What changed in CLEVELAND-CLIFFS INC.'s 10-K — 2023 vs 2024

We are the largest supplier of steel to the automotive industry in North America and serve a diverse range of other markets due to our comprehensive offering of flat-rolled steel products. Headquartered in Cleveland, Ohio, we employ approximately 28,000 people across our operations in the United States and Canada.

Our electrical steel business is expected to continue achieving strong profitability in the coming years.

During the second half of 2023, we commissioned our NOES expansion at our Zanesville facility, which increased our annual capacity by approximately 70,000 net tons. 4 | CLF 2023 FORM 10-K Table of Contents We are the first and the only producer of HBI in the Great Lakes region.

Construction of our Toledo direct reduction plant was completed in the fourth quarter of 2020 and reached full run-rate nameplate annual capacity of 1.9 million metric tons during the middle of 2021.

These contracts reduce volatility and allow for more predictable through-the-cycle margins. In addition to our fixed price contracts, we also sell significant volumes under index-linked contracts, which reduces our reliance on spot sales and allows us to improve our efficiency with increased volumes.

TAKE ADVANTAGE OF OUR U.S.-CENTRIC, INTERNALLY SOURCED SUPPLY CHAIN The ongoing conflict between Russia and Ukraine has reinforced the unique advantage of our vertically integrated business model. Two-thirds of U.S. imports of pig iron, a critical raw material for flat-rolled EAFs, had historically been sourced from Russia and Ukraine.

This supply remains largely disrupted, driving volatility in input costs and reducing availability for our competitors’ ferrous inputs. We, on the other hand, produce our pig iron and liquid steel entirely in the U.S., supported by internally sourced iron ore and HBI and supplemented with internally sourced scrap.

In addition, our internally produced pig iron is more environmentally friendly than imported pig iron, which is often made from sintered iron ore fines and with higher coke rates, for example.

While competitors are forced to rely on suppliers who are subject to unpredictable disruptions in their ability to supply materials, we are able to take advantage of our vertically integrated footprint. We began construction of our Toledo direct reduction plant in 2017, in part because of the uncertainty of the industry sourcing metallics from Russia and Ukraine.

Russia had previously invaded the Crimea peninsula in 2014, and we saw a need for more on-shore metallics capacity in the U.S. HBI, which is a lower-carbon alternative to imported pig iron, continues to be a critical component of our decarbonization strategy.

The indefinite idle reduced our operational blast furnaces from eight to seven. Our strategic use of HBI in our blast furnaces and maximizing scrap usage in our BOFs has allowed us to achieve the same steel production with one less blast furnace in our footprint.

During the second quarter of 2023, it was announced that we entered into long-term state mineral leases for more than 2,600 acres of iron ore at the Nashwauk mine site in Itasca County, Minnesota. The award of these leases is expected to resolve years of uncertainty regarding Hibbing Taconite’s mine life.

This ore body is intended to serve as an extension of Hibbing Taconite, as the state’s mineral leases, combined with our own private mineral holdings at Nashwauk, are expected to provide more than two decades of additional ore reserves.

One of the most important issues impacting our industry, our stakeholders and our planet is climate change. In early 2021, we announced our commitment to reduce GHG emissions 25% from 2017 levels by 2030.

Since 2017, we have reduced our absolute emissions by 32% from 44 million metric tons to 30 million metric tons of CO 2 e in 2022. In May 2023, we completed a successful blast furnace hydrogen injection trial at Middletown Works.

During the trial, hydrogen gas was injected in all 20 tuyeres at the Middletown #3 blast furnace, facilitating the production of clean pig iron.

In this trial, hydrogen served as a partial substitute for the fossil fuels necessary for iron reduction, ultimately replacing the release of CO 2 with the release of H 2 O (water vapor) with no impact to product quality or operating efficiency.

We recently commissioned a pipeline and successfully completed a hydrogen injection trial at our Indiana Harbor blast furnace #7. This follows an initial similar trial of hydrogen at our blast furnace in Middletown earlier in 2023.

We expect to have ample opportunities to reduce our debt and return capital to shareholders with our own free cash flow generation in the coming years. It is also important for us to maintain sufficient liquidity. Our liquidity as of December 31, 2023 of $4.5 billion is the highest in our Company’s history.

Refer to Part I - Item 2. Properties for additional information.

PRODUCTS AND MARKETS 2023 Product Mix (By Revenue) Primary Products ◦ HOT-ROLLED ◦ STAINLESS AND ELECTRICAL ◦ OTHER ◦ COLD-ROLLED ◦ Scrap ◦ COATED ◦ GOES ◦ Iron Ore ◦ Aluminized ◦ NOES ◦ HBI ◦ Electrogalvanized ◦ Auto Chrome ◦ Coal ◦ Galvalume ◦ PLATE ◦ Coke ◦ Galvanneal ◦ SLAB AND OTHER STEEL PRODUCTS ◦ NON-STEELMAKING ◦ Hot-dipped Galvanized ◦ Stamped Components ◦ Tinplate ◦ Slab ◦ Tool and Die ◦ Rail ◦ Tubing ◦ Blooms ◦ Cast Ingots As a fully integrated steel enterprise, we have a comprehensive portfolio of steel solutions.

We primarily sell our products to customers in four broad market categories.

The following table presents the percentage of our revenues to each of these markets during the year: Market Primary Products Sold to End Market 2023 2022 Direct automotive Cold-rolled, galvanized, aluminized, NOES and stainless 36 % 31 % Infrastructure and manufacturing Hot-rolled, cold-rolled, galvanized, plate, GOES, stainless, tinplate and rail 26 % 26 % Distributors and converters All grades of steel 25 % 28 % Steel producers Slab, scrap, iron ore, HBI, coal and coke 13 % 15 % The change in percentages of revenues to each market in 2023, compared to 2022, was driven primarily by the increase in volumes and in selling prices for our fixed price contracts to the direct automotive market, lower pricing on index-linked sales, and lower pricing on spot sales.

Additionally, our sales to the direct automotive market increased as prior supply chain issues eased and light vehicle production in North America reached the highest level since 2019. We sell our products principally to customers in North America. Approximately 40-45% of our flat-rolled steel shipments are sold under fixed base price contracts.