Jessica Moran - Director of Investor Relations Joseph A. Carrabba - Chairman, Chief Executive Officer and President Laurie Brlas - Chief Financial Officer and Executive Vice President of Finance & Administration

Sohail Tharani - Goldman Sachs Group Inc., Research Division Arun S. Viswanathan - Longbow Research LLC Anthony Robson - BMO Capital Markets Canada Shneur Z. Gershuni - UBS Investment Bank, Research Division Jorge M. Beristain - Deutsche Bank AG, Research Division Jonathan Sullivan - Citigroup Inc, Research Division Kuni M. Chen - CRT Capital Group LLC, Research Division Mitesh Thakkar - FBR Capital Markets & Co., Research Division Timothy P. Hayes - Davenport & Company, LLC, Research Division Steve Bristo - RBC Capital Markets, LLC, Research Division

Good morning. My name is Tyrone, and I'm your conference facilitator today. I would like to welcome everyone to Cliffs Natural Resources 2012 Second Quarter Conference Call. [Operator Instructions] At this time, I would like to introduce Jessica Moran, Director of Investor Relations. Ms. Moran, please begin.

Thanks, Tyrone. I'd like to welcome everyone to this morning's call. Before we get started, let me remind you that certain comments made on today's call will include predicative statements that are intended to be made as forward-looking within the Safe Harbor protections of the Private Securities Litigation Reform Act of 1995. Although the company believes that its forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties that could cause actual results to differ materially. Important factors that could cause results to differ materially are set forth in reports on Form 10-K and 10-Q and news releases filed with the SEC, which are available on our website. Today's conference call is also available and being broadcast at cliffsnaturalresources.com. At the conclusion of the call, it will be archived on the website and available for replay. Joining me today are Cliffs' Chairman, President and Chief Executive Officer, Joseph Carrabba; and Executive Vice President, Finance and Administration, and Chief Financial Officer, Laurie Brlas. At this time, I'll turn the call over to Joe for his initial remarks. Joseph A. Carrabba: Thanks, Jess, and thanks to everyone for joining us this morning. As you're well aware, over the past several years, an underlining component of our strategy has been to gain scale by increasing access to the seaborne market. While this increased exposure to seaborne pricing may result in greater pricing volatility for our core assets, we believe it also provides the potential to generate significant value for shareholders. By continuing to build scale and focusing on improving our cash cost profile in Eastern Canada, we believe the decisions we are making today will position our operations for long-term reliability and profitability. That being said, when compared to the prior year's period, we have increased our year-to-date global iron ore sales volume by 23%. This was driven by our strategic acquisition of Bloom Lake Mine and our expansion project at Koolyanobbing mine. The increased volumes within these 2 assets provided more exposure to seaborne pricing, which decreased 20% from 2011's comparable quarter. The average Platts price for the second quarter was $141 versus $177 per ton in last year's comparable quarter. Despite the decrease in seaborne pricing, China produced at an annualized rate of approximately 726 million tons of crude steel in June. We believe China's recent slowing growth rate to just under 8% is temporary. With easing inflation, the government has already taken bold steps to bolster growth that we expect to see take hold in the back half of this year. While China's weakening exports to Europe are concerning, steel production remains strong and the country continues to encourage fixed capital investment. China ultimately remains biased toward growth. The continued need to urbanize its large rural population will remain the primary catalyst to accomplish this objective. In Europe, unfortunately, many mills are operating at rates well below capacity, continuing to range between 60% and 70%. While Europe's lower rates have a minimal impact on our iron ore sales volume, it unfavorably impacts the spot pricing for seaborne iron ore products delivered to China. Producers that would traditionally ship to European mills are most likely diverting vessels into the Chinese market. Any uptick in Europe's steelmaking utilization rates would most likely create tighter supply within the seaborne iron ore market, which would further support iron ore pricing. Now turning to the performance of our core businesses during the quarter. U.S. Iron Ore sales volume was 5.4 million tons, supported by an average North America steelmaking utilization rate of 79%, up from 75% in the prior year's comparable quarter. During the quarter, we began our previously announced planned production curtailment at Empire Mine. We anticipate resuming Empire's production at normal capacity in the fourth quarter. As you may have seen, Minnesota experienced a significant amount of rainfall this summer, which resulted in severe flooding in several areas. While the flooding has not materially affected our operations to date, we did lose a few days of production at our Northshore Mine. Outside of our operations, the flooding directly impacted some of the rail service providers we use to receive raw materials and deliver finished goods. Since the flooding, we have had an ongoing dialogue with the rail service providers and we continue to assess the impact any additional rainfall and related flooding could have on our operations. Also during the quarter, one of our U.S. Iron Ore customers filed for bankruptcy. We have been successful in placing this customer's 2012 nominated tonnage with customers in the Great Lakes and in the seaborne market. For the full year, we anticipate selling approximately 1.4 million tons volume from the lower Great Lakes into the seaborne market. During the quarter, we exported nearly 300,000 tons of U.S. pellets through the St. Lawrence Seaway and into the seaborne market. Eastern Canadian Iron Ore sales volume for the quarter was 2.4 million tons. This was made up of approximately 1.4 million tons of iron ore concentrate from Bloom Lake and 900,000 tons of pellets from Wabush. During the quarter, we made a strategic decision to begin production of a premium, higher grade iron ore concentrate product from Bloom Lake. The new product will contain a lower silica level of 4.5%. This compares to the mine's previous concentrate product, which contained a 5.5% silica level. This lower silica premium grade product is expected to attract new customers outside of China, further diversifying Bloom Lake's customer base. During the quarter, we continued to deliver trial cargoes of Bloom Lake's ore to new customers in Japan, South Korea and Europe. The process of adjusting the concentrator flow sheet to produce this lower silica product impacts the overall iron ore recovery rate, which reduces the mine's production volume. The production of this premium product partially contributes to reducing Bloom Lake's overall expected annual production volume to 7 point million tons, from our previous expectation of 8 million tons. Additionally, the lower annualized run rate is expected to increase the mine's operating stability. Ultimately, we believe this new product and revised annual production volume will increase the mine's long-term profitability. We also anticipate producing this type of product from the Phase 2 expansion, and therefore expect production volume of approximately 7.3 million tons. At Wabush, during the quarter, production was unfavorably impacted due to plant equipment failures triggered by several power outages. As we have discussed in previous quarters, we have a number of sustaining capital projects underway which are on track for execution in 2012. Upon completion of these projects, we would anticipate achieving significantly lower and more consistent cash cost per ton. Construction of Phase 2 is moving forward as planned. The concentrator structure work and exterior framework is expected to be complete by the end of this month. Installation of the spiral separators began in May and continued through June. Construction of the overland conveyor system, which is designed to connect the pit to the both mills and ultimately reduce trucking cost and timing, is ongoing. On the logistics front in Eastern Canada, we have completed the cross-conveyor system between our adjacent docks at the Port of Sept-Îles. This infrastructure will provide us the flexibility to load both pellets and concentrate from either dock. We have also reduced train handling and loading times, as well as reduced vessel loading time to approximately 4.5 days. Turning to Asia Pacific Iron Ore. Second quarter sales volume was up 39%, achieving an all-time quarterly record of 3.1 million tons. The expansion of the Koolyanobbing Complex to 11 million tons is officially complete. And for the second consecutive quarter we are increasing our expected full year sales volume to 11.6 million tons. Due to opening new iron ore pits and increased mining activity related to the Koolyanobbing expansion, we had a meaningful amount of low-grade tons available for sale. Our global commercial team was able to successfully place these lower quality tons to customers in China profitably. We expect to resume shipping our standard-grade products during mid-third quarter. Now turning to North American Coal. Sales volume for the quarter increased 21% to 1.5 million tons from 1.3 million tons in the prior year's second quarter. The refurbishment of Oak Grove's prep plant is complete and those circuits are fully operational. We continue to produce -- to improve our production volume consistency at our longwall operations, and during the quarter, we moved Pinnacle's longwall machine into a new coal panel as planned. Looking ahead, we have a planned longwall move at Oak Grove slated for the third quarter, and I'm pleased to note that all of the development work is complete for that move. During the planned downtime for the longwall move, we will continue to work down Oak Grove's inventory stockpiles that were accumulated during the rebuild of the Concord prep plant after being hit by a tornado. In closing, we recognize that the execution of large-scale meaningful projects brings forth challenges. Despite this, we continue to be very enthusiastic about the potential value these projects are expected to generate. Cliffs has a strong history in delivering large-scale projects. I have full confidence in our management team's experience and the technical competencies of our operators. And with that, I'll turn the call over to Laurie for her review of the financial highlights.

Thank you, Joe. Consistent with our new total shareholder return capital allocation strategy, we announced that we've entered into a definitive agreement to sell our 45% economic interest in Sonoma Coal in Queensland, Australia. While we still consider metallurgical coal to be a scarce resource with favorable supply-demand dynamics, the mix with this asset was trending more towards thermal coal. In addition, this decision reinforces our focus on expanding core assets that have the potential to generate the most shareholder value over time. As we continue to refine our capital allocation strategy, we will continue to evaluate various levers we can pull to improve total TSR. Turning to the quarter's results, primarily driven by the lower pricing for the commodities we sell, second quarter 2012 revenues decreased 10% to $1.6 billion. Consolidated sales margin was $449 million, and was unfavorably impacted by lower pricing and increased labor, mining and maintenance costs. Our second quarter 2012 net income attributable to Cliffs' shareholders was $258 million or $1.81 per diluted share versus last year's $409 million or $2.92 per diluted share. Due to the lower year-to-date average iron ore fines price, we are decreasing our expected 2012 full-year average spot price for seaborne iron ore by $5 per ton to approximately $145 per ton delivered into China. This iron ore assumption is the price upon which full-year revenue expectations for our iron ore segments is based. Turning to U.S. Iron Ore's results. Revenue per ton decreased to $120 from last year's second quarter results of $138 per ton, driven by lower pricing for seaborne iron ore and customer mix. Second quarter cash cost per ton increased from $57 to $63 due to the additional cost recognized related to the full consolidation of Empire Mine, along with increased idle costs. Although the year-over-year sales margin per ton is lower, the U.S. Iron Ore business segment achieved a gross profit margin of 44% per ton during the quarter. With the segment's year-to-date results in line with the full year outlook, we are maintaining our full year 2012 revenue and cash cost per ton expectations of approximately $115 to $120 for revenue and $60 to $65 for cash cost. Also, our sales and production volume expectations for the full year remain unchanged at 23 million and 22 million tons, respectively. In Eastern Canadian Iron Ore, revenue per ton decreased to $128, down 28% when compared to the prior year's second quarter. This was driven by lower year-over-year seaborne iron ore pricing and sales mix. The current quarter's results included a higher proportion of concentrate sales from Bloom Lake versus last year's comparable period, which included a higher proportion of premium pellet sales. During the quarter, cash cost per ton increased 20% to $107 due to the higher cost at both Bloom Lake and Wabush. Bloom Lake's increased cash cost per ton was driven by higher labor, tailings management and logistics costs. At Wabush, the downtime that Joe mentioned resulted in higher maintenance and repair spending. We also experienced increased mining costs. We recognized that second quarter costs at Bloom Lake and Wabush were higher than expected. At Bloom Lake, we continue to utilize contract labor as we move forward in optimizing Phase 1 and execute the expansion at Phase 2. We have made significant progress in embedding the cost management processes within the operation that you see reflected every quarter in our U.S. IO operations. These are targeted at identifying areas where we can eliminate variability to control costs and production. Looking ahead, as we continue to increase the operating stability at both mines, we expect to lower our contract labor spending in addition to realizing significantly higher fixed cost leverage, driven by increased sales volumes at both Bloom Lake and Wabush. With the cost increases we have experienced year-to-date at both mines, we are increasing our full year 2012 cash cost per ton expectation in Eastern Canadian Iron Ore to approximately $100 to $105 per ton. However, while you won't see it reflected in the reported quarterly numbers, this does assume we get to our expected cost of $60 to $65 per ton in the last month of 2012, and we will enter 2013 at that level. The team remains confident that goal can be achieved using the techniques and processes that have served us well in our other iron ore operations. Due to the production challenges at both mines and the revised annual production rate at Bloom Lake that Joe described, we have reduced our sales and production volume expectations for Eastern Canadian Iron Ore. We expect sales of approximately 9.6 million tons and productions of 9.2 million tons. Turning to Asia Pacific Iron Ore. Second quarter realized revenue per ton decreased 32% to $118 from last year's $173 per ton. Again, this was primarily driven by lower seaborne iron ore pricing and sales of the low-grade ore Joe discussed earlier. During the current quarter, we sold approximately 430,000 tons of low-grade ore, which negatively impacted our realized price per ton. During July, we shipped over 800,000 tons of low-grade ore, which will also impact our realized prices for the third quarter. The remainder of the third quarter's expected sales volume is anticipated to be our standard lump and fines products. Due to the sales of low-grade products and the reduced expectation for spot pricing, we are decreasing our expected full year revenue per ton to approximately $120 to $125. This assumes no additional low-grade ore sales beyond the third quarter of the current year. Average cash cost decreased 17% to $57 per ton compared with $59 per ton in the year-ago quarter. The decrease was due to the sales of low-grade ore, which carry a lower weighted average cash cost per ton. Also, lower royalty expenses and a favorable foreign exchange rate, partially offset by increased mining costs, contributed to the lower per ton cash cost over 2011's second quarter. Driven by the increased sales of the low-grade iron ore product and the related lower weighted average cost per ton, we are decreasing our expected range for Asia Pacific Iron Ore's full year 2012 cash cost to approximately $65 to $70 per ton. We're increasing our sales volume expectation to approximately 11.6 million tons, and maintaining our production volume expectation of approximately 11.1 million tons. In our North American Coal segment, our revenue per ton was relatively flat at $120. The slight increase when compared to 2011 second quarter was due to a sales mix that was comprised of a higher proportion of premium, low-vol met coal, which almost entirely offset the lower year-over-year spot market pricing for all coal products. Also, as reported earlier in the quarter, we placed volumes with new coal customers in Asia, which have a lower realized price due to the additional freight. With all that, we're maintaining our North American coal full year 2012 revenue per ton expectation of approximately $130 to $135. We achieved lower cash cost per ton of $111 compared with $114 per ton in the second quarter of 2011. This year-over-year improvement reflected greater fixed cost leverage, driven by increased production volumes from our longwall operation. Partially offsetting the improvement during the quarter was a planned longwall move at Pinnacle Mine. We estimate the longwall move negatively impacted cash cost by approximately $9 per ton during the quarter. Primarily driven by the higher proportion of metallurgical coal sales volume, which carries a higher weighted average cost per ton, we're increasing our full year 2012 cash cost per ton expectation to approximately $110 to $115. Costs also continue to be impacted by the higher cost stockpile tons mined at Oak Grove last year, while the prep plant was under construction. For the full year, we are maintaining our expected sales volume of approximately 6.9 million tons, comprised of 4.6 million tons of low-vol met and 1.5 million tons of high-vol met coal, with thermal coal making up the remainder of the volume. Now turning to the balance sheet. At the end of June, we held $159 million in cash and equivalents, and our debt stood at $4 billion. This includes the $325 million drawn on our $1.75 billion revolving credit facility. We closed the quarter with ample liquidity of about $1.6 billion. In the second quarter of 2012, we generated $96 million in cash from operations versus $618 million in cash from operations in the second quarter of 2011. Last year's second quarter results included an additional $275 million in cash receipts related to 2010 pricing settlements. Consistent with prior years, we anticipate generating the majority of our cash from operations in the back half of the year. During the quarter, we also made our first payment under our meaningfully increased quarterly cash dividend of $0.625 per common share. With more than ample liquidity and a significant cash generation outlook, we're very confident in the sustainability of our impressive dividend rate. Based on our current outlook, we would expect to exit the year with no borrowings on our revolver and more than enough cash on the balance sheet to pay a full year of dividends. In addition, we anticipate collecting cash proceeds of approximately AUD 141 million upon completion of the Sonoma Coal divestiture, which is expected to close during the fourth quarter of this year. We're reducing our expected full year SG&A expense to approximately $300 million, driven by the timing of spending for certain corporate projects and continued focus on reducing company-wide overhead expenses. We're maintaining our cash outflow expectation of $90 million related to our Global Exploration Group. For our chromite project, we expect to spend approximately $75 million in 2012. During May, our Board of Directors approved the advancement of the project from the pre-feasibility stage of development to feasibility. During the quarter, we also announced an agreement in principle with the Government of Ontario for key elements of the project, including the development of provincial infrastructure. We are looking forward to providing additional components of the project economics, as well as other meaningful project information, at our Analyst and Investor Day next week in Montréal. We expect a full year effective tax rate of approximately 2%, which includes the impact from the Australian MRRT and other discrete items. Excluding these discrete items, our effective tax rate would be about 22% for the full year. Due to the requirements of U.S. GAAP, we recorded a significant noncash benefit from MRRT last quarter. In future years, we estimate MRRT will increase our overall effective rate by about 3 percentage points. We're maintaining our full year CapEx budget of about $1 billion, comprised of approximately $300 million in sustaining capital and $700 million in growth and productivity improvement capital. We anticipate generating $1.3 billion in cash from operations after adjusting for all the updates within our reporting segments this quarter. And with that, Jess, I think we're ready to open the call for questions.

Tyrone, that concludes our prepared remarks. Please open the lines to begin the question-and-answer session.

[Operator Instructions] First question is from Sohail Tharani of Goldman Sachs. Sohail Tharani - Goldman Sachs Group Inc., Research Division: I'm looking at your coal forecast for the full year, and it's -- as compared to where the global prices are, it's been -- it's getting higher than what you've achieved so far for the last couple of quarters. And I was just wondering how confident you are in getting to this level of $110 to $115 versus for the first couple of quarters, you've been taking -- getting $104 in the face of falling coking coal prices around the world.

Yes, we actually have more low-vol coal coming online in the back half of the year, though we had a higher percentage of thermal in the first part of the year. And we also have a significant amount of our coal already committed and priced. So we're pretty confident about our pricing level for the coal business. Sohail Tharani - Goldman Sachs Group Inc., Research Division: How far out do you have sold -- you sold the coal? Is it all spot or do you sell some out in the future? Joseph A. Carrabba: No, we're -- it's mainly contained within a calendar year, Sohail. You know how the coal business works with different contracts coming on in different increments of the year. If memory serves me correct, we're about 75% committed for the year since we've got about 25% open on the spot market, and that would be a pretty typical year for us. We have very little committed into '13. I think some thermal committed into '13 and that would be about it.

Our next question is from Arun Viswanathan of Longbow Research. Arun S. Viswanathan - Longbow Research LLC: I guess I wanted to delve a little bit deeper into the Canadian cash cost. I know you guys have taken a lot of questions on this over prior quarters. But maybe you can just kind of help me understand how you get from $98 in the first quarter down to $91 in the second quarter at Bloom Lake. I understand, I guess, maybe that was just a fire, $8 a ton off. How do we get to $60 to $65? I think we deserve a little bit more kind of delineation of maybe how much of that is fixed cost leverage, how much of that is the switch to contract labor and maybe you could just put in some buckets for us. Joseph A. Carrabba: Yes, let me -- I'll be happy to do that. We've taken a step back on this mine. It's a brand-new mine, as you know. And really had a long look and considering also the market conditions that came with it, this mine started off with an average on the marketing side of silica spec of 4.5% to 5.5% when it started a year ago, and the market was in a much tighter condition, we were pushing that upper limit. And really, where the market is now, it's -- it requires a 4.5% silica to really get into -- to penetrate the markets that other iron ores are in right now and to replace it. So that was the first thing, was the market look that we took back. And we've moved this mine back to a 4.5% silica, which is really a premium product in the market if you think about it on a silica basis. With that, the cost will come down from several different very large components. There is a new sequencing in the mine, particularly going to the western side as we develop this mine, and get more drill holes in it, there's less magnetite as we go west. And that will improve recoveries as it goes through and give us a better ore blend to go into the mill and improve it there. On the tailings side is the other big bucket. When Consolidated Thompson started up, it was a minimal expense type of look for them. And it was heavily dependent on contractors to truck a lot of the tailings into a very small tailings pond. As we look at the larger growth of this business and think about expansion even beyond Phase 2, when you do things such as tailings pond management, we're actually taking a step back and looking at the future and developing a tailings pond that can take additional tons. When we put that in later in this year and get the piping and the pumping that goes into the tailings ponds in, we'll eliminate all that labor and those contracts and trucks that are now trucking the material through. It will also give us a much better and more comfortable environmental experience, as well as managing water and tailings in the region that goes with that. The third big component is down at the dock. As you heard reported by me earlier this morning, that's going very well. The cross-conveyors are in. We're getting the ability to load both ships, and we're -- we've got the ability now -- we've moved that shipping from 9 days to about 4.5 days, and we're getting rid of 1 of the 2 transloaders, I think around the end of August or early September as well. So that will lower our shipping costs that come in as well. And then, if you will, as Bloom Lake Phase 2 winds down later in the year and towards the startup in the first quarter, that confluence of contractors and that crossover of contractors and camp cost will go down. And while we try to separate them as best we can, there's always an intermingling of contractors and all of that overhead that goes with it. So those are the big buckets that they come in and the guys have plans to move forward. But we're going to take the pain upfront for the next few quarters and we're not going to rush this mine. It's a long-lived asset, it's got the potential to produce a high-quality premium product, but there is a plan on the cost reduction, it's just not a wish and a hope, if you will.

Yes, those are all the real operational things that the team up there is very focused on. And if you think about it, this year, we're going to produce 5.7 million tons and by next year, we will be at that 7.2 million tons for the full year and that's a -- real, all these mines have a very heavy fixed cost burden. So you're going to get a lot of leverage out of that fixed cost, 1/2 to 2/3, at least, of this change that we're talking about is the fixed cost leverage. So that comes pretty easily once they start working through all of this. As Joe said, it's a new mine. They've got to get these kinks worked out and be able to consistently produce at 7.2 million tons and take out all of the distractions. Arun S. Viswanathan - Longbow Research LLC: So the 7.2 million is only what you'll achieve next year, so when you say this year is 9.2 million, I'm not following. So are you...

The 9.2 million is all of Eastern Canada, so that includes Wabush and Bloom Lake. Bloom Lake is going to -- we're going to produce that 5.7 million this year. Arun S. Viswanathan - Longbow Research LLC: Right. Okay. And what about -- so just so I'm clear then, so fixed cost leverage, I mean, can you characterize that as maybe $15 a ton and then contract labor is maybe another $10 a ton? I mean, how do we get from...

You're really in the ballpark, yes. Arun S. Viswanathan - Longbow Research LLC: Okay. And then -- so then what about further expansion plans? I mean, you'd previously talked about increasing 4 million tons a year. Is that still kind of the plan or...

It kind of flows along like that. So this 7.2 million is Phase 1. And Joe talked about Phase 2 -- it's well underway in terms of construction. And it does create a bit of distraction for the people operating Phase 1 as this is happening. Phase 2 begins to come online mid-next-year. Phase 2 will be 7.3 million when it's at full production. So you'll see some impact. Phase 1 will produce 7.2 million next year. You'll see some impact, another 3-or-so million tons at the beginnings of Phase 2 next year. And then the following year, you'll get the full impact of both Phase 1 and 2. Joseph A. Carrabba: This is a long-winded conversation. I apologize for the other listeners to it, but hopefully we're answering the same questions. So also on this, as we announced at our Investor Day last year, we continue on the Scoping Study of Phase 3, and that's going along very well. And we continue with the Scoping Study with that. And I also want to -- for the listeners as well, to make sure -- we are deliberately putting our focus in Canada on Bloom Lake. This is what we've got to get up and get running. We are putting some sustaining work and a lot of engineering study work into Wabush. But we are not focusing on Wabush at this point in time. We are putting more of a focus on Eastern Canada, and we will address Wabush more head-on in 2013. Arun S. Viswanathan - Longbow Research LLC: Okay. I guess I just have one more question, I'm sorry. So your outlook for $145 on iron ore, we've averaged $142 through the year. Maybe you can just help us understand what you're expecting for the back half of the year, how it plays out, the timing of further increases and what's that based on. Joseph A. Carrabba: I'll just go back to our comments on the macroeconomics that we've had through the year. I think June's strong push for steel production in China -- I think the second-largest month on record -- is an indication of where steel production is in China. We still feel very comfortable, as we said, on the macros that there will be stimulus push in the second half, and we think as a result of that, we'll see improved iron ore pricing coming in, in the second half of the year.

Our next question is from Tony Robson of BMO. Anthony Robson - BMO Capital Markets Canada: Joe and Laurie, Phase 1 and Phase 2 of Bloom Lake, sorry to still harp on about this subject. Joe, anything you can do to tweak the capacity of the plant, like additional spirals or something? I understand that the building size is limited, but have you thought about trying to take it back to the rated 8 million and 16 million tons? Joseph A. Carrabba: Of course, we have, Tony. And I think as the guys get into this and they get their metallurgy tweaked, I think -- I don't know if you're coming up next week or not -- but I think you'll see the fine-tuning in that plant right now at 7.2 million has really come along very, very well with the way the spirals have been balanced and the screens and the vacuum tables have been balanced. A lot of the lessons learned are being taken over into Phase 2 so there won't be retrofits. I'm sure we'll get the improvements out of that and then we'll go back and retrofit. The building actually has a lot of room in it. I certainly wouldn't have designed one that way, but I'm glad to have the room that goes with it. So we've got plenty of room for additional spirals, if needed, Tony, as time comes on. I think it's more about the mine blend and getting that really, really nailed down like we do so well in these other low-grade deposits that we manage around the world and it just takes a little time as we get more drilling information and we move West and find more ore that we can build that mine sequencing plan so that we deliver the right type of ore into the mill. And I think that's where we'll get the bang for the buck and that's just going to take a little while. Anthony Robson - BMO Capital Markets Canada: Okay. Follow-up question, if I could, please. Silica coming down from 5.5% to 4.5%. You talked about opening that up to new markets, you thinking more of European and Middle East markets, [indiscernible] 4.5% silica products? Joseph A. Carrabba: We haven't gone to the Middle East yet. Certainly, in Europe, there's some appreciation for that and the discussions are going on there, but particularly in South Korea, a market that we haven't spent any time in hardly at all for us and in Japan, which we know very well and have an office there, with their thoughts around slag and the cost of slag, knowing the value and the use of their blast furnaces as steel prices remain pretty compressed, a lot of people are starting to pay a lot of attention to value and use around their blast furnaces, the heat values, the slag that they lose and those types of things and we need to put a premium product in there, too, to penetrate the markets that we're not into right now. Anthony Robson - BMO Capital Markets Canada: Okay. Final question, please. If hopefully, in the months or years ahead the iron ore market tightens up again, any thoughts of going back to a higher silica products increasing your capacity or this is a permanent charge? Joseph A. Carrabba: Yes, I think, Tony, that's the beauty one of this mine as we get to understand it is we've got the ability to tweak this mine as the guys get to understand it and they're showing right now that they've come up a whole percentage point on silica. And I think what we really haven't got ourselves totally involved in with yet we've been so focused on Bloom Lake is we also have the ability to do the blending over at Wabush. And while it's got a high manganese that people also point out, it's got a 2.6% silica as well. So there's also other optionality and other product optionalities that we have just wide open for us right now as the market presents itself and its needs.

Our next question is from Shneur Gershuni of UBS. Shneur Z. Gershuni - UBS Investment Bank, Research Division: Just had a question. I don't want to rehash the whole Canadian costing again. So, I just wanted to talk about the other project in Canada that you're doing a feasibility study on with respect to chrome. Market conditions are kind of not ideal at this point right now. There's a lot of global uncertainties and so forth. I was wondering if you can talk about your flexibility assuming the feasibility study comes through and says you should go forward with it, kind of your flexibility in being able to delay this project or delay the CapEx with respect to project and if you can sort of prioritize it with respect to go or no go on a project relative to debt paydown versus your dividend strategy as well, too. Joseph A. Carrabba: I'll take the first part of it and we have total flexibility at this point in time. It is a feasibility engineering study that we're moving forward on at this point in time for a long asset once again like this, even through feasibility studies and clear into if you made the final decision to go with project construction and in that, it's several years out still and the market, I'm sure will change once again. And you got to have the robust business case in these mines that can ride out the lows. I don't think you can make a snap decision because things are low right now or the opposite case that things -- if they were high that you'd make it. You've got to have a good position with this mine, which it is on the cost curve. It's in the very low end of the cost curve and when you got that, you've got a lot of strength to continue your thinking go-forward. But we do have total flexibility and no final decisions have been made on where this project goes forward or not until we came out of feasibility sometime next year.

Yes, and absolutely, we would prioritize the dividend first. If the market were such that pricing did not allow us to generate enough cash to do both the project and the dividend, the dividend would come first. And we will continue to keep our balance sheet at the investment-grade profile that it is right now. Both of those would come ahead of investing in that project. Shneur Z. Gershuni - UBS Investment Bank, Research Division: Great. And a follow-up question to Sohail's comments about your low-vol met coal you said that you've mostly contracted out, there's been a lot of chatter in the Atlantic basin about taking discounts and so forth relative to benchmark. Are you seeing any of that or is that really just happening in the mid-grades and lower-grade met coals? Joseph A. Carrabba: I think it's more in the higher grade vol -- the high-vol As and Bs. I think there's more of that. But let me be clear, too, on the low-vol, there's always chatter in the market. That's why we have salespeople that are negotiating with customers and in a tough environment in the Atlantic basin right now, negotiations continue. I mean, I don't spend my day on the day-to-day of it, but sure, they're negotiating pretty hard right now on all sides. But I don't think other than the high-vols, I don't think it's any more unusual than what we would normally see in the low-vols. Shneur Z. Gershuni - UBS Investment Bank, Research Division: Okay. And one final follow-up question, with respect to your kind of your revenue per ton guidance with respect to how you think about the Chinese market steel production and so forth, there's potentially -- let's say there's a risk that the stimulus plan that you're thinking about, let's say shifts to Q1 or Q2 of next year. How much downside do you see in your number if that was to be the case? Joseph A. Carrabba: I don't know that I have a number in the top of my head, but I mean I think you can do the calculations pretty well. I guess the only thing I would leave you with is, obviously, we all have to make projections out on what we see and where we think things will be. But we also do scenario planning for this business as well. And we've got those plans if things are to go down or up. But particularly on the downward side, we do the risk analysis and do the scenario planning. But I don't have a number for you.

Yes, and we certainly did that before we announced the dividend increase and given that we've got half the year under our belts already. And we're pretty confident about the Chinese floor in pricing, and I think you're going to start to see some of that production come off anytime now with the pricing, the spot pricing drop to where it is. So could there be a $10 a ton potential? I suppose there could be, but I don't see it being anything more than that. Joseph A. Carrabba: So I think we all got our eyes wide open on this thing but again, we do have the fundamental beliefs of what the industry has espoused [ph] And the pricing does seem to reflect, though relatively recent on the Platts index, that the Chinese floor seems to be pretty solid.

Our next question is from Jorge Beristain of Deutsche Bank. Jorge M. Beristain - Deutsche Bank AG, Research Division: Sorry, I missed some questions earlier as I was multitasking on a few calls. But my first question, if it hasn't been asked already, is if you could just, Joe, maybe update us on the future of the North American Coal business? You've set yourselves a goal about 1.5 years ago in January 2011, I believe, saying that by year-end 2011, that it would kind of be up or out for the coal business. You have divested the Australian coal assets now. Should we read anything into that? Are you satisfied with the coal performance or can we read anything into the fact that the coal business has not yet really delivered up to its results that the clock is ticking there? Joseph A. Carrabba: Well, the coal business -- let me just be straightforward, as I always am, the coal business has not delivered up to its expected results obviously, with that. However, what we did say and you're absolutely right, Jorge, is we did change our timeline a bit when we got hit by the tornado. The 3 projects that we talked about have been executed and executed very well, and I think that's where you see the stability on our cash cost coming in on these longwall fines [ph] As they are now. It's unfortunate that on the market side, that those winds shifted, or these mines would be in very good shape from a financial performance at this point in time. Nevertheless, we get paid to look at the shifting sands and if the market were to stay depressed, we've got to continue to look at all of our assets just like Sonoma and all the rest of our assets and evaluate the coal business on the long term. We're still like everybody else, bullish on met coal. I don't think the macros have changed. And we don't see on the supply side any of the good, hard coking coal that our longwall mines produce out of West Virginia and out of Alabama. They're still heavily sought after to blend off the lower grade met coals, if you will. And I think as we watch, it's all about Europe right now as far as the coal business in the Atlantic basin. And we'll just have to watch the run rate of Europe. But certainly, all assets are under scrutiny in this business for Cliffs at all time.

But I definitely would not correlate the Sonoma sales to our North American Coal business. Sonoma is pretty small, not controlled by us, not a really long life, trending more towards thermal coal. So that was a decision based on that particular asset. I wouldn't -- I would not correlate the 2. Joe's comments are absolutely correct but... Joseph A. Carrabba: Yes, let me just reinforce that. Yes -- thank you, Laurie, and yes, we thought we could be at some synergies and grow a coal platform in Australia. We have not been able to do that. We think the assets are very highly priced as you seen evidenced by the last few coal sales. This has been a great partnership. The mine's only got 5 to 7 years left. It does not have any growth potential in it with the way the geology of the coal mine is and it's a good time for us to exit on a nice little isolated asset that's performed very well. Jorge M. Beristain - Deutsche Bank AG, Research Division: Okay. And my second question, just following up on the chromite, is how should we think about the funding for that project conceptually? Currently, your kind of at our EBITDA run rate of around $2 billion for this year, net debt is about $4 billion, and the chromite project has a $3 billion price tag. Should we be thinking about it as about 1/3 debt, 1/3 equity, 1/3 supplier financing or do you believe you need to bring in a partner at this point in order to make a go of that project?

It's really still early days. We're considering all of the options that we have available. A partner could be an option. Depending on what pricing does over the next couple of years. Keep in mind that, that outflow of $3 billion does not happen for a couple of years. So we're probably all going to experience quite a few pricing cycles for iron ore. And that will have an impact on how we think about financing that project. So a lot of options still open as we move forward on that one. Joseph A. Carrabba: Yes, that's right, Jorge. And I would say right now, along with everything we're moving along with the engineering and everything as well and the environmental permitting, the 2 focus points really right now and hurdles to get over is our -- and to work with are one, is we're working towards MOUs, which will lead them to the impact benefit agreements with the First Nations group and our folks are working very hard to get those MOUs established in the First Nations groups up there. And the second is the focus on the ability to use the route that we've selected for the north-south corridor to put the road in as it goes through and that's going through its judicial process right now. So those are the 2 focal points that we're looking at and focusing on and Laurie and her team is saying, very early days are exploring the options along with the commercial team, including partners and/or suppliers -- or customers, potential customers, rather, to come into this. But early days, but obviously, we're putting some thought to it.

Our next question is from Brian Yu of Citi. Jonathan Sullivan - Citigroup Inc, Research Division: This is actually Jonathan Sullivan in for Brian. I just had a question, it's a bit of a follow up on what you guys were talking about before. I wonder if you could comment a bit on how you think about the dividend in various iron ore benchmark pricing scenarios?

We -- as I said a couple of times, we've really pressure-tested it and believe that we can sustain this dividend under quite a few variations of pricing scenarios. There are a lot of things that -- levers that we can pull as an organization. You may remember in 2008, 2009, we were generating cash and so we can pull those levers if we need to, and this was a commitment that we made to our shareholders that we would put above pretty much anything else. Joseph A. Carrabba: No, that's right. And I think you've got to take 2012 as a big transition year for us, particularly with the new assets up at Bloom Lake. And as soon as we get those costs and get that operation stabilized and Phase 2 of the construction piece coming over that, I think you can see very clearly, there's plenty of room for the dividend. And again, I will continue, as Laurie will, to reassure everybody. We didn't put this dividend on to take it off the table if things got tough. We've done it under a lot of different scenarios, and we continue to maintain that we can support that dividend.

Our next question is from Kuni Chen of CRT Capital Group. Kuni M. Chen - CRT Capital Group LLC, Research Division: Just a follow-up on Bloom Lake, as you move from the high silica to a low silica product, can you talk a bit about how complicated that process is and what your learning curve may look like? Joseph A. Carrabba: Oh, we're there. The guys actually were able -- once we gave them a target on the silica instead of working between a 1% range, and we settled in on a target where they wanted to, the guys were able to come up to it very well and very quickly. And I think that's a credit to just the way the mill has been -- the whole metallurgical process within the concentrator has been built and how it can be fine-tuned and the technical skills of the people that we have. Again, as I reiterated on the -- earlier, I know it's a hard concept to come up with. This is really all about blending in the mine. That's where it all starts. You have very, very little -- you've got fine-tuning control in the concentrator, but you really got to get -- it's what you present to the mill is the way you're going to keep your recoveries up no matter what the grade is. So that's the part that's lacking, and again, we're just getting more and more drill data and we do have a lot of focus as you can imagine out of the U.S. Iron Ore with those blending expertises. That's what we do in all of our low-grade mines within the United States. And they're testing a number of different metallurgical grades and theories as they go forward just to nail this down. And it just takes some time and more knowledge of the mine. So think about the mine, not about the concentrator. Kuni M. Chen - CRT Capital Group LLC, Research Division: Okay. Got you. That's helpful. And then just on Phase 2, I think last quarter, you said you were about 30% along. Can you just update us there? Joseph A. Carrabba: Yes, again, I -- the engineers are still working through it. We're going to have a more defined number, if you will, on the S-curve probably later in August as we go forward. And I just don't have a number to give you with that. It would not be accurate. But we do believe that we're on time and we're on schedule as we go right now. But I'm sorry, I don't have an S-curve number to report to you.

We will still be -- we'll be starting off the first half of next year... Joseph A. Carrabba: We'll be starting up the first half of next year, there's no question about that.

And your next question is from Mitesh Thakkar of FBR. Mitesh Thakkar - FBR Capital Markets & Co., Research Division: Just a quick question on Amapa project. What is your thought there and have you looked at kind of monetizing that just like what you did at Sonoma? Joseph A. Carrabba: We certainly have, as we've discussed in other -- in previous calls, and we're still at the same place. We're a 30% minority partner with Anglo being the lead partner with that. Discussions as they get closer to Minas-Rio are starting to take place around what we do with the asset and the potential sale of the asset. We're in a good spot on that. We have tag-along rights, as well as rights of first refusal to go with it, and if the potential of looking at that asset as far as the sale goes, we will work with Anglo to move forward with that. Again, it's in the same category for us as it is with Sonoma. It's a small, isolated asset with little upside for us. We thought we were going to build out a platform in Brazil. We thought this was a stepping stone, that hasn't occurred. We've moved our office out of Rio de Janeiro and over to Santiago and shut that down. So it's another isolated asset that we would be open to sales on.

Our next question is from Tim Hayes of Davenport & Company. Timothy P. Hayes - Davenport & Company, LLC, Research Division: Two questions. First, the cash flow guidance of $1.3 billion. Do you have an estimate of how much will be from working capital?

How much will be from working capital of the -- I think it's not a huge percentage. It's not that we're getting all that from -- that's mostly from EBITDA. Timothy P. Hayes - Davenport & Company, LLC, Research Division: Okay. And on the higher grade ore from Bloom Lake, how much -- what's the price differential for that new grade -- better grade versus the lower grade?

The high-grade product from Bloom Lake, we get paid on iron content so we'll get an additional amount for the iron content that we get paid for. The bigger issue for us is that it really becomes more of an attractive product to Asia outside of China, or Europe. And because of the freight, we make more money in Europe. Just generally, you will get the premiums for higher-grade iron content outside of China that you won't get in China. So that's really where the value comes to us from those types of things. Joseph A. Carrabba: That's right. I think sometimes, there's a thought that all iron ore is created equal, and actually when you go to blast furnaces and get into the technical discussions with it, they really have to figure out how to blend it and how to use these different products. So you got to think about this as a different market technique that we go into, not just selling bulk iron ore to traders, if you will. And we're really trying to specifically get into the right mills that actually understand a higher-quality product and get the value and use so that they can pay us for the iron ore premium. So we're really getting our trial cargo set with our target customers in there, and then we'll work on the premiums, but there are -- there is a premium associated with the higher iron content.

And Tim, we just checked quickly and actually working capital is negative. So it's really operations that are generating the cash.

Our next question is from Steve Bristo of RBC. Steve Bristo - RBC Capital Markets, LLC, Research Division: Just regarding this higher iron content concentrate, is the iron content actually increasing? I believe it was 66% before. Joseph A. Carrabba: Well, if the silica goes down, the iron has to go up with that. I mean not to be glib, but that's how the balance works. But yes, it will be about a 66% -- it wasn't a 66% at 5.5%, I think most of the illustrations were done on the 4.5%, the typical, not the range of the specification. So yes, that iron ore will be in the 66% range. Steve Bristo - RBC Capital Markets, LLC, Research Division: So it wasn't 66% and 5.5% before? Joseph A. Carrabba: It was and it wasn't. The final specification of the product was varying between 4.5% and 5.5% as it went from there. So there was -- when it was 4.5%, it was 66%. And then it would move from 5.5%, obviously, when it went from there. So what we're trying to get here is consistency in our quality not getting that bouncing all over the place. Steve Bristo - RBC Capital Markets, LLC, Research Division: Okay. And now at the end of the third expansion, they were talking about like a headline sort of production number of 24 million tons an annum [ph], 8 million for each phase. Now that you're doing this higher content, you have 7.2 million in Phase 1, 7.3 million in Phase 2. What would be the overall rate you're looking at with all 3 expansions, assuming... Joseph A. Carrabba: It would be 21.8 million for the overall rate if Phase 3 went ahead for the overall expansion. Steve Bristo - RBC Capital Markets, LLC, Research Division: And cash costs you're talking about them now coming down to a target of around $60 to $65 at Bloom Lake by the end of the year. Is that sort of what you're looking at for long run stable cost now at Bloom Lake after all 3 phases are done and once you're stabilized?

Yes, yes, I think that would be a fair assumption. Steve Bristo - RBC Capital Markets, LLC, Research Division: Okay. And then lastly, on Wabush, you said you're not really going to be focused on that this year as much as Bloom Lake. So can we expect these costs to remain high at like $125 a ton range going into 2013 as well? Joseph A. Carrabba: I think there will be minimal impact on the cost. Yes, I think they're going to stay up in that range. Again, we're putting some sustaining capital in there trying to brace up the maintenance in a number of different areas that we talked about. But we also need to put in -- we're also doing some full engineering studies. I mean Wabush is a pretty tired asset, and they're going to have to be some significant capital in there to really get it to a sustained production and cost mode. So I don't want to have anybody think any differently. And until we could really focus and get the studies in from the engineers, those costs will remain high for the rest of the year.

Yes, I mean, you might do something come down $5 to $10 next year if things are working well but the type of improvements that we are committing to at Bloom Lake, we are not going to commit to that level of improvement at Wabush until we get Bloom Lake and then we turn our focus towards Wabush. Joseph A. Carrabba: Right. Again, just like the quality of Bloom Lake, we're not comfortable with how sporadic the cost per ton is as well at Wabush. It's a surprise to us in our planning and to everybody else. So yes, you can expect relatively high costs for the rest of the year.

Well, thanks, everybody for joining us on today's call. As always, I'll be available throughout the day to answer any follow-up questions that you may have. Thanks, guys. Joseph A. Carrabba: Thank you, all.

Thanks.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect, and have a wonderful day.