2011 ANNUAL REPORT CLIFFS l 2011 ANNUAL REPORT CLIFFS NATURAL RESOURCES INC. Cliffs Natural Resources Inc. is an international mining and natural resources company. A member of the S&P 500 Index, the Company is a major global iron ore producer and a signifi cant producer of high- and low-volatile metallurgical coal. Cliffs’ strategy is to continually achieve greater scale and diversifi cation in the mining industry through a focus on serving the world’s largest and fastest growing steel markets. Driven by the core values of social, environmental and capital stewardship, Cliffs associates across the globe endeavor to provide all stakeholders operating and fi nancial transparency. The Company is organized through a global commercial group responsible for sales and delivery of Cliffs products and a global operations group responsible for the production of the minerals the Company markets. Cliffs operates iron ore and coal mines in North America and two iron ore mining complexes in Western Australia. The Company also has a 45% economic interest in a coking and thermal coal mine in Queensland, Australia. In addition, Cliffs has a major chromite project, in the pre-feasibility stage of development, located in Ontario, Canada. GLOBAL OPERATIONS Iron Ore Chromite Coal Offi ces 6 14 11 2 12 15 13 20 1 10 7 18 19 8 5 4 9 3 17 16 Iron Ore Coal No. Country Mine Ownership No. Country Mine Ownership 1 United States Empire 79% 7 United States Pinnacle Complex 100% Tilden 85% Powellton 100% Hibbing 23% Chilton-Dingess 100% Northshore 100% Toney Fork No. 2 100% United Taconite 100% 8 United States Oak Grove 100% 2 Canada Wabush 100% Bloom Lake 75% 9 Australia Sonoma 45% 3 Australia Koolyanobbing 100% Offi ces 4 Australia Cockatoo Island 50% No. Country City 10 United States Cleveland 5 Brazil Amapá 30% 11 United States Duluth 12 United States Ishpeming Chromite 13 Canada Montreal No. Country Property Ownership 14 Canada Thunder Bay 15 Canada Toronto 6 Canada Black Thor 100% 16 Australia Perth Black Label 100% 17 Chile Santiago Big Daddy 72% 18 China Beijing 19 Japan Tokyo 20 Mongolia Ulaanbaatar UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2011 OR ‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number: 1-8944 CLIFFS CLIFFS NATURAL RESOURCES INC. (Exact Name of Registrant as Specified in Its Charter) Ohio 34-1464672 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 200 Public Square, Cleveland, Ohio 44114-2315 (Address of Principal Executive Offices) (Zip Code) Registrant’s Telephone Number, Including Area Code: (216) 694-5700 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange on Which Registered Common Shares, par value $0.125 per share New York Stock Exchange and Professional Segment of NYSE Euronext Paris Securities registered pursuant to Section 12(g) of the Act: NONE Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES È NO ‘ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES ‘ NO È Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES È NO ‘ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES È NO ‘ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ‘ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Large accelerated filer È Accelerated filer ‘ Non-accelerated filer ‘ Smaller reporting company ‘ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ‘ NO È As of June 30, 2011, the aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant, based on the closing price of $92.45 per share as reported on the New York Stock Exchange — Composite Index, was $13,430,571,403 (excluded from this figure is the voting stock beneficially owned by the registrant’s officers and directors). The number of shares outstanding of the registrant’s Common Shares, par value $0.125 per share, was 142,013,534 as of February 13, 2012. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s proxy statement for its annual meeting of shareholders scheduled to be held on May 8, 2012 are incorporated by reference into Part III. TABLE OF CONTENTS Page No. Definitions ......................................................................... 2 Part I Item 1. Business .............................................................. 5 Item 1A. Risk Factors ........................................................... 25 Item 1B. Unresolved Staff Comments .............................................. 35 Item 2. Properties ............................................................. 35 Item 3. Legal Proceedings ...................................................... 47 Item 4. Mine Safety Disclosures ................................................. 48 Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities .......................................... 49 Item 6. Selected Financial Data .................................................. 51 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations .......................................................... 53 Item 7A. Quantitative and Qualitative Disclosures About Market Risk .................... 94 Item 8. Financial Statements and Supplementary Data ................................ 95 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure .......................................................... 183 Item 9A. Controls and Procedures ................................................. 183 Item 9B. Other Information ...................................................... 184 Part III Item 10. Directors, Executive Officers and Corporate Governance ....................... 185 Item 11. Executive Compensation ................................................. 185 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters .................................................. 185 Item 13. Certain Relationships and Related Transactions, and Director Independence ........ 187 Item 14. Principal Accountant Fees and Services ..................................... 187 Part IV Item 15. Exhibits and Financial Statement Schedules ................................. 188 Signatures ......................................................................... 189 Definitions The following abbreviations or acronyms are used in the text. References in this report to the “Company,” “we,” “us,” “our” and “Cliffs” are to Cliffs Natural Resources Inc. and subsidiaries, collectively. References to “A$” or “AUD” refer to Australian currency, “C$” to Canadian currency and “$” to United States currency. Abbreviation or acronym Term Algoma Essar Steel Algoma Inc. Amapá Anglo Ferrous Amapá Mineração Ltda. and Anglo Ferrous Logística Amapá Ltda. Anglo Anglo American plc APBO Accumulated Postretirement Benefit Obligation ArcelorMittal ArcelorMittal (as the parent company of ArcelorMittal Mines Canada, ArcelorMittal USA and ArcelorMittal Dofasco, as well as, many other subsidiaries) ArcelorMittal USA ArcelorMittal USA LLC (including many of its North American affiliates, subsidiaries and representatives. References to ArcelorMittal USA comprise all such relationships unless a specific ArcelorMittal USA entity is referenced) ASC Accounting Standards Codification AusQuest AusQuest Limited BART Best Available Retrofit Technology BHP BHP Billiton Bloom Lake Bloom Lake Iron Ore Mine Limited Partnership BNSF Burlington Northern Santa Fe, LLC CAC Cliffs Australia Coal Pty Ltd. CAWO Cliffs Australian Washplant Operations Pty Ltd CERCLA Comprehensive Environmental Response, Compensation and Liability Act C.F.R. Cost and Freight C.I.F. Cost, Insurance and Freight CLCC Cliffs Logan County Coal LLC Clean Water Act Federal Water Pollution Control Act Cliffs Erie Cliffs Erie LLC CN Canadian Railway Company Cockatoo Island Cockatoo Island Joint Venture Compensation Committee