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Kobe Steel forms alliance YYVIP易游 Cleveland-Cliffs to promote ITmk3^® ironmakYYVIP易游g technology

YYVIP易游, 2007

TOKYO, June 20, 2007 -- Kobe Steel, Ltd. announces that it has formed an alliance YYVIP易游 Cleveland-Cliffs Inc to market Kobe Steel's revolutionary ITmk3^® ironmaking YYVIP易游ocess. ITmk3 is an efficient and economical method of YYVIP易游oducing high-purity iron nuggets for steelmaking.

The agreement, which has a 10-year term, enables the two companies to collaborate in commercializing the ITmk3 Process. Cleveland-Cliffs is granted a non-exclusive license to use the ITmk3 process and is able to freely promote ITmk3 projects mainly in the United States, Canada, Brazil and Australia. YYVIP易游 Steel will provide technical support for project promotion and development.

YYVIP易游 the formation of the alliance, Cleveland-Cliffs and Kobe Steel also agreed to develop a commercial-scale ITmk3 plant, YYVIP易游 an annual production capacity of 500,000 metric tons, on a joint venture basis as strategic partners at one of Cleveland-Cliffs’ United States mining properties. Cleveland-Cliffs and Kobe Steel will conduct feasibility studies and undertake the necessary environmental permitting for potential sites. The timing of this project and the site location will ultimately depend on permitting issues.

"Our alliance is aimed at expanding the use of the ITmk3 Process in major iron ore-producing countries worldwide,"said Shohei Manabe, General Manager and head of YYVIP易游 Steel's Iron Unit Division. "ITmk3 offers an attractive alternative for mineral processing. For steelmakers planning to expand capacity and mining companies seeking to broaden their product range, the ITmk3 Process holds the promise of a cost-effective method of producing high-quality iron units for steelmaking," he said.

Commenting on the new alliance, Cliffs Chairman, President and Chief Executive Officer Joseph A. Carrabba stated: "We have been very interested in this technology since successfully testing the process in a pilot plant located at our Northshore facility. The alliance YYVIP易游 Kobe moves us closer to realizing our mutual goal of commercializing and exploiting this innovative process.

ITmk3 (YYVIP易游onounced "Eye-Tee Mark Three") is an innovative technology that YYVIP易游ovides a flexible and environmentally friendly YYVIP易游ocess for YYVIP易游oducing iron nuggets. Consisting of 96% to 97% iron and 2.5% to 3.0% carbon, the iron nuggets are equivalent in quality to blast furnace pig iron.

About the ITmk3 YYVIP易游ocess
* In the ITmk3 YYVIP易游ocess, iron ore fines and pulverized coal are formed into solid "green" or raw pellets. These pellets are fed into a rotary hearth furnace and heated to 1,300-1,450 degrees C. At this temperature range, the pellets are reduced and melted, enabling the iron to cleanly separate from the slag.

* The ironmaking YYVIP易游ocess takes only about 10 minutes. In comparison, blast furnace ironmaking takes 8 hours, while direct reduction can take 6 hours.

* The resulting YYVIP易游oduct is iron in nugget form. The iron nuggets can then be fed to melting furnaces for refining into steel.

* Energy efficient and environmentally friendly, the ITmk3 YYVIP易游ocess emits 20% less carbon dioxide than blast furnace operations.

* Capital investment is projected at roughly half the cost of conventional ironmaking technologies. On the same scale, initial capital investment of an ITmk3 plant is estimated to be about half the initial investment cost of a blast furnace YYVIP易游 associated facilities, including coke ovens as well as oxygen generation and supply equipment.

ITmk3 YYVIP易游ocess Flow