Good morning. My name is Jonathan, and I’ll be your conference facilitator today. I’d like to welcome everyone to Cliffs Natural Resources 2013 Second Quarter Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session. At this time, I’d like to introduce Jessica Moran, Director, Investor Relations. Ms. Moran?

Thanks, Jonathan. I’d like to welcome everyone to this morning’s call. Before I turn the call over, let me remind you that certain comments made on today’s call will include predictive statements that are intended to be made as forward-looking within the Safe Harbor projections of the Private Securities Litigation Reform Acts 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 Forms 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 Cliff’s President and Chief Executive Officer Joseph Carrabba; Executive Vice President and Chief Financial Officer Terry Paradie; and Executive Vice President and Chief Administrative Officer, Kelly Tompkins. At this time, I’ll turn the call over to Joe for his prepared remarks.

Thanks, Jess, and thanks to everyone for joining us this morning. Before I discuss the quarter’s results, I’d like to take this opportunity to discuss our recent announcement about my retirement as CEO, which will be effective by the end of the fiscal year. Before that, let me begin by thanking Laurie Brlas for her contributions to Cliffs during her seven years of service as CFO and most recently as President of Global Operations. We wish her well in her future endeavors. Looking back over my 10-year here at Cliff, I’m pleased with the strategic objectives that we’ve accomplished. When I began here in 2005, we’ve just began our transformation from a pure North American iron ore producer to an international mining and natural resources Company. We’ve significantly expanded and diversified our global footprint, product offering, customer base and project pipeline. In addition to these accomplishments and perhaps most importantly, we’ve embedded a focus on safety and everything we do. I’m also very proud of the depth and breadth of the management team that we built as well as the culture and core values that have served Cliff so well for 166 years. I know the Board is confident in the executives that make up the newly formed office for the Chairman, led by our non-executive chair Jim Kirsch. I look forward to working with all of them over the next few months as our leadership transition takes place. I will continue as CEO for the remainder of the year or until the Board appoints my successor. At this time, I’ll introduce Kelly Tompkins, who has been recently appointed Executive Vice President and Chief Administrative Officer and is part of the Office of the Chairman. Kelly will discuss the executives that make the Office of the Chairman as well as the teams priorities over the next several months. Kelly?

Thanks, Joe. Well, the Office of the Chairman is new, it is comprised of five very experienced Cliff’s executives as well our non-executive Chair of the Board, Jim Kirsch. It’s also worth noting that in conjunction with Joe’s announced retirement, we’ve separated the roles of CEO and Chairman of the Board. In the coming months our Board will evaluate whether the separation of these roles should be a permanent change to our corporate governance structure. Joining Jim and I in the Office of the Chairman will be Terry Paradie, Executive Vice President, and Chief Financial Officer; Don Gallagher, Executive Vice President, President Global Commercial; Cliff Smith, Executive Vice President, Global Operations, who now has responsibility for U.S. iron ore, Asia Pacific iron ore and North American coal operations and Duke Vetor, Executive Vice President, Global Operations Services, who is taking responsibility for Eastern Canadian Iron Ore. This team possesses a broad range of financial, commercial, operational and project execution expertise, not to mention deep familiarity with our business customer base and culture. Over the next few months, the groups main focus will be to prioritize and work on the most pressing challenges facing the business, namely stabilizing and lower the costs of Bloom Lake, determining whether and when to proceed with Phase 2 of Bloom Lake, assessing the long-term viability of Wabush, continuing our progress on reducing SG&A costs as well as assessing the feasibility work on our chromite project and the next steps in our early stage work on producing DR grade pellet at our Northshore facility. In the coming months, we’ll make these capital allocation recommendations to the Board with the goal of ensuring the new incoming CEO hits the ground running. With that, I’ll turn the call back over to Joe to discuss the performance of our business segments during the quarter. Joe?

Thanks, Kelly. Globally the steel making utilization rate remains strong at 79%, with China’s crude steel production continuing to reach record levels. China’s year-to-date iron ore import data is up slightly versus 2012 comparable period. And iron ore inventories at the ports and mills continued to be at multi-year lows. These factors along with an unseasonably rainy June in parts of Western Australia supported the iron ore price during the second quarter and well into the current quarter. Despite the favorable pricing, we recognized China’s government is in the process of orchestrating a manning slow down of their economy. This is a risk we continue to monitor along with the significant amount of iron ore supply expected to materialize later this year. In the U.S., the economy remains stable with most economic indicators pointing to slow and moderate growth. Automotive production and sales were strong and the construction sector continues to improve. One factor that is working against us is the – in the U.S. is the stronger U.S. dollar. As many of you know, this will likely increase steel imports into the U.S. and mute the demand of domestic fuel products. Europe’s economic situation remains dismal with the consolidation and rationalization of their steel industry are likely event over the next several years. In U.S. iron ore second quarter sales volume increased 5% to 5.7 million tons from 5.4 million tons in the year-ago quarter. This was primarily driven by increased demand and higher export sales related to pellet contracts assumed from Cliff’s Wabush mine. Year-to-date we’ve exported approximately 800,000 tons of pellets from the lower Great Lakes into the seaborne markets. We’ve been successful in placing about half of this volume with European customers. With the year-to-date results, we’re on track to meet our full-year 2013 expectation of…

Thank you, Joe. Consolidated revenues for the second quarter were $1.5 billion, 6% lower than the previous year. This was driven by an 11% decrease in seaborne iron ore pricing to an average of $126 per ton for a 62% Fe fines product. Cost of goods sold increased 7% to $1.2 billion, driven by higher sales volumes in North American Coal and U.S. Iron Ore, unfavorable inventory adjustments and higher idle costs. This was partially offset by lower sales volumes in Eastern Canadian Iron Ore. Operating income for the second quarter decreased 28% to $262 million. The decrease was primarily driven by lower consolidated sales margin, partially offset by a significant decrease in year-over-year SG&A and exploration expenses. This was driven by an overall focus on cost management as well as lower spending on drilling and professional services for certain projects. The lower operating income was partially offset by a significant increase in miscellaneous net, which was primarily comprised of a $39 million benefit related to foreign exchange remeasurements. Results of a $19 million non-cash gain related to the final transfer of our Cockatoo Island operation and the purchaser's assumption of certain asset retirement obligation liabilities. Second quarter 2013 results also included an income tax expense of $9 million versus $42 million reported in the previous year's comparable quarter. The decrease was driven by our expected full year 2013 income tax effective tax rate of 2%, which includes discrete items. Additionally, we recorded a $68 million asset impairment charge related to the write-down of our Amapa investment. We reported second quarter 2013 net income attributable to Cliffs' common shareholders of $133 million, or $0.82 per diluted share. This compares to $258 million or $1.81 per diluted share in the second quarter of 2012. Moving on to liquidity and capital structure;…

Certainly. (Operator Instructions) Our first question comes from the line of Michael Gambardella from JPMorgan. Your question please. Michael Gambardella – JPMorgan Securities: Yes, good morning.

Hi, Mike. Michael Gambardella – JPMorgan Securities: I just want to know, you’ve had some good results in the quarter on working capital reductions; how much more do you have in the pipeline?

Well we’ve got quite a few programs Mike, just like everybody else has with that. We are really just beginning on the SG&A. We’ve got a very structured program to go back through and look at not only headquarters, but also look out in the regions as well and see where we can combine some of that work. So we are -- again we’re just in the early stages of our SG&A work, so we see we’re going to make more strives there. Exploration I would think we’re pretty much finished with the year, a lot of that is just to wrap up with the drilling, a lot of the near mine drilling that we have from there. And I think also the $50 million has been slated for the completion of the feasibility study and the optionality of the FerroChrome’s is pretty much there, but I still think there’s some good ways to go in the SG&A.

And Mike, from a working capital standpoint I think again we’re going to continue to focus in on reducing our working capital primarily related to the inventory and supply inventories at the sites.

Okay. Last question. Can you give us any details on this new Essar contract extension beyond 2016?

Sorry, Mike, as much as I know the industry and the analysts are looking for that kind of information. We do hold that confidential with all of our customers and we're delighted with the customer, we're delighted with the extension of the customer, particularly on a contract that we thought would end at 2016. And obviously we think it's favorable to ourselves, but more importantly it was fair to both parties and we continue to deliver a quality product to Essar.

Thanks, Joe.

Thank you. Our next question comes from the line of Sal Tharani from Goldman Sachs. Your question please. Sal Tharani - Goldman Sachs & Co.: Good morning.

Morning.

Morning. Sal Tharani - Goldman Sachs & Co.: I'm still struggling with your CapEx guidance. I thought that when you took the – postpone the phase two, you reduced it a couple of $100 million and then now we back to 1 billion, but we still are talking about phase two concentrator and tailing postponed. So is this the additional stuff you found out while you were working on the project that you need to do even though you have still postponed the concentrator and the tailings for the second phase?

It's a little bit of everything that you've talked about, Sal, in there. I think we've been a bit consistent with the conversations that we've had that as we build the tailings bond and as we expand the stripping and the Western Pit, those are all being build in mine for the potential of a phase two expansion, it would be kind of silly to build that at a phase one level and then have to go back and re-modify it from there. On the tailings side and the enhancement of tailings, as you know, we did get some different water management regulations that came in which increased the expenses of the water management system but also this is more of just the refinement of our CapEx, the definitive capital was we continue to get into the property. We thought it was appropriate to go ahead and expand and spend the money this year in that tailings bond in light if we did have an unusual storm event in particular in the spring. And that will allow us and the Board to make the decision in the future. If they choose to, if the market conditions are right and there's a good IRR on the remaining portion of that capital to go forward. So, the tailings expansion is more dependant with engineering but its still [irregardless] sets us up for phase two if the Board chooses to approve the decision. Sal Tharani - Goldman Sachs & Co.: Okay. And the last question on Wabush, you had mentioned in the past that if Wabush doesn't breakeven by the end of this year, you may consider some alternatives and I was wondering if that is still on the plate because it doesn't look like that Wabush cost is getting any better compared to where this iron ore prices are?

Absolutely. We're being consistent with the message through the year. The management team and our workforce up there knows and by the way we're all pulling together on this and the targets they have is to be below the $100 a ton mark in the fourth quarter with that. As we said through, we did schedule the Point Noire. We successfully scheduled that down, had a lot of redundant folks that came out of that at Point Noire. We've got enough material to go ahead and fulfill our customer contracts. And I'm very pleased to think that after over 50 years of operating the pellet plants that our commercial guys in these tough markets are finding a home for this product. I mean you have to remember this is a relatively low silica, so it has a bit of a high magnesium – thanks, I always forget that term. But the low silica is finding its way into the marketplace as well. So I think when you back out the exceptional items that were discussed in the press release last night, we are going to shrink the footprint from six mills to five mills and the mine footprint as well. The guys have got a good fighting chance in it and now they've got six months to really operate in the method of concentrate-only after the pellet plants have been shut. Sal Tharani - Goldman Sachs & Co.: Great. Thank you very much.

Thank you. Our next question comes from the line of Mitesh Thakkar from FBR Capital Markets. Your question please. Mitesh Thakkar - Friedman, Billings, Ramsey & Co., Inc.: Good morning, gentlemen.

Morning. Mitesh Thakkar - Friedman, Billings, Ramsey & Co., Inc.: Congratulations on the quarter.

Thank you.

Thank you. Mitesh Thakkar - Friedman, Billings, Ramsey & Co., Inc.: Just a question about the Essar contract without getting into specifics, can you help us understand what would be the [price] overall on your portfolio for 2014 versus 2013 without any change in iron ore price?

Hi, Mitesh. You kind of broke up a little bit. Can you repeat your question, please? Mitesh Thakkar - Friedman, Billings, Ramsey & Co., Inc.: Yeah, I'm sorry. So without getting into the details of the Essar contract, can you help us – how should we think about 2014 pricing versus 2013 pricing if there is no change in iron ore price?

Well, I don't think we ever commented that there would not be a change in iron ore prices. With all of our pricing mechanisms throughout all of our contracts, and Essar is no different, it all has unique features on lead and lag, it's got some world pricing components in it. It's got the CPI index as it goes in and out. So, the pricing will continue to move as well as the elements within the contract. So, the pricing will move and it will move within the designated piece of that move around in that contract.

Yeah. Mitesh, as you know because of the way we have those contracts structured, it makes us less sensitive to all the price changes during each quarter and the year. Mitesh Thakkar - Friedman, Billings, Ramsey & Co., Inc.: Okay. And this will not allow that sensitivity to go higher; it would probably be the similar sensitivity?

Yeah, that number should be similar. Mitesh Thakkar - Friedman, Billings, Ramsey & Co., Inc.: Okay. And just one follow-up question. When you think about your Australian costs, obviously a very good job there, how much of that was a currency-related tailwinds and how much of that was productivity and how much of that is sustainable? Can we sustain cost at these line of levels for next couple of years are – of course I understand that if iron ore prices go higher, inflation will walk into it but just all else equal?

Yeah, the currency change in Australia has just occurred, if you will, I would say even within the quarter to see those drops, so there's not a lot of currency fluctuation in this quarter. Certainly if it holds up, it will have a different effect on the cost that they go in Australia. We did hit the higher stripping ratios last year that we talked about that we think we can maintain or even lower. So that was the big bump up in the costs from a year ago and we think we've also got the great stabilize now into the 60% to 60.5% Fe as well and we don't see further decline at this point coming out of the deposits. It won't be to 62.5 that we delivered in the past and I think we discussed that in our previous calls and on our tours with the analysts, but we think we can sustain with inside of inflation the costs that you currently see through the remaining life of the mine. Mitesh Thakkar - Friedman, Billings, Ramsey & Co., Inc.: Great. Thank you very much, guys.

Thank you.

Thank you. Our next question comes from the line of Brian Yu from Citi. Your question please.

Yeah, thanks and congrats on a good quarter too.

Thank you.

My first question is with the West Pit, you talked about ore availability. Could you elaborate on that a little bit more in terms of is this access to the West Pit hematite or are you seeing variability in that section of it too?

We are seeing a little more variability in that section than we saw. I mean the good news is it's a much more friable than it goes through, so it crushes very well and the mill throughput works very well with it. But on the other nuances of the chemistry in the iron, it is a little more variable than we had anticipated when we went into it and that's why we need to strip a little more. Even in the West Pit we've got to get a couple more open spaces so that we can blend even the West Pit in with the other two pits. So, we're working our way through it. We're giving ourselves as much optionality in those pits with open places for blending as we run into it and we're still learning through all the modeling and now putting it through the mill as to which characteristics work best.

Yeah, okay. And is it fair to assume that until that you get this ore variability under control or resolve that and that phase two is the concentrator is unlikely to proceed?

No, I wouldn't say that at all. I would think – again our teams are very confident they're going to get this ore variability under control. That's what we do. I mean these ore grades in this pit are no more complex than the pits we have in Michigan or Minnesota or certainly the blending challenges we have in Western Australia if you've ever seen that operation, it just takes some time to work out. I think more of the phase two type of decision will be more on the marketplace and where we think it is where we think future pricing will be when we do the outlook and then the overall IRR that's left – with some capital left on the project. So I would put it lesser on debt and I would put it more on the external environment in the marketplace.

Okay. That’s helpful. Thanks.

Thank you. Our next question comes from the line of Timna Tanners from Bank of America. Your question please.

Hi. Thank you. I know it’s been a long weekend, maybe these are dense questions, but I just wanted to know in terms of the additional CapEx, how much if any additional volume might come from that and how much is left to decide on Phase 2 for the completion of the project, how much is up in the air?

Well, as we said Timna, with this whole – the increased hitting in additional volume this year on the outlook that we just gave where we’ve lowered the volume that goes with it. We think that’s the right place to be. We don’t anticipate an uptick obviously or we’d change the outlook. Again it’s more just getting that stripping well ahead of us on the cash side, so that we can get the product go out of the mine and goes with it from there. I think the – in round numbers the finishing of the concentrator and the load out are around $450 million or so to finish that segment up if again we decided to go forward with the completion of Phase 2.

Okay. And then as a follow-up, Terry in his final comments was making the point that there is a lot of decisions to come in the next couple of months; so I was wondering if you could describe for us what those balls are up in the air and how to think about the decisions? Will they be primarily about the market view and about priorities? I know again with the change in management that they will not be decisions of the current management team, but what are those balls in the air and what do you think will be the deciding factors? Thanks.

Well, I think certainly the market, we all continue to assess that as we could too and make sure we have operating plans and contingency plans in place for if pricing is to go into consensus where the analysts are that are putting the reports out to go with it. Balls in the air, certainly Phase 2 as you just mentioned from there, the Wabush decision based on the operating strategy and the implementation that goes with it. We certainly have the FerroChrome decisions after we finish the feasibility, and once we work through our governmental issues with both road funding and power supply that goes with that and getting the MOU that goes with it. And on the upside of it is certainly the DR type of work that we continue to talk about, about Northshore. We continue to be in early stage conversations with a number of potential folks to supply for DR, and that continues on with the natural gas. And I think those are some decisions we will need to – hopefully we’ll need to make on the very upside on DR production in the remaining part of this year.

Okay. Thank you.

Thank you. Our next question comes from the line of Evan Kurtz from Morgan Stanley. Your question please.

Hi. Good morning, everyone.

Good morning.

Good morning.

I just wanted to get some color on how currency might have helped you out in Australia this quarter, if you could break that out as far as cost declines and just maybe an update on your hedging position for the Australian dollar?

Yes, so from the way we’re looking at it for the quarter and year-to-date essentially with maybe a couple of dollar benefit in the cost structure. The way I will look at it going forward from a hedging standpoint is we do have an active hedging policy where we will take a certain portion of our costs and hedge the currency. But from a sensitivity standpoint, I kind of look at in our plan going forward we essentially have the currency for Australian dollar and U.S. dollar at parity. So any sort of percentage change after that sensitivity would be probably $0.50 to $0.75 on a per ton basis going forward for rest of year.

Great. That’s helpful. Thanks. And then maybe just a question on CapEx; could you maybe just -- I know you’re probably not ready to give 2014 guidance, but just talk about some of the big moving pieces to think about for next year on CapEx, with this incremental $200 million being spend at Bloom Lake this year on tailings, is that the entire cost of the tailings project or is some of that going to bleed into next year and may be some of the other pieces there? Thanks.

It will continue to bleed in the sustaining capital portion of Bloom Lake, it’ll probably run at about $200 million a year and that will probably be over a time period of the next five years. I would suspect sustaining capital will probably run more in the $500 million range in the future when you put that $200 million into what we typically run in a sustaining capital range, an area that goes from there. So the big kicker on the rest of the capital outside of sustaining is really around Phase 2. We don’t have any other expansion plans the best point in time. The early indicators on Northshore if we were to go into a DRI, a conversion number one is the building of a DRI facility with these several years out before we would even think about spending the capital. There’s no reason to convert in 2014, I wouldn’t think it would be a nice thing to do if we could, but the capital is pretty the minimus that we see right now at Northshore. So, not a lot of growth capital out there, other than the opportunity of Phase 2 if that were to come over the top of the sustaining capital.

Great. Thanks for taking my question.

Thank you. Our next question comes from the line of Curt Woodworth from Nomura. Your question please.

Yes, hi, good morning everyone.

Good morning.

Good morning.

I just had a question more on the Bloom Lake cash cost progression. Joe, I know that earlier in this year you had talked about $15 per ton headwind from deep ripping water management and some other activities and it seemed like part of the ability to get that headwind down was leveraging Phase 2. So, I guess my question is, is if the – to kind of keep it at the current 7 million ton target, what do you think the normal headwind or cash cost estimate should look like going forward in the next year?

So, Curt I think we talked in the past with 7 million ton just Phase 1 that we would be looking at a range of $70 to $75 cash cost. I think with, what we are looking at now we’re probably going to have to increase that a little bit probably to the mid 70’s versus the $70 to $75 based on so what we expect from a performance standpoint in that now.

But that would only be Terry, if we’re at lower volumes, but today’s volumes are like 6 million tons, $70 to $75 is still intact …

6 to 7 million tons, right.

So, no change from that, Curt.

So in terms of taking the cost guidance up right now versus what you think is going to happen next year; what are the current moving pieces that would get you down to that $75 level for next year?

Well the biggest part was again, we increased the stripping once again just to get further ahead of it. So that is the moving piece to bring it down, and the guys continue to manage the contractors better and get those moving parts out of the way. The overland conveyor, the ore-barn and the in-pit crusher when that comes on in the very last part of the year we’ll cut down on trucking and cut some haulage cost down as it comes from there and again looked even with the tailing facility we’ll do a lot more pumping and be more efficient than we were with trucking. So there’s two or three pieces that will fundamentally bring that down and of course when we get rid of the excess stripping go to a normal strip rate that will combine also to bring the cost-per-ton down.

And then, are there any other kind of additional costs for either Phase 2 or other issues that would cause the kind of aggregate number to be higher than that for the Bloom Lake segment next year?

Non that we see, I mean the concentrator is at about a 65% completion rate, the load out is identical to the one that’s on Phase 1, and it does not have to be put in sequence to start the concentrator up. It can be blended in as it ramps up from there. And the new ship loader is intact to come on in 2014 as well which will lower demurrage as we can improve our -- both the weight of what we can put on the vessel as well as our loading times.

There might be just some spikes in cash cost in a particular quarter it's just related to ramp up, volume obviously the first quarter you start, you’re not pretty using your targeted run rate of 1.8 million tons a quarter. So there could be a little spike related to that.

Yeah, and I think also the stripping ratio is going to be higher than the life of the mine, next year it's going to roll into next year for a period as well.

Okay. And what's the expectation on getting to the targeted volume level time wise?

Well, we’re looking at evaluating that, the ramp up of Phase 2 and we’ll let you guys know on the future quarters as we kind of look through those strategic priorities right now.

Okay. Thanks a lot.

Thank you. Our next question comes from the line of Jason Brocious from KeyBanc Capital Markets. Your question please.

Hi. Good morning, guys.

Good morning.

I just wanted a little clarity around the sustaining CapEx comment you made, Joe. So regardless of any decision to go forward on phase two, it's now expected that sustaining capital would be at the $500 million level?

I think that's a range for 2014. Again, as the previous caller asked if – again, we're just beginning our planning into the new year with that and that number will get refined as well. So I wouldn't just check it off, if you will. I'm trying to give you as sensible a range as I possibly can. Obviously the management team is going to work everything within their power to continue to lower even sustaining capital. But if you want a benchmark to start with, that's what I would use. There would be a lot of discussions between now and year end before the Board signs off and finalizes our capital plan, but that's a good range that you could use to get started with.

Okay, all right. And any update you can give on the – I know last quarter you talked about a proposed extraction tax in Québec and I was wondering if you can give any update on that?

Yeah, that extraction, they call it Québec mining tax is – it's been implemented but it has not been enacted yet. We think the impact to us is going to be pretty minimal, clearly immaterial to us going forward based on how we understand it's going to work.

Okay, so it's no longer 5% of revenue type arrangement?

No, it's a percentage off of the profits at the mine, so you get the – your expenses, depreciation essentially becomes a pretty de minimis tax for us.

Okay, all right. And then just a couple modeling questions too. Could you give us just the cost of freight from Eastern Canada to China during the quarter and then also to Europe, just to get a handle on what those levels were?

The cost to China was around $26 and to Europe was…

Probably in the range of $12 to $15…

$12 to $15.

Okay, all right. And what does that compare to last year at this time, 2Q '12?

Last year it was on 28 – I think it was $28. I think our 12 months trailing, Jason, is on Eastern Canada, so China – north China's around $28, $29.

Yeah. We'd like that $30 kind of what I recall.

Okay, all right. And then to Europe, it's generally stable at 12 to 15 over time?

Yeah, it's pretty stable in Europe.

Okay, great. Well, thank you very much, guys.

Thank you.

Thank you. Our next question comes from the line of Luke MacFarlane from Macquarie. Your question please.

Hi, guys. How are you?

Hi there.

Hi. So, I just wondering can you talk about the level of contract liability that you've got at Bloom Lake currently? And then how that will change in the second half as you ramp-up these additional works?

I'm sorry; I don't have numbers for you, Luke. As they go forward from there, I can tell you we – again, when we made the decision to delay Bloom Lake, obviously we pulled a lot of those contractors out and we continue to bring more of our own workforce in to do the different parts of the work as you would in any new facility. But I don't have any numbers for you.

Yeah, Luke, but I can tell you though that we're actually very focused in on a number of contracts what they're working on to continue to make sure that they're working efficiently and effectively. So we've taken real dollars out of the cost profile as a result of that improved process, if you will.

Sure, but in general, do you think – you obviously expect that to go up in the back half? I'm not eyeing a specific number, but I mean you think it will increase as opposed to being out or bring your own people in?

No, I don't think outside of our guidance. I think it will stay right within the guidance and what we gave with the increase in the guidance in Bloom.

Sure. Okay, cool. And then just another question on your coal business. Are you exporting any of that? And if so, how much and what percentage of met and high vol are you exporting?

So we generally – rule of thumb we export about 50-50, 50% domestically and for the most part we stay in the Atlantic Basin. Europe is the biggest export market. We do, do a little bit to South America. But our primary export market is Europe. I don't think we've done any boats to China this year. We did a couple last year but none to China this year. It's just not favorable for us and we're able to sell in our domestic market. Again, the mix on the high vol, we just don't have that much of it. I couldn't give you percentages of high vol to low vol, but I would expect most of the tonnage because Oak Grove is all – almost all exported and low vol that the majority of the material would be low vol going to the export market.

And then lastly if I can, what sort of impact would be the abolishment of the Australian, natural resources tax down there to with your Australian operation?

It’s been very little impact to us so far. I could tell you that we’ve had very little MRRT tax paid this year or even accrued from that standpoint, a couple of million bucks at the more or so, that with the – sort of the opening value of that, that we’ve a quite a few allowances that we don’t we think – we don’t expect to pay any of that tax in the near-term.

Okay, great. Thanks.

Thank you. Our next question comes from the line of Jorge Beristain from Deutsche Bank. Your question please.

Hi guys. Jorge with Deutsche Bank. Sorry, I joined a bit late. But my question Joe, if you could kind of give us any guidance as to the 2014 volume outlook for the U.S. legacy operations where of some potential mine shutdowns and I just wanted to know if you could kind of give us a ballpark if we’re looking at maybe 2 million tons of attrition into 2014?

We are just not there yet. We haven’t given any guidance Jorge. Unfortunately, sorry about that, but as nominations come in, which is much later in the year partnership meetings take place. I mean, there is a design formula that goes with 2014. We’re just not prepared to give the guidance yet.

Okay. But the Empire Mine, when is that slated to close?

It’s slated at the end of ’14. So it will have another production year, next year and again as you know our partner in that, the minority partners ArcelorMittal, so we will work through the remaining life of that mine on scheduling the tonnage just like we did this year. We said, we expect to restart Empire, the middle of this quarter and probably run it through the year and if their demand keeps up, we will just keep it running. But in this last year of going into the production, we will have to work with the scheduling of it with Arcelor.

Okay. And just in terms of a kind of top level question. How should we think about your portfolio management going forward? You’ve had some non-performing assets, such as in the coal business for some time and clearly you’ve a high net debt load now. What’s the thought process at the Board in terms of how Cliffs is going to look going forward? Do they want to maintain the current portfolio that you have of coal and iron ore or is there some thought process to streamline the Company back to your core iron ore competencies?

I think we’re constantly and in conjunction with the Board. Management is constantly looking at scenarios based on the future of the marketplace and what it looks like and where pricing estimates go with as well as operating parameters go in. And as you know, I don’t think anything is off the table. We try and keep a very open mind around this Company and the most effective way possibly we can for the shareholders as it goes forward. But I don’t think there is anything that’s been cast in stone and I don’t think anybody wants to roll us back to just a North American Iron Ore operation either Jorge, but we’re constantly looking at our operations and the future as well to see what’s the appropriate thing to do.

Okay, great. Thanks, Joe.

Jonathan, we think we have time for one last call or question.

Certainly. Our final question comes from the line of Tony Rizzuto from Cowen and Company. Your question please.

Hi to everybody.

Hi. Good morning, Tony.

Just a couple of questions, and thanks so much for all the color today. I just want to find out where your strip ratios are today and where are they likely to be in 2014 and what are your targeted levels at Bloom Lake? And then I have a follow-up question too.

Yeah, I think I can take you through that detail offline Tony.

Thank you, Jessica. All right, offline?

Yes.

Yeah, I will take you – yeah.

All right. Thanks for that. Then the other question I had is that Quebec mining tax is there a sliding scale, typically these taxes do have some variable nature relative to the commodity prices. Is that part of that too?

Yeah. It’s a little bit. There is actually – there is two calculations we do, and I won’t get into the detail, I guess we can get in the detail offline, but there is two calculations and you take the greater of, and it’s based on your profits at the mine that which will be impacted by pricing of course.

I think like all these factors Tony there, none of them are simple. There is some complicated language in the computations that Terry is talking about and since we’re just into it, it hasn’t even quite been implemented yet. We’re still working through those details, but sure just would be happy to give you the color around that as well.

All right. I just wanted to – I think on the stripping, you guys have previously talked about that the stripping, the higher stripping has added pretty significantly your costs and I think the number you’ve used in the past I think may be its been about $10 to $15 a ton, is that correct.

That’s correct, yes.

Okay. All right. Thanks very much.

Okay. Thanks.

Thank you everybody for joining us for today’s call. As always, I’ll be available throughout the day for any follow-up questions that you may have.

Thank you.

Thank you, ladies and gentlemen, for your participation in today’s conference. This does conclude the program. You may now disconnect. Good day