-wide public policy positions through involvement in the State, Provincial and Federal trade associations to which we belong.

Political Activity

As a Company, we do not endorse candidates for elected office. However, we do encourage our employees to par-ticipate in public affairs, get involved with volunteer efforts and contribute to the political party and candidates of their choice.

We may engage in political activities subject to all applica-ble laws and regulations. We conduct these activities with full regard for applicable campaign finance regulations and election laws. In the United States, we operate three non-partisan Political Action Committees (PACs), which are supported by voluntary contributions from our management and salaried employees as permitted under United States election law.

In 2013, our PACs contributed more than $32,000 to candi-dates for state and federal office:

• CliffsPAC contributed $16,800 to federal candidates • CliffsMichPAC contributed $13,000 to candidates for

Michigan state office • CliffsWVPAC contributed $2,500 to candidates for West

Virginia state office

Contributions in support of, or in opposition to, non-partisan referendum issues are permitted in states where not pro-hibited by law. In the province of Ontario, where corporate political contributions are permissible and widely accepted, we contributed more than $33,000 in 2013 to assist political candidates and parties.

For further information on Cliffs’ 2013 financial contributions regarding the support of political activities, please refer to the online resources below:

• Federal candidate contributions (CliffsPAC) • Michigan candidate contributions (CliffsMichPAC) • WV candidate contributions (CliffsWVPAC) • Ontario candidate contributions

Memberships and Associations

In 2013, our representatives sat on the boards of, or are oth-erwise active in, a number of industry associations including:

• Alabama Coal Association • American Iron and Steel Institute • Industrial Energy Consumers of America • Mining Association of Canada • Minnesota Iron Mining Association• National Mining Association • Quebec Mining Association • Ontario Mining Association • West Virginia Coal Association • Western Australian Chamber of Minerals and Energy

In addition to our industry representation, we support the following organizations or initiatives:

• Towards Sustainable Mining, the Mining Association of Canada’s commitment to responsible mining

• The Carbon Disclosure Project



Public Policy Matters

In 2013, we were actively engaged in a number of public policy matters.

Chromite Project in Northern OntarioAlthough we ultimately decided to indefinitely suspend the project, we made significant progress in 2013 with our Chromite Project. We advanced our feasibility study and strengthened relationships among Aboriginal communities and other stakeholders throughout Northern Ontario.Unfortunately, challenges surrounding the access and infra-structure that would allow us to move the chromite from the remote mine to existing road and rail infrastructure in Ontar-io’s Near North grew in prominence. The question of how to build infrastructure in the remote region became even more challenging following the unexpected and disappoint-ing decision of Ontario’s Mining and Lands Commissioner in September 2013 not to dispense with consent from a mineral-rights holder as part of an easement application that would have allowed for the construction of an all-weather road to the proposed site of the mine and concentrator.

Although other issues, including the delay in approval of the Terms of Reference for the Ontario Environmental Assess-ment process, contributed to our decision to suspend the Chromite Project in November 2013, the infrastructure and access issue remains a key obstacle to the Ring of Fire development.

The decision of the Ontario Mining and Lands Commission-er is currently scheduled for appeal in Ontario’s Divisional Court in June 2014. In the meantime, we continue to engage with First Nations and government partners on infrastructure development that will benefit both the project and commu-nities.

Mine Site ReclamationIn 2013, we worked with others in West Virginia’s coal industry to achieve passage of a new tax credit aimed at increasing voluntary reclamation of abandoned mine sites and reducing the burden of bond forfeiture sites on state funds. With the passage of this legislation, an active mining company that voluntarily remediates a site can apply to the West Virginia Tax Commission `for a credit against coal mine reclamation taxes.

The credit applies to mine sites where the state Department of Environmental Protection has revoked the bond from the previous operator, which means remediation would have

to be paid by the state’s Special Reclamation Fund and Special Reclamation Water Trust Fund into which all coal operators pay annual taxes.

Minnesota Tax PolicyWe maintain a significant operational footprint in the state of Minnesota, where we own and/or operate three large iron ore facilities. In 2013, the Minnesota legislature considered a host of tax and fiscal policy changes aimed at reducing a projected biennial budget deficit. In total, Minnesota’s min-ing industry faced proposals for increased taxes and fees totaling over $40 million per year.

In response to these proposed tax increases, we engaged with the Minnesota Iron Mining Association and fellow iron ore operating companies to educate state lawmakers on the types of taxes paid by the industry and to advocate in op-position to new taxes that would harm the competitiveness of the state’s iron ore industry. As a result of these efforts, lawmakers opted to drop the most onerous of the proposed tax and fee increases and instead pursue a five cent per ton ($2 million per year) increase in the state’s iron ore Production Tax to fund local school infrastructure projects in Northeast Minnesota. The state also established a new business-to-business sales tax on repair labor that was cost-ly to all business in the state and was subsequently repealed in early 2014.

While the Company’s lobbying efforts did not mitigate all 2013 tax increases borne by the Minnesota operations, efforts to engage public officials and related stakeholders fa-cilitated a more equitable outcome to this tax policy debate and preserved a competitive environment for future capital investment in our Minnesota facilities.

Quebec Mining Duty ReformsIn late 2012, the Quebec government announced its inten-tion to make substantial modifications to the Quebec mining royalties tax, known as the Quebec Mining Duty (QMD). The initial proposal advanced by the provincial government would have imposed substantial costs on our Eastern Canadian Iron Ore business unit. Furthermore, the initial QMD reform proposal would have failed to account for the substantial costs incurred by companies as a new mining operation is established or expanded.

In response to this proposal, our Government Relations personnel joined with the Quebec Mining Association and the Quebec Chamber of Commerce Federation to pursue an aggressive 2013 lobbying campaign to seek modification of



the QMD proposal and to mitigate negative impacts for the province’s mining industry.

Through direct engagement with Quebec’s Ministry of Natu-ral Resources, Ministry of Finance and the Premier’s office, we joined mining and general business interests in raising substantial concerns about the potential negative effects of the QMD proposal on capital investment and economic development in Quebec. These sustained collective efforts led provincial policymakers to modify the QMD proposal in a way that significantly reduces the adverse financial impact for our Company. The final QMD reform package, which was finalized in mid-2013, will appropriately account for the significant costs associated with operating capital-intensive iron ore facilities.

In this instance, our proactive engagement with public officials and allied business interests helped to prevent the implementation of provincial tax policy that would have sig-nificantly affected our business interests in Quebec.

Preserving our Markets: United States Export-Import Bank AdvocacyIn the global marketplace, we compete with other producers of raw material commodities for steelmaking, as well as oth-er companies for the capital needed to invest, operate and grow. In late 2012, we became aware of a troubling pattern whereby the United States Export-Import Bank (Ex-Im Bank) was providing publicly subsidized financing to support the development of new or expanded iron ore projects around the world.

Ex-Im Bank, which is the official export credit agency of the United States, operates as an independent federal agency. Its primary mission is to finance projects to expand exports of goods produced in the United States.

Its financial activities, however, are constrained by a con-gressionally- authorized Charter which prohibits the Bank from supporting projects that will adversely affect United States interests. In recent years, Ex-Im Bank has helped finance numerous iron ore projects pursued by our compet-itors in Canada, Australia and Ukraine. In total, Ex-Im Bank played a role in financing new iron ore production capacity totaling 124 million metric tons per year between 2011 and the end of 2013. This figure represents approximately 225 percent of annual United States iron ore production capacity.In early 2013, Ex-Im Bank publicly considered an application to provide over $650 million in financing to assist Austra-lian billionaire Gina Rinehart and her company, Hancock

Prospecting, in financing the 55 million metric ton per year (MMTPY) “Roy Hill” project in Western Australia. Ex-Im Bank transactions of this size are subject to an economic impact analysis process which allows interested parties to submit comments or concerns regarding the domestic economic impact of the proposed transaction. In response to the Roy Hill application, we engaged an independent economist to conduct an economic impact analysis of the effect the Roy Hill transaction would have on United States domestic iron ore producers. This analysis found that the Roy Hill project would cause United States iron ore producers to lose export sales valued at $589.6 million, while diminished global pric-ing would reduce domestic sales by $1.2 billion, for a total loss of nearly $1.8 billion in total sales over the proposed financing period. The analysis also found that the Roy Hill project would contribute to structural oversupply of iron ore when the tonnage is expected to come online.

In light of these findings, we asserted that the Roy Hill trans-action constituted a violation of Ex-Im Bank’s Charter, which prohibits assistance that adversely affects United States interests or contributes to a structural oversupply of a given commodity. The American Iron and Steel Institution, the United Steelworkers Union, the Iron Mining Association of Minnesota and a number of individual companies from the domestic iron and steel industry joined us in our opposition to this transaction. Members of the United States Congress from our constituent states of Michigan, Minnesota, West Virginia and Alabama joined industry and the labor commu-nity in expressing reservations about the economic impact of the proposed Roy Hill transaction.

Despite the well substantiated claims of net negative eco-nomic impacts and the potential for Roy Hill to contribute to a structural oversupply of iron ore, the Ex-Im Bank approved a $694 million direct loan to Roy Hill in December 2013. We are disappointed by this outcome. We view it as a failure of Ex-Im Bank to adequately protect the economic interests of established United States industries. This unfavorable out-come notwithstanding, we remain hopeful that the advocacy undertaken in response to Ex-Im Bank’s Roy Hill deal will lead the Bank to discontinue its unsustainable and damag-ing pattern of support for overseas iron ore projects on a going forward basis.



Environmental Stewardship is one of our Core Values. It is an ethic that embodies responsible planning and management of our resources.

We apply the same rigor to our environmental systems and performance as we do to safety, quality and profitability. Most importantly, we do not compromise our safety or our environmental practices for the sake of production. Our environmental policy highlights that our ethical, safe and environmentally responsible behaviors are the backbone of our business.

2013 Performance

One of our main priorities for 2013 was to improve our environmental performance throughout the business. We understand that continual improvement of our environmental performance is crucial to the preservation of our license to operate. In 2013, through the collective efforts of all opera-tions, we reduced the number of environmental incidents by 61 percent, and by more than 75 percent since the start of 2012, representing significant progress in our Road to Zero program for environmental incidents.

Highlights relating to our 2013 environmental performance included obtaining an organizational environmental Key Per-formance Indicator score that exceeded our stretch target, and reducing our spill volume by 16 percent year-over-year.

2014 Objectives

In 2014, we will be working to maintain this momentum and foster our cultural values to develop effective preventive sys-tems that drive these environmental incidents to zero. Our environmental objectives include:

• Achieving an environmental KPI target of 90 • Reducing all environmental incidents by a minimum 15

percent with no major reportable incidents • Reducing incident spill volume by 10 percent • Implementing company-wide environmental stewardship

initiatives to continue substantial environmental operat-ing performance improvement



• Assessing or piloting technologies to reduce environ-mental footprint with mercury, selenium and NOx control

• Proactively participating in regulatory and policy devel-opment for informed rulemaking

• Engaging continuously and transparently with stake-holder groups

Precautionary Approach

The precautionary principle suggests that if the consequenc-es of an action are unknown, but are judged to have some potential for major or irreversible negative consequences, then a lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation.

The precautionary principle has influenced our thinking. For example, we have employed this principle in determining the suitability of implementing company-wide environmental management processes relating to spills and the manage-ment of environmental incidents. In addition, we regularly and frequently assess and manage environmental, safety, supply chain, operational and other risks.

Environmental Initiatives

In 2013, we continued to make progress against the tar-get activities we identified in our three-year environmental strategic plan: implement the environmental components of the Towards Sustainable Mining (TSM) framework; achieve carbon emissions leadership; achieve water use leadership; improve biodiversity; and implement an Environmental Man-agement Systems (EMS). We also embarked on a three-year land management project for Asia Pacific Iron Ore.

Asia Pacific Iron Ore Land Management ProjectBetween 2010 and 2012 Asia Pacific Iron Ore partnered with the Western Australian Department of Environment and Conservation on a land management project to improve the information base and on-ground capacity to manage the natural environment in the Northern Yilgarn region of West-ern Australia. The project encompassed regional flora and fauna, bush fire management and Indigenous training and employment. Since its completion, this project has become widely recognized as a successful model for collaboration between industry, non-governmental organizations, Indige-nous communities and government and is a visible sign of our Environmental Stewardship Core Value in practice.A review of the project in 2013 confirmed that the proj-ect produced excellent outcomes and was successful in

achieving its objectives. Half of the Indigenous trainees who participated in the project are now employed full time with project partners. At the same time, participating stake-holders gained significant knowledge on the regional flora and fauna, which formed the basis of several papers. We also completed fire management strategies and significant progress was made in baiting and monitoring feral fauna, and conducting regional surveys for flora of conservation significance.

Based on its success, the project has been extended into a second phase from 2013 to 2015, which continues to focus on improving the knowledge of flora in the Yilgarn and feral fauna management. The scope of the project also now in-cludes restoring and re-establishing the rare plant Tetratheca paynterae, as well as research and monitoring of pit lakes in terms of their potential to support feral fauna.

Compliance with TSM FrameworkAs a member of the Mining Association of Canada, we have been working to comply with TSM protocols for our Canadi-an operations. The TSM protocols relate to:

• Aboriginal and Community Outreach• Crisis Communication• Safety and Health• Biodiversity Management• Energy and Greenhouse Gas Management• Tailings Management

In 2013, we completed the self-assessment process for each of the six protocols and made substantial progress in complying with each one. In 2014, we plan to complete further internal assessments and implement the activities necessary to achieve compliance.

EMS ImplementationProtecting the environment requires strong policies and ef-fective operating systems. We reinforce this commitment by implementing International Organization of Standardization (ISO) 14001 certified EMSs at many of our operations. Our EMSs identify relevant risks and implement metrics to mea-sure and manage our potential impact on the environment and our communities.

In 2013, we continued to develop our EMS for Eastern Cana-dian Iron Ore and build a more unified OneCliffs EMS frame-work, to allow us to have consistency across our operations.Leadership in Biodiversity



To assist in fulfilling our Mining Association of Canada obli-gations and to manage the risks regarding the loss of biodi-versity, we produced a three-year biodiversity strategy within the 2011 Sustainability Report. One of the strategy’s targets was to produce Biodiversity Management Plans (BMPs) for selected operations by 2014. These plans will assess poten-tial impacts/risks to biodiversity, identify specific biodiversity targets and create biodiversity conservation awareness.

In 2013, we finalized our biodiversity policy statement and implementation guide. We also prepared a priority species inventory at all Eastern Canadian Iron Ore facilities. In 2014, we plan to prepare a BMP for our Bloom Lake operation. We expect to complete BMPs for all remaining operations by 2015.

Carbon Emissions LeadershipAs more stakeholders place increasing emphasis on ad-dressing climate change, managing our carbon emissions effectively can strongly influence our economic performance and reputation in the marketplace. To assist our stakehold-ers in understanding our performance regarding our carbon emissions, we voluntarily report our annual emissions to the Carbon Disclosure Project (CDP). The initiative assists us to measure, manage, disclose and ultimately reduce our carbon emissions, and allows us to demonstrate how we comply with our Core Values.

In 2013, we continued to refine our CDP reporting. Read our CDP report @ https://www.cdproject.net/CDPResults/CDP-SP500-climate-report-2013.pdf.

In 2014, we plan to continue developing a carbon reduction strategy that will enable us to identify, measure and imple-ment carbon reduction opportunities.

Leadership in Water UseOur stakeholders’ increasing focus on addressing climate change reaches beyond carbon emissions, to include water use and discharge risks. In 2013, we undertook an assess-ment of the amount of data we currently possess regarding our water management, as well as the information we would need to report effectively on our water use. Given the gaps in our existing data and the resources required to obtain the data necessary to report effectively, we carefully weighed the benefits of reporting against our current need to focus on operational efficiency and financial discipline.

We have elected not to report our water use through CDP at this time. We will continue to periodically review this deci-

sion, with the awareness that we may report on our water use through the CDP in the future.

Other Focus AreasIn addition to the focus areas detailed above, we continued to devote attention to several other ongoing environmental issues. These included:

• Selenium management • Sulfate/wild rice water quality • Spill management • Conservation of flora and fauna • Energy and emissions management • Regional haze prevention

In 2014 and beyond, we will continue to develop our corpo-rate environmental management systems, develop strate-gies for air, water and energy, produce a biodiversity man-agement plan for Eastern Canadian Iron Ore and develop a hydrocarbon management strategy for North American Coal.



Environmental Compliance

Government agencies authorize our mining activities by issuing environmental permits. These permits define how the Company must comply with the applicable environmental regulations to protect human health and the environment. They also incorporate legal obligations and are essentially our permission to operate. Respecting these obligations is non-discretionary and necessary to preserve our stake-holder social license to operate. Without these permissions, there is no mining.

We have acquired hundreds of environmental permits throughout our operational and exploration portfolio that prescribe obligations relating to mining activities, infrastruc-ture such as tailings basins/dikes, and associated aspects related to air, water, waste and land management impacts. These permits can be hundreds of pages and create mil-lions of discrete compliance obligations over the course of a year.

Being compliant is the minimum standard; doing better than the minimum and going beyond compliance is the essence of our environmental stewardship Core Value and demonstrates social responsibility. To meet this challenge, we have implemented and continually improve our Interna-tional Organization of Standardization (ISO) 14001 certified Environmental Management Systems (EMS) as the manage-ment tool to facilitate improved environmental performance. Please see our prior year report for a list of our operations that are currently ISO 14001 certified.

Our EMS establishes procedures, assigns responsibility and includes monitoring to verify myriad compliance obliga-tions are being properly executed. It helps us anticipate and address potential impacts before they occur, which satisfies our permission to operate and preserves the environment for future generations.

Gauging Environmental Performance

We have embedded processes that detect environmental incidents. Incidents are one of our environmental key perfor-mance indicators and the primary metric we seek to improve through our Road to Zero journey. Environmental incidents include:

• Spills • Short-term parametric deviations for emission control

equipment, such as scrubber differential pressure or scrubber water flow rates

• Missed inspections or preventative maintenance tasks • Unauthorized discharges • Emission control equipment by-passes

We are making significant progress in reducing environmen-tal incidents. However, our stakeholders expectations related to our environmental performance are increasing, as are our own. In response, we are accelerating improvements to our management systems to further improve upon our environ-mental performance.

One example is our Road to Zero program in which we es-tablish corporate and operational objectives and targets to improve performance and reduce the likelihood of environ-mental impacts. Our efforts particularly focus on reducing the impacts associated with emissions and water intensity at our operations. These represent some of our stakeholders’ greatest concerns. In 2013, we made significant improve-ments to spill reduction, air and water compliance, which we describe throughout this report.

Through our various programs and initiatives, we will con-tinue in 2014 to further improve our performance in these areas.



Environmental Grievance Mechanisms

During 2013, there were no formal grievances attributed to alleged environmental impacts filed and/or resolved through the court systems.

Capital Expenditures

In 2013, we continued to make significant investments in the construction and operation of our operations to mitigate our impact on the environment. In 2014, we expect our expendi-tures related to environmental protection to focus on water treatment, air quality and dust control, selenium manage-ment and tailings management.

In total, for 2014, we plan to invest approximately:

• $25 million for projects at our Eastern Canadian Iron Ore operations

• $13 million for projects in our U.S. Iron Ore operations • $4 million in our North American Coal operations

Significant Fines and Sanctions

During 2013, we did not receive any non-monetary sanc-tions or penalties for alleged non-compliance with regional and local environmental laws and regulations.

We are currently being investigated by Environment Cana-da in relation to an alleged release of approximately 1,320 gallons of fuel oil into the Bay of Sept-Îles in September 1, 2013. Our response actions were able to successfully contain and capture a substantial amount of oil. We are cooperating with the investigators and agency response officials. For further information on this event, please go to Spill Management.



Development, Land Practices, Closure

Mine Development

The effort and time required to acquire a permit remains a key issue in mine development and planning. Proactively engaging with our community and regulatory stakeholders helps us to minimize any setbacks and reduce delays in project development, which can result in significant financial and reputational risk to any mining company.

Sustainable Land Practices

We understand that we need to minimize the environmental impacts of our mining operations and work with our stake-holders in advance as we develop new land resources. In 2013, our global operational footprint was 59,948 hectares. As we continue to develop new resources, we intend to reclaim land back to a state as natural as possible in order to minimize the impact our footprint has on the environment and our stakeholders.



Mine Closure/Idling

Closing our mine operations at the end of their useful life, or idling them for an indefinite period of time, can have a dramatic impact on the community. We begin working to mitigate the impact of our departure well before a mine is closed. We have mine closure plans in place for all of our operations. For some of our operations, we post the regu-lator-approved mine closure plan publicly to keep affected communities informed.

As part of our mine closure plans, we partner with the local communities to develop new opportunities for economic progress. We also develop training programs to strengthen the local economy in ways that can ease the transition of our employees to occupations in other industries.

A dynamic mine closure plan is an essential management tool to ensure mines are adequately rehabilitated upon closure in a cost effective manner. These plans ensure reha-bilitation is completed to an agreed standard to allow for an alternative land use or ownership.

Asia PacificIn late 2012, we provided draft mine closure plans for our Koolyanobbing, Mount Jackson, Deception and Windarling mines in Western Australia to interested stakeholders and agencies. The environmental objectives of these plans were to ensure that:

• Final landforms are safe, stable and non-erodible • Rehabilitated landforms are compatible with surround-

ing undisturbed areas and that the ecological value of rehabilitated areas is optimized by adopting best prac-tice rehabilitation techniques

• No persisting negative impacts to the surrounding biotic and abiotic environments exist

These plans addressed:

• closure obligations and commitments • existing rehabilitation and closure data• stakeholder consultation • post-mining land use • closure objectives • identification and management of closure issues • completion criteria • financial provisions • closure implementation • monitoring and maintenance • information management

The regulator approved the draft plans in early 2014. More detail is available in the “Asia Pacific Environmental Steward-ship” section of our website.

North AmericaAt our Empire Mine in Michigan, our operational sustainabili-ty efforts entailed preparing for the mine’s closure. Although we have extended operations at the Empire Mine until 2016, we will continue with our closure preparations to effectively manage the closure of the mine.

Please refer to the “2013 Highlights” section of this Report for information on the idling of our Wabush operations in Eastern Canada.



Water Management

As a global mining and natural resource company, we rely heavily on water. Our operating facilities use water in the processing of products and to control fugitive dust emissions. We withdraw water from both ground and surface sources. We understand the significant need and opportunity we have to protect this finite resource.

At our iron ore operations in Asia Pacific, saline groundwater provides most site water needs in the arid environment. At our North American and Asia Pacific Iron Ore operations, we withdraw large volumes of water from surface water sourc-es, groundwater sources and accumulated precipitation from the mining area. The dewatering from the mining area enables us to mine under dry conditions.

We withdrew a total of approximately 272 million cubic meters of water and discharged approximately 392 million cubic meters in 2013. The use of water is balanced with our commitment to ensuring the water we release into the environment does not negatively impact the watershed and water users in our communities.



Water conservation is an important component to our man-agement approach. We recognize that sustainable manage-

We collected data from our locations in cubic meters. For any totals not in cubic meters, we used the standard unit of

Data collected from our locations was measured either through direct measurement or estimation by source. We then converted discharge totals to cubic meters using stan-dard unit of measurement conversion factors.

Water inflow into our Oak Grove mine in Alabama increased in 2013. This increase is partly attributed to underground

mine sealing that required additional dewatering to prevent water buildup against the mine seals. This dewatering is both a regulatory and safety requirement. These combined activities also resulted in an increase of mine water being discharged to the surface at the Oak Grove mine.

measurement conversion factors to convert their native unit of measurement to cubic meters.

ment of our water resource is integral to our continued ability to operate in the communities that we serve.

Total Water Withdrawal by Source



Water Management in Action

Bloom Lake and Asia Pacific Water ManagementBloom Lake’s rapid growth since Cliffs acquired the opera-tion in 2010 placed a significant strain on water resources in the area. As part of our commitment to environmental stew-ardship, we invested in water management infrastructure to mitigate our impact on this valuable natural resource.

Since its acquisition, the majority of our water-related inci-dents have occurred at Bloom Lake, both in number and volume. Recently, we have invested significant capital to improve the water management at Lake Bloom. In 2013, we completed construction of most of the water management infrastructure required to assume responsible water stew-ardship and be more proactive in our water management at this site. As a result of our actions, we have been able to decrease our release volumes at our Bloom Lake operations by 91 percent between 2011 and 2013.

One of the outcomes of this work is that our freshwater consumption has reduced significantly due to our water recycling programs.

Following the success of our Bloom Lake water manage-ment initiatives, we intend to capitalize on lessons learned and transform them into concrete actions that will enable us to continually improve water management across this site.For our Asia Pacific Iron Ore operations, a substantial amount of water is used each year to reduce the levels of dust being emitted during the ore crushing and grinding process. In 2013, we undertook a water conservation project to identify the most appropriate way to suppress dust during the ore handling process. Following this investigation and several field trials, we relocated and reconfigured the ore handling plant’s spray nozzles, which delivered significant water consumption benefits. It is anticipated that this up-grade will reduce the ore handling plant’s dust suppression water usage by up to 40 percent.

Deer Lake Area of ConcernIn 2012, the last known controllable source of mercury in Deer Lake was removed. We have been working for several years with the City of Ishpeming (the City) in Michigan to address a creek that was entering historic mine workings under the City, picking up mercury and transferring it to Deer Lake. The creek had been redirected into the mine workings under an agreement between the City and Cliffs several de-cades ago to avoid the need for the costly repair of an aging storm sewer system.

Cliffs and Ishpeming worked together to identify alternatives that would prevent the creek from entering the mine work-ings, with the City successfully qualifying for funding from the Great Lakes Restoration Initiative to support the neces-sary storm sewer upgrades to redirect the water. The City augmented $8 million in federal funding with $700,000, and after several years of construction, the work has now been completed.

As part of the project, we provided a property easement that allowed the City to complete a natural channel design restoration of a portion of creek that had been previously realigned. We will now be working with local, state, and federal partners to delist Deer Lake as a federal Area of Concern in 2014.

Selenium Storm Water Management PlanAn important objective of our water resource management is protecting the water quality in the ecosystems that surround our mining operations. One issue that has gained increasing attention in recent years is the concentration of selenium in the streams and waterways surrounding our operations in Michigan and West Virginia, based on concerns that ele-vated selenium levels may affect the ecosystem. Though selenium occurs naturally, certain mining activities can also influence selenium levels.

In 2012, we implemented a selenium management strategy at our Pinnacle Mine facility in West Virginia. Since imple-menting this strategy, the facility has recorded no exceed-ances for selenium.

We implemented a similar plan at our Michigan operations. Activities included evaluating structural controls, non-struc-tural controls, site specific standards, and the potential impacts to groundwater. Preliminary selenium treatability results from studies performed in 2012 on the effectiveness of passive treatment systems were positive. We subsequent-ly installed a pilot treatment system during the third quarter of 2012 with good initial results.

The evaluation work continued and, in 2013, another system was installed. An initial estimate for full scale implementation of storm water treatment systems and structural selenium controls at both facilities is approximately $63 million. The results from the evaluation of existing pilot and demonstra-tion scale work will determine if these structural controls are used or whether other alternatives need to be considered.



Sulfate Wild Rice StandardSince 2009, the Minnesota Pollution Control Agency (MPCA) has begun applying the current sulfate wild rice water quality standard of 10 mg/L to water discharge related permits. This standard was based on observations from the Department of Natural Resources and reports from the 1940s on the maximum sulfate concentrations that existed where wild rice was found.

As an active member of the Minnesota Chamber of Com-merce Sulfate Wild Rice task force, we have been strongly advocating for a science-based wild rice water quality stan-dard to be implemented, rather than a standard that was largely based on observations. The task force supports the use of sound science to identify the sulfate concentration that is likely to have an adverse impact on wild rice.

In 2011, studies began to examine the effects sulfate has on wild rice plants. The studies concluded in 2013 with one area of research finding that sulfate itself does not appear to have any direct bearing on wild rice growth, although sulfate in the ranges of 1600 to 2500 mg/L starts to show effects on rice plants simply due to the salinity of the water. Other study work included a field survey of approximately 120 water bod-ies in Northern Minnesota to determine where rice naturally occurs and the associated sulfate content of the water. The study found there was no correlation between the levels of sulfate and wild rice growth.

As an active member of the Minnesota Chamber, we are supportive of the scientific peer review of the recent stud-ies being advocated for by the Chamber and that MPCA rulemaking process develops a standard based on this feedback.

Warner Creek Improvement ProjectIn May 2013, we announced the completion of the stream restoration and enhancement project at Warner Creek in Richmond Township, Michigan. The project is related to the discovery of historical tailings that had settled at the bottom of the creek bed. Cliffs and the State of Michigan worked in cooperation to complete the removal of the tailings and enhancement of the habitat in Warner Creek.

The Warner Creek improvement project began with the removal of tailings from 1,200 feet of channel. Using natural channel design principles, an engineered plan was devel-oped to install in-stream habitat features such as gravel runs and riffles that mimic features found in other areas of Warner Creek. The stream features installed for this project provide additional spawning habitat for brook trout, aquatic insect habitat and deep water pools, while providing stream channel stability. These improvements should also provide added recreational opportunities to the fishing public.

The Michigan Department of Environmental Quality has acknowledged that the project was a great success. The project occurred during subzero temperatures and winter conditions to minimize the environmental impacts the con-struction work may have had on adjacent wetlands.

Water Efficiency Award for APIOIn Western Australia, businesses annually using over 20 million liters of utility-supplied water must complete a Water Efficiency Management Plan (WEMP) and submit an annual report on their progress to the water regulator. Our water efficiency program measures our water usage on site and identifies inefficiencies and potential water savings. For the 2012-2013 period, we received a bronze award for achiev-ing between a 10 and 25 percent improvement in our water efficiency.



Biodiversity Management

We recognize the importance of a robust biodiversity program to help us better understand and mitigate our potential impacts. In addition to mitigating our potential impacts on the ecosystem, we proactively look to protect the natural area from other non-mining related disturbances.

Biodiversity Strategy

To assist in fulfilling our Mining Association of Canada obligations and to manage the risk regarding loss of biodi-versity, in our 2011 Sustainability Report, we published our three-year biodiversity strategy. One of the strategy’s targets was to produce biodiversity management plans (BMPs) for selected operations by 2014. These plans will:

• Assess potential impacts/risks to biodiversity • Identify specific biodiversity targets • Create biodiversity conservation awareness

In 2013, we finalized our biodiversity policy statement and implementation guide. We also prepared a priority species inventory at all Eastern Canadian Iron Ore facilities. In 2014, we plan to prepare a BMP for our Bloom Lake operation. We expect to complete BMPs for all remaining operations by 2015. These plans will address the need for species specific management plans based on scale of impact; sensitivity of area; local community use of biodiversity; ecosystems ser-vices provided by the local government; cultural relevance; protected status and risks assessments.

A BMP has been prepared and maintained at our Asia Pa-cific Iron Ore Operations, and can be reviewed in the “Asia Pacific Environmental Stewardship” section of our website.

Habitat Protection and Restoration

In 2013, we restored, created or protected habitats at a number of locations near our U.S., Eastern Canadian and Asia Pacific operations.

Compensating for Habitat at the Wabush Scully MineThe Scully Mine pit and mill operations are located to the west of the town of Wabush, between Long Lake and Jean Lake, in Labrador. Years of tailings discharging into the des-ignated tailings impound area has caused the water levels to rise. As a result, a 34.5 hectare area has lost wetland habitat.

The previous mine owner compensated for the lake and habitat loss when it constructed an extension of Loon Lake in 2010. The river habitat loss was calculated and was com-pensated for by the construction of an equivalent amount of habitat in 2012.

In 2013, we constructed additional wetlands areas adjacent to our 2012 project to compensate for the loss of habitat from the Hay Lake outlet. Due to their close proximity and frequent presence of water flow in the area, the constructed riverine habitat channels are now collectively named Gosline Brook. We are very proud of our wetland projects and that the compensation projects are now home to a multitude of species, including fish, waterfowl, animals and vegetation.

Malleefowl ManagementMalleefowl are birds that build mound nests and are en-dangered in Australia due to habitat destruction and pred-atory pressures. At our Asia Pacific Iron Ore operations, we implement management measures that help protect this important bird species, including feral fauna monitoring and control programs.

In 2013, we continued to undertake Malleefowl mound mon-itoring to help determine the health of the population near our Mount Jackson mine operations. The monitoring identi-



fied that of the 151 mounds monitored, 31 were considered active during the previous breeding season.

Restoring Fish Habitat in Coal CountryThe Buffalo Creek Watershed Association (BCWA) is an organization formed to restore, preserve and establish fish habitat. The BCWA applied for and received two grants totaling $600,000 from the West Virginia Department of Environmental Protection. These funds were allocated to the planning, engineering and construction of structures to restore a 16.1 mile area of the Buffalo Creek and improve fish habitat.

To assist BCWA in their efforts to restore fish habitat, we donated rock from our Toney Fork surface mine, while the Cliffs Foundation provided $40,000 in funding to transport the rock to usage points along the creek. Restoration of this fish habitat was completed in July 2013. In addition, we also supported the BCWA Fish Day, which distributed fishing gear and tackle to more than 125 elementary school chil-dren for a day of trout fishing along the creek.

Restoring Wetlands at Hibbing TaconiteAlthough our objective is to reduce our impact on the envi-ronment, occasionally our activities unavoidably affect wet-lands. These impacts result from activities such as stripping of surface material, stockpiling of surface and waste rock, and creating and maintaining tailing basins. To mitigate the loss of ecological value, we restore or create wetlands.

At our Hibbing Taconite operation, we identified the oppor-tunity to create and restore wetland areas to provide the local wildlife within a protected setting. Hibbing Taconite’s environmental department is leading this effort by partnering with Delta Waterfowl. One partnership program currently being carried out is the construction of hen houses on Hib-bing’s property to increase waterfowl habitat in the wetland. More than 385 nest structures have been implemented across the Iron Range in Minnesota.

In addition to the installation of hen houses, every three years we work with the Minnesota Department of Natural Re-sources to engage in a goose banding event. This banding is used by conservationists to help trace Canadian Geese population movements.

Threatened FloraAs reported previously, two rare flora species exist adjacent to the Windarling Mine at our Asia Pacific Iron Ore opera-tions. As both plants -- Tetratheca paynterae (T. paynterae) and Ricinocarpos brevis (R. brevis) -- are in close proximity to our operations, we have undertaken a substantial pro-gram of research and management to ensure the ongoing viability of both species. This program will help limit the overall impact our mining operations have on these flora species.

Monitoring of both species undertaken during 2013 demon-strated stable populations and comparable plant health. As in previous years, monitoring included monthly and annual monitoring of the T. paynterae and R. brevis populations on the Windarling ridge. The collection of plant condition and dust data demonstrates that there is no discernible correlation between recorded dust levels and plant health, with rainfall appearing to be the main factor influencing plant condition.

Ricinocarpos brevisIn addition to the population monitoring, we also continued with several other R. brevis-related investigations such as the R. brevis seed trial and the adult plant translocation project.

In 2013, the Western Australian Botanic Gardens and Park Authority continued their five-year research project with the aim of better understanding the needs of R. brevis in order to develop sustainable populations at Windarling. Work conducted in 2013 found:

• Optimal germination temperature was around 20°C• More germination occurred in constant darkness than

alternating light/dark• Seeds emerge from 1 to 13 cm soil depth• Fresh seeds possess a seed dormancy• Lowest germination rate after storage occurred at -18°C,

which aligns with current best practice for seed storage• No cuttings survived longer than 3 months• Soils found on waste rock dumps and where R. brevis

occurs naturally are not significantly different; however, rock size does differ significantly



Energy and Emissions

The mining industry is energy-intensive and produces significant emissions in the extraction and processing of our product. Approximately 25 to 30 percent of our operational costs are energy-related.

In 2013, in response to the changes we are making to improve operational efficiency and long-term sustainability, we are placing added emphasis on energy efficiency and reduced emissions. We continue to explore operational improvements to reduce emissions and energy consump-tion which, in turn, reduces our environmental footprint and drives down operating costs.

Each of our operations has its own modeling tools to under-stand the energy impacts at their sites. At a corporate level

our Energy Management Group meets quarterly to share information and leading practices that all of our operations can leverage.

Energy Management

In 2013, our total indirect energy purchased and consumed was 17.72 million gigajoules. Non-renewable energy sourc-es included electricity; renewable sources included hydro-electricity from our Eastern Canadian Iron Ore locations. To determine our indirect energy consumption, we collected indirect energy data from each of our locations. Data includ-ed non-renewable and renewable energy purchased and produced.



In 2013, our total direct energy consumption was 45.51 mil-lion gigajoules, which is comparable our total direct energy consumption for 2012.

The total amount of direct and indirect energy consumed by the company in 2013 was 63.26 million gigajoules.

Where operations did not report data in gigajoules, we used the standard unit of measurement conversion factors to convert their native unit of measurement to gigajoules.

Energy EfficiencyWe constantly explore opportunities to improve our op-erating efficiency to save energy, reduce emissions and decrease operating expenses. In 2013, we invested more than $13M to implement 17 energy reduction projects at our U.S. Iron Ore operations. These efforts resulted in savings of more than 200,000 gigajoules annually and are estimated to reduce our annual greenhouse gas emissions by more than 45,000 metric tonnes CO2e . Our Eastern Canadian Iron Ore and North American Coal operations were not included in this year’s calculations.

Our 2014-2016 Sustainability Strategy identifies the need to develop an energy reduction strategy, which will include tar-get setting and tracking of energy and emission reductions.Linking energy targets to operational performance and re-muneration will demonstrate to our stakeholders that we are committed to improving our energy efficiency and reduce waste, as well as reducing our operating costs.

To achieve these objectives, we will form a cross-function-al energy efficiency committee in 2014 to develop energy related goals and targets, and establish and monitor energy reduction projects. The committee will be responsible for im-

proving the energy efficiency of the business and ensuring the implementation of effective cost saving projects.

Greenhouse Gas Emissions Strategy

We are committed to establishing and implementing a com-prehensive emissions strategy to mitigate the risks associat-ed with climate change impacts.

Our Greenhouse Gas Emissions Strategy includes:

• Migrating to cleaner fuels • Implementing energy efficiency projects • Reducing our coal mine methane emissions

Greenhouse Gas Emissions Reduction

As an energy intensive business, our greenhouse gas emissions inventory captures a broad range of emissions sources. These include iron ore furnaces and kilns, coal thermal driers, diesel-powered mining equipment and a wholly-owned power plant.

In 2013, both our direct and indirect greenhouse gas emis-sions increased by a total of nearly 7 percent. This increase is attributed to the increases observed in direct greenhouse gas emissions at our coal operations, influenced by:



An increase of the Global Warming Potential (GWP) of meth-ane from 21 to 25. This GWP increase contributed approxi-mately half of the overall year-over-year increase, rather than an actual increase in the volume of methane being released

• Higher concentrations of methane contained in under-ground areas mined during this period

• An increase in volumes of methane being vented • An increase in process capacity

Although our overall direct and indirect greenhouse gas emissions increased, our iron ore operations decreased its global greenhouse gas emissions by 1.6%, with 75% of our operations recording a reduction in CO2 emissions be-tween 2012 and 2013. In 2014, we will continue to focus on reducing our greenhouse gas emissions and improving the efficiency of our operations.

*Emissions were calculated based upon converting the direct or

indirect energy for sites that we financially control from their native unit

of measurement to gigajoules then using standard emission factors by

geographical region and standard global warming potentials to get the

CO2 emissions.

Cliffs Achieves North American Milestone

In October 2013, for the first time in North America, the Port of Sept-Îles loaded a Chinamax bulk vessel with 300,000 metric tons of iron ore concentrate from our Bloom Lake operation. This first shipment was destined for one of our Asia-based customers.

The use of these new vessels is consistent with Cliffs’ Core Values of environmental stewardship and operational effi-ciencies. With technology and a loading capacity of more

than 300,000 metric tons, these larger vessels allow for a reduction in greenhouse gas emissions, as well as maritime traffic overall. At the same time, they enable us to enhance our competitiveness within the global iron ore market.

Rail Fuel Usage Reduction

We are always looking for opportunities to be more efficient. At our Michigan operations, over the last five years, we have been investigating our rail movement habits to identify ways to reduce our fuel usage, while increasing the amount of iron ore being railed.

• In 2008, we used 931,554 gallons of fuel and moved 7.9M tons of pellets at a rate of 8.57 tons per gallon

• In 2013, we used 751,861 gallons of fuel and moved 9.5M tons of pellets at a rate of 12.73 tons per gallon, an increase of over 4 tons per gallon

This improved efficiency is a result of a number of initiatives such as reducing unnecessary idling, which has resulted in an estimated annual gain of 0.5 ton per gallon, and using more fuel efficient locomotives.

In addition to increasing in the number of tons being railed per gallon by 40 percent, our rail fuel usage reduction strategy has accordingly decreased our operating expenses and our energy-related air emissions. Using railroad-based emission standards, between 2008 and 2013, we decreased our annual NOx emissions by 48 tons, while particulate mat-ter (PM) has been reduced from 5.8 tons to 4.7 tons.

Air Emissions [G4-EN21]

The United States Environmental Protection Agency (EPA) Regional Haze program was established decades ago by the Clean Air Act to improve and return visibility to natural background at Federal National Parks and Wilderness Areas by 2064. We fully support the goal of minimizing pollutants that cause regional haze in our United States Class 1 parks and wilderness areas, and remain committed to ensuring that improvements can occur without increasing other emis-sions or causing dramatic increases in fuel consumption.

At this relatively early stage of the program, the EPA is ad-dressing Best Available Retrofit Technology (BART), the cur-rent regulatory mechanism that limits and reduces regional haze pollutants. During the first BART review, Minnesota and Michigan proposed State Implementation Plans (SIPs) to ensure progress is made towards the 2064 goal. Although



both States presented SIPs that aligned with the 2064 goal, the EPA decided in February 2013 to establish a separate Federal Implementation Plan (FIP) for the taconite industry.We are currently in discussions with the EPA regarding the FIP requirements. We are conducting detailed engineering analysis to determine the impact the regulations may have on each furnace affected by the Regional Haze FIP, the results of which will guide further dialogue with EPA.

Our objective, as part of our air emissions management plan, is to implement technologies that meet the EPA’s nitrogen oxide (NOx) and sulfur dioxide (SO2) limits set out in the FIP by 2017. Other focus areas in our air emissions management strategy include reducing NOx emissions from rock blasting activities and reducing mercury air emissions.

Mercury Reduction

To address the United States Clean Water Act’s Total Max-imum Daily Load (TMDL) requirements and Minnesota’s Mercury TDML Implementation Plan, the taconite industry, in cooperation with the Minnesota Pollution Control Agency (MPCA), developed a Taconite Mercury Reduction Strategy and signed a volunteer agreement to abide by its terms.

The strategy includes a 75 percent target reduction of mer-cury air emissions from Minnesota pellet plants collectively by 2025. Because there is currently no available technology to reduce mercury emissions from taconite furnaces, the agreement lays out a plan to research the issue and de-termine opportunities to develop mercury emission control technology. Any developed technology must be economi-cally feasible, must not impact pellet quality, and must not cause excessive corrosion in pellet furnaces, associated duct work and existing wet scrubbers on the furnaces. According to the voluntary agreement, the mines proceeded with medium- and long-term testing of possible technolo-gies.

We have partnered with other taconite companies to re-search mercury removal technologies. There is currently no proven technology to reduce mercury emissions from taconite furnaces. The taconite industry partnered with the Minnesota Pollution Control Agency and the Minnesota

Department of Natural Resources to secure $1.6 million to pursue mercury emission reduction research, which was conducted between 2011 and 2013.. Upon completion of the testing, the taconite industry determined that injection of powered activated carbon (PAC) into the furnace waste gas stream showed the most promise for technically and economically feasible mercury reduction. Unfortunately, fur-ther testing demonstrated that the mercury reduction did not meet the state’s reduction target. More refined engineering is necessary to understand the capability of PAC.

In late 2013, the taconite industry learned that GORE technology for mercury removal had become commercially available for the utility industry. GORE is a passive technol-ogy that consists of stainless steel modules with numerous sheets of specialized fabric. High rates of mercury capture have been demonstrated during tests at power plants, and plans are underway with GORE representatives to test the technology at three taconite plants during 2014. If GORE proves successful, additional testing at other plants is likely to be conducted during 2015.

Late in 2013, Minnesota also published a draft mercury control rule for the state that would require annual mercury emissions reporting and could require that we install mer-cury emission control equipment on all of our Minnesota facilities. This may include installation of emission control equipment on Northshore’s Silver Bay Power Plant by Jan-



uary 1, 2018 to achieve a 70 percent reduction of mercury emissions. The rule as proposed would formalize elements of the voluntary agreement and mandate a 72% reduction in mercury from industrial furnaces.

Energy and Emissions Reporting We annually report our energy usage and carbon-related emissions to a range of organizations and government agencies, including:

• United States Environmental Protection Agency • Australian Department of Climate Change • Australian Department of Sustainability, Environment,

Water, Population and Communities • Environment Canada • The Carbon Disclosure Project • The Climate Registry (United States operations only)

A detailed discussion of regulatory, physical and other cli-mate change risks and opportunities is included in our 2013 response to the Carbon Disclosure Project (CDP) Investor Request. Our greenhouse gas reporting assessment score improved to a value of 72C, which was a significant improve-ment over our 2012 score of 37. See the detailed CDP S&P 500 Climate Change Report 2013 on the Carbon Disclosure Project’s website.

Spill Management

Our stakeholders expect that we implement leading spill response techniques. When a reportable spill occurs, we use a root cause analysis tool to identify the cause and determine appropriate corrective and preventive actions. In addition, we have standardized both definitions and data measurement for more accurate reporting and analysis. We capture and evaluate spill data monthly to identify further spill reduction opportunities.

As discussed in Water Management, the volume and num-ber of spills has increased since we acquired the Bloom Lake operation in 2010. The spills at Bloom Lake primarily relate to the non-containment of post-winter stormwater, with more than two-thirds of the total volume spilled in 2013 being associated with ice melt containment. Following sub-stantial capital investment in recent years, our performance in spill management at our Bloom Lake operation continues to improve.

In 2013, we had a total of 607 incidents involving spills equating to approximately 29,000 cubic meters (7.7 million gallons) across our operations; a reduction of almost 16 percent spill volume compared to 2012.

None of the 2013 spill incidents were significant enough to report in our financial statements.



Improving Dock Spill Response at Michigan Operations

Historically, we have relied on third-party spill response teams to assist in surface water spill containment and recov-ery activities at our Michigan operations, potentially resulting in delayed response times. In 2013, we significantly im-proved spill response capabilities at the Marquette dock with the purchase of an 18-foot aluminum response vessel with a fully-equipped spill response trailer. This improves our

spill response capabilities on Lake Superior. Our employ-ees, in cooperation with local agencies, have participated in simulated spill response training exercises. Meanwhile, we have also worked with the United States Coast Guard and emergency responders to improve spill response capabili-ties for the community.



Oil Spill Response at Pointe Noire

In September 2013, we experienced an uncontrolled release of 1320 gallons of fuel oil into the Bay of Sept-Îles near our Pointe Noire facilities in Quebec. Although we captured 99 percent of the released material onsite in a retention dike, from which we could pump and safely store the material, we continue to work to reduce the impact the remaining 1 percent had on the Bay of Sept-Îles.

Under Cliffs leadership, in collaboration with the Société d’intervention maritime Est du Canada, and in agreement with the Quebec Ministry of Sustainable Development, En-vironment, Wildlife and Parks (MSDEWP) and Environment Canada, we implemented the following actions to contain the product and rehabilitate the affected zones as effectively as possible:

• Deployed more than 20 boats to contain and recover oil in the Bay

• Deployed nearly 300 personnel, including our employ-ees and sub-contractors in the Bay and along the coast line

• Launched nearly seven kilometers of floating dikes and a large quantity of absorbent material to limit the disper-sion of product

• Employed cannons to keep birds away from the affect-ed zones

• Worked in collaboration with the MSDEWP and Environ-ment Canada to protect the potentially sensitive areas close to our facilities, including having MSDEWP repre-sentatives on-site during the entire response

• Maintained close communication with Environment Can-ada, the Department of Fisheries and Oceans, Focus Wildlife and bird specialists, representatives of which were onsite to assist with management of any potential impact to fish or wildlife

• Conducted two helicopter inspection tours daily above the Bay and established inspections sequences for remote sections over the islands, as well as along the beaches up to the Moisie River

We have been able to quickly complete the first two phases of rehabilitation, allowing the area to experience a full growth season and for the monitoring phase to be initiated earlier than expected. Our priority remains the rehabilitation of the affected areas as quickly, safely and effectively as possible. We will continue to ensure that we address all government authorities’ recommendations to rehabilitate the affected areas, and will continue to share all data related to the recuperation and rehabilitation to the Minister of Sustainable Development, Environment, Wildlife and Parks (MDDEFP), available on the Ministry’s website.



Waste Management

We have recycling programs at all of our mine sites where local facilities are available. This extends to industrial re-cycling, reuse and sustainable handling efforts around our various product lines. Based on information provided by our waste disposal contractors, we recycled 5,442 metric tonnes of waste in 2013.

When recycling is not an option, we store or dispose of the waste in an environmentally responsible way in accordance with applicable regulations.

Ruggies Recycling at Asia Pacific Iron Ore

In 2012, our Asia Pacific Iron Ore operation began working with the Ruggies Recycling Program. Ruggies works with companies in Western Australia to develop waste recycling programs and share profits between the Western Australian Princess Margaret Children’s Hospital and the Royal Flying Doctor Service. Fifty percent of the proceeds generated through our recycling efforts of such materials as cardboard, paper, aluminum, and plastic and glass bottles are donated, achieving a $3000 donation in 2013.

At our Asia Pacific Iron Ore operations, over 40 tonnes of cardboard was recycled in 2013, along with

• 1.6 tonnes of aluminum cans • 6.17 tonnes of glass • 2.63 tonnes of plastic • 85 kilograms of batteries • 98 kilograms of printer cartridges • More than 2,000 tires.

The recycling program has created a more sustainable mine site by reducing waste going into landfill as well as providing benefit to sick children and medical care to remote Austra-lians. This effort would not be possible without the assis-tance of our onsite contractors ESS and BGC.



G4-1Locations: Introduction, 2013 HighlightsProvide a statement from the most senior decision-maker of the organization about the relevance of sustainability to the organization and the organization’s strategy for addressing sustainability.

The statement should present the overall vision and strategy for the short term, medium term, and long term, particularly with regard to managing the significant economic, envi-ronmental and social impacts that the organization causes and contributes to, or the impacts that can be linked to its activities as a result of relationships with others (such as suppliers, people or organizations in local communities).

The statement should include:

• Strategic priorities and key topics for the short and me-dium term with regard to sustainability, including respect for internationally recognized standards and how such standards relate to long term organizational strategy and success

• Broader trends (such as macroeconomic or political) affecting the organization and influencing sustainability priorities

• Key events, achievements, and failures during the re-porting period

• Views on performance with respect to targets • Outlook on the organization’s main challenges and

targets for the next year and goals for the coming 3–5

years • Other items pertaining to the organization’s strategic

approach

G4-2Location: 2013 HighlightsProvide a description of key impacts, risks, and opportuni-ties.

The organization should provide two concise narrative sec-tions on key impacts, risks, and opportunities.

Section One should focus on the organization’s key impacts on sustainability and effects on stakeholders, including rights as defined by national laws and relevant internationally recognized standards. This should take into account the range of reasonable expectations and interests of the orga-nization’s stakeholders.

This section should include:

• A description of the significant economic, environmental and social impacts of the organization, and associated challenges and opportunities. This includes the effect on stakeholders’ rights as defined by national laws and the expectations in internationally recognized standards and norms.

• An explanation of the approach to prioritizing these chal-lenges and opportunities



• Key conclusions about progress in addressing these topics and related performance in the reporting period. This includes an assessment of reasons for underperfor-mance or over-performance.

• A description of the main processes in place to address performance and relevant changes

Section Two should focus on the impact of sustainability trends, risks, and opportunities on the long-term prospects and financial performance of the organization. This should concentrate specifically on information relevant to financial stakeholders or that could become so in the future.

Section Two should include the following:

• A description of the most important risks and oppor-tunities for the organization arising from sustainability trends.

• Prioritization of key sustainability topics as risks and opportunities according to their relevance for long-term organizational strategy, competitive position, qualitative and (if possible) quantitative financial value drivers.

Table(s) summarizing:

• Targets, performance against targets, and lessons learned for the current reporting period.

• Targets for the next reporting period and medium term objectives and goals (that is, 3–5 years) related to key risks and opportunities.

• Concise description of governance mechanisms in place specifically to manage these risks and opportuni-ties, and identification of other related risks and oppor-tunities.

G4-3Location: Our CompanyReport the name of the organization.

G4-4Location: Our CompanyReport the primary brands, products, and services.

G4-5Location: Our CompanyReport the location of the organization´s headquarters.

G4-6Location: Our CompanyReport the number of countries where the organization oper-

ates, and names of countries where either the organization has significant operations or that are specifically relevant to the sustainability topics covered in the report.

G4-7Location: Our CompanyReport the nature of ownership and legal form.

G4-8Location: Our CompanyReport the markets served (including geographic break-down, sectors served, and types of customers and benefi-ciaries).

G4-9Location: 2013 HighlightsReport the scale of the organization, including:

• Total number of employees. • Total number of operations. • Net sales (for private sector organizations) or net reve-

nues (for public sector organizations). • Total capitalization broken down in terms of debt and

equity (for private sector organizations). • Quantity of products or services provided.• In addition to the above, organizations are encouraged

to provide additional relevant information, such as:• Total assets • Beneficial ownership (including identity and percentage

of ownership of largest shareholders) • Breakdowns by country or region of the following: • Sales and revenues by countries or regions that make

up 5% or more of total revenues • Costs by countries or regions that make up 5% or more

of total costs • Employees

G4-10Location: EmploymentReport the total number of employees by employment con-tract and gender.

Report the total number of permanent employees by em-ployment type and gender.

Report the total workforce by employees and supervised workers and by gender.

Report the total workforce by region and gender.



Report whether a substantial portion of the organization’s work is performed by workers who are legally recognized as self-employed, or by individuals other than employees or supervised workers, including employees and supervised employees of contractors.

Report any significant variations in employment numbers (such as seasonal variations in employment in the tourism oragricultural industries).

G4-11Location: Labor RelationsReport the percentage of total employees covered by collec-tive bargaining agreements.

G4-12Location: Supply ChainDescribe the organization’s supply chain.

G4-13Location: 2013 HighlightsReport any significant changes during the reporting period regarding the organization’s size, structure, ownership, or its supply chain.

G4-14Location: Precautionary ApproachReport whether and how the precautionary approach or principle is addressed by the organization.

G4-15Location: Memberships and AssociationsList externally developed economic, environmental and social charters, principles, or other initiatives to which the organization subscribes or which it endorses.

G4-16Location: Memberships and AssociationsList memberships of associations (such as industry associ-ations) and national or international advocacy organizations in which the organization:

• Holds a position on the governance body. • Participates in projects or committees. • Provides substantive funding beyond routine member-

ship dues. • Views membership as strategic.

G4-17Location: Report ProfileList all entities included in the organization’s consolidated financial statements or equivalent documents. Report whether any entity included in the organization’s consolidated financial statements or equivalent documents is not covered by the report.

G4-18Location: Materiality and Reporting BoundaryExplain the process for defining the report content and the Aspect Boundaries.

Explain how the organization has implemented the Report-ing Principles for Defining Report Content.

G4-19Location: Materiality and Reporting BoundaryList all the material Aspects identified in the process for defining report content

G4-20Location: Materiality and Reporting BoundaryFor each material Aspect, report the Aspect Boundary within the organization, as follows:

• Report whether the Aspect is material within the organi-zation

• If the Aspect is not material for all entities within the organization (as described in G4-17), select one of the following two approaches and report either: The list of entities or groups of entities included in G4-17 for which the Aspect is not material or the list of entities or groups of entities included in G4-17 for which the Aspects is material

• Report any specific limitation regarding the Aspect Boundary within the organization

G4-21Location: Materiality and Reporting BoundaryFor each material Aspect, report the Aspect Boundary out-side the organization, as follows:

• Report whether the Aspect is material outside of the organization.

• If the Aspect is material outside of the organization, identify the entities, groups of entities or elements for which the Aspect is material. In addition, describe the



geographical location where the Aspect is material for the entities identified.

• Report any specific limitation regarding the Aspect Boundary outside the organization.

G4-22Location: Report ProfileReport the effect of any restatements of information provid-ed in previous reports, and the reasons for such restate-ments.

G4-23Location: Materiality and Reporting BoundaryReport significant changes from previous reporting periods in the Scope and Aspect Boundaries.

G4-24Location: Stakeholder ConsultationProvide a list of stakeholder groups engaged by the organi-zation.

G4-25Location: Stakeholder ConsultationReport the basis for identification and selection of stakehold-ers with whom to engage.

G4-26Location: Stakeholder ConsultationReport the organization’s approach to stakeholder engage-ment, including frequency of engagement by type and by stakeholder group, and an indication of whether any of the engagement was undertaken specifically as part of the report preparation process.

G4-27Location: Stakeholder ConsultationReport key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting. Report the stakeholder groups that raised each of the key topics and concerns.

G4-28Location: Report ProfileReporting period (such as fiscal or calendar year) for infor-mation provided.

G4-29Location: Report ProfileDate of most recent previous report (if any).

G4-30Location: Report ProfileReporting cycle (such as annual, biennial).

G4-31Location: Sustainability Reporting GuidelinesProvide the contact point for questions regarding the report or its contents.

G4-32Location: Sustainability Reporting GuidelinesReport the ‘in accordance’ option the organization has chosen.

Report the GRI Content Index for the chosen option. Report the reference to the External Assurance Report, if the report has been externally assured.

GRI recommends the use of external assurance but it is not a requirement to be ‘in accordance’ with the Guidelines.

G4-33Location: Sustainability Reporting GuidelinesReport the organization’s policy and current practice with regard to seeking external assurance for the report:

• If not included in the assurance report accompanying the sustainability report, report the scope and basis of any external assurance provided.

• Report the relationship between the organization and the assurance providers.

• Report whether the highest governance body or senior executives are in involved in seeking assurance for the organization’s sustainability report.

G4-34Location: Governance and Executive Structures and PoliciesReport the governance structure of the organization, includ-ing committees of the highest governance body. Identify any committees responsible for decision-making on economic, environmental and social impacts.



G4-38Location: Governance and Executive Structures and PoliciesReport the composition of the highest governance body and its committees by: • Executive or non-executive • Independence • Tenure on the governance body • Number of each individual’s other significant positions

and commitments, and the nature of the commitments • Gender • Membership of under-represented social groups • Competences relating to economic, environmental and

social impacts • Stakeholder representation• Competences relating to economic, environmental and

social impacts

G4-56Location: Code of Business Conduct and Ethics, Core ValuesDescribe the organization’s values, principles, standards and norms of behavior such as codes of conduct and codes of ethics.

G4-EC1Location: Economic PerformanceDirect economic value generated and distributed.

G4-EC3Location: EmploymentCoverage of the organization’s defined benefit plan obliga-tions.

G4-EC6Location: EmploymentProportion of senior management hired from the local com-munity at significant locations of operation.

G4-EC8Location: 2013 Supply Chain Strategy, Employee Training OpportunitiesSignificant indirect economic impacts, including the extent of impacts.

G4-EN3Location: Energy and EmissionsEnergy consumption inside of the organization.

G4-EN6Location: Energy and EmissionsReduction of energy consumption.

G4-EN8Location: Water ManagementTotal water withdrawal by source.

G4-EN13Location: Water ManagementHabitats protected or restored.

G4-EN15Location: Energy and EmissionsDirect greenhouse gas (GHG) emissions (Scope 1).

G4-EN16Location: Energy and EmissionsEnergy indirect greenhouse gas (GHG) emissions (Scope 2).

G4-EN21Location: Air EmissionsNOx, SOx, and other significant air emissions.

G4-EN24Location: Spill ManagementTotal number and volume of significant spills.

G4-EN29Location: Significant Fines and SanctionsMonetary value of significant fines and total number of non-monetary sanctions for non-compliance withenvironmental laws and regulations.

G4-EN31Location: Capital Expenditures for Environmental ProtectionTotal environmental protection expenditures and investments by type.

G4-EN34Location: Environmental ComplianceNumber of grievances about environmental impacts filed, addressed, and resolved through formal grievance mecha-nism.



MM1Location: Mine Development, Sustainable Land Practices and ClosureAmount of land (owned or leased, and managed for produc-tion activities or extractive use) disturbed or rehabilitated.

MM2Location: Biodiversity ManagementThe number and percentage of total sites identified as re-quiring biodiversity management plans according to stated criteria, and the number (percentage) of those sites with plans in place.

MM4Location: Labor RelationsNumber of strikes and lock-outs exceeding one week’s duration, by country.

G4-LA1Location: EmploymentTotal number and rates of employee hires and employee turnover by age group, gender and region.

G4-LA2Location: EmploymentBenefits provided to full-time employees that are not pro-vided to temporary or part-time employees, by significant locations of operation.

G4-LA5Location: SafetyPercentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs.

G4-LA6Location: SafetyType of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities, by region and by gender.

G4-LA8Location: SafetyHealth and safety topics covered in formal agreements with trade unions.

G4-LA11Location: Community EngagementPercentage of employees receiving regular performance and career development reviews, by gender and by employee category.

G4-SO1Location: Training and EducationPercentage of operations with implemented local commu-nity engagement, impact assessments and development programs.

MM6Location: Community Disputes, Indigenous and Aboriginal CommunitiesNumber and description of significant disputes relating to land use, customary rights of local communities and Indige-nous Peoples.

MM7Location: Community Engagement, Indigenous and Aborigi-nal CommunitiesThe extent to which grievance mechanisms were used to re-solve disputes relating to land use, customary rights of local communities and Indigenous Peoples, and the outcomes.

GA-SO6Location: Public PolicyTotal value of political contributions by country and recipient/beneficiary.

GA-SO7Location: Fair CompetitionTotal number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes.

G4-PR5 Location: Customer SatisfactionResults of surveys measuring customer satisfaction.

MM10 Location: Mine Development, Sustainable Land Practices and ClosureNumber and percentage of operations with closure plans.

G4-HR8 Location: Indigenous and Aboriginal CommunitiesTotal number of incidents of violations involving rights of indigenous people and actions taken.

Cliffs Natural Resources Inc.200 Public Square, Suite 3300

Cleveland, OH 44114cliffsnaturalresources.com

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