764065--2/29/2008--CLEVELAND_CLIFFS

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If the rate of steel consumption slows globally, it could lead to excess global capacity, increasing competition within the steel industry and increased imports into the United States, potentially lowering the demand for iron ore and coal. Capacity expansions within the industry could lead to lower global iron ore and coal prices or impact our production. If steelmakers use methods other than blast furnace production to produce steel, or if their blast furnaces shut down or otherwise reduce production, the demand for our iron ore and coal products may decrease. A substantial majority of our sales are made under term supply agreements, which are important to the stability and profitability of our operations. In North America, we depend on a limited number of customers. Mine closures entail substantial costs, and if we close one or more of our mines sooner than anticipated, our results of operations and financial condition may be significantly and adversely affected. We rely on estimates of our recoverable reserves, which is complex due to geological characteristics of the properties and the number of assumptions made. A defect in the title or the loss of a leasehold interest in certain property could limit our ability to mine our reserves or result in significant unanticipated costs. We rely on our joint venture partners in our mines to meet their payment obligations. Our expenditures for postretirement benefit and pension obligations could be materially higher than we have predicted if our underlying assumptions prove to be incorrect, if there are mine closures or our joint venture partners fail to perform their obligations that relate to employee pension plans. Equipment and supply shortages may impact our production. Our sales and competitive position depend on the ability to transport our products to our customers at competitive rates and in a timely manner. Our operating expenses could increase significantly if the price of electrical power, fuel or other energy sources increases. Natural disasters, weather conditions, disruption of energy, unanticipated geological conditions, equipment failures, and other unexpected events may lead our customers, our suppliers, or our facilities to curtail production or shut down their operations. We are subject to extensive governmental regulation, which imposes, and will continue to impose, significant costs and liabilities on us, and future regulation could increase those costs and liabilities or limit our ability to produce iron ore and coal products. Underground mining is subject to increased safety regulation and may require us to incur additional cost. Coal mining is complex due to geological characteristics of the region. Our profitability could be negatively affected if we fail to maintain satisfactory labor relations. We may encounter labor shortages for critical operational positions, which could affect our ability to produce iron ore products. Our profitability could be affected by the failure of outside contractors to perform. Our failure to maintain effective internal control over financial reporting may not allow us to accurately report our financial results, which could cause our financial statements to become materially misleading and adversely affect the trading price of our common shares. We may be unable to successfully identify, acquire and integrate strategic acquisition candidates. We are subject to risks involving operations in multiple countries. We are subject to a variety of market risks.

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764065--2/29/2008--CLEVELAND_CLIFFS_INC