THIS AGREEMENT, entered into, dated and effective as of April 10, 2002

("Agreement"), by and among THE CLEVELAND-CLIFFS IRON COMPANY, an Ohio

corporation ("Iron"), CLIFFS MINING COMPANY, a Delaware corporation ("Mining"),

NORTHSHORE MINING COMPANY, a Delaware corporation ("Northshore"), NORTHSHORE

SALES COMPANY, an Ohio corporation ("Sales"; Iron, Mining, Northshore and Sales

being collectively referred to herein as "Cliffs"), INTERNATIONAL STEEL GROUP

INC., a Delaware corporation ("ISG"), ISG CLEVELAND INC., a Delaware

corporation, ("ISG Cleveland"), and ISG INDIANA HARBOR INC., a Delaware

corporation ("ISG Indiana Harbor"; ISG, ISG Cleveland and ISG Indiana Harbor

being collectively referred to herein as "Steel").



                                    RECITALS



         WHEREAS, Cliffs desires to sell to Steel and Steel desires to purchase

from Cliffs certain quantities of grades of iron ore standard pellets as

follows: (i) such grades of iron ore standard pellets being those produced at

the Empire Iron Mining Partnership iron ore pellet plant ("Empire Pellets"),

located in Palmer, Michigan ("Empire Mine"); (ii) such grades of iron ore

standard pellets being those produced at the Northshore Mining Company iron ore

pellet plant ("Northshore Pellets"), located in Silver Bay, Minnesota

("Northshore Mine"); (iii) such grades of iron ore standard pellets being those

produced at the Hibbing Taconite Company Joint Venture iron ore pellet plant

("Hibbing Pellets"), located in Hibbing, Minnesota ("Hibbing Mine"); or (iv)

such other pellet grades as may be mutually agreed to by the parties hereto

(such Empire Pellets, Northshore Pellets, Hibbing Pellets, and other mutually

agreed upon pellets collectively being referred to herein as "Cliffs Pellets"),

all on the conditions contained herein.



         NOW, THEREFORE, in consideration of the mutual covenants hereinafter

set forth, Cliffs and Steel agree as follows:



SECTION 1. DEFINITIONS.



         The terms quoted in the above parentheses of the first introductory

paragraph of this Agreement and the WHEREAS clause, other terms quoted

throughout this Agreement, and the terms defined below in this Section 1 shall

have the meanings assigned to them for purposes of



{PAGE}





this Agreement. Attached as Appendix I to this Agreement is a locator list of

all defined terms used throughout the Agreement.



         (a)      The words, "Steel's Annual Pellet Tonnage Requirements", as

used herein, shall mean for any year a tonnage amount equal to Steel's total

annual iron ore pellet tonnage requirements required for consumption in Steel's

iron and steel making facilities in any year at ISG Cleveland, located in

Cleveland, Ohio ("Cleveland Works") and at ISG Indiana Harbor, located in

Indiana Harbor, Indiana ("Indiana Harbor Works").



         (b)      The word "pellets", as used herein, shall mean iron-bearing

products obtained by the pelletizing of iron ore or iron ore concentrates,

suitable for making iron in blast furnaces.



         (c)      The word "ton", as used herein, shall mean a gross ton of

2,240 pounds avoirdupois natural weight.



         (d)      The words "net ton", as used herein, shall mean a ton of 2,000

pounds avoirdupois natural weight.



         (e)      The word "year", as used herein, shall mean a calendar year

commencing on January 1 and ending December 31.



         (f)      The words "shuttle tons", as used herein, shall mean pellets

which are destined for Cleveland Works deliveries, which are first unloaded from

vessel onto a dock which is not a Steel dock or a dock designated by Steel

pursuant to Section 8(a).



SECTION 2. SALE AND PURCHASE/TONNAGE.



         During each of the years 2002 through 2016, and each year thereafter as

long as this Agreement remains in effect, Cliffs shall sell and deliver to Steel

and Steel shall purchase and receive from Cliffs and pay for a tonnage of Cliffs

Pellets which tonnage shall be equal to Steel's Annual Pellet Tonnage

Requirements for each such year.



SECTION 3. QUALITY.



         (a)      Cliffs Pellets when loaded for shipment will be consistent

with the typical specifications and analysis limits set forth in Exhibit 1.



         (b)      In the event the monthly average vessel analysis exceeds one

standard deviation as set forth in Exhibit 1, Cliffs will take such actions as

shall be necessary to achieve specification conformity. If specification

conformity cannot be achieved, Steel and Cliffs shall negotiate in good faith to

determine what actions or remedies, if any, are appropriate. If any two vessel

shipments made during any calendar month have analysis that exceeds the analysis

limits in the specifications set forth in Exhibit 1, Steel may refuse any

subsequent vessel shipments during that calendar month, and Steel shall not be

required to accept any subsequent shipments until Cliffs has taken action to

remedy the non-conformity so that future shipments will be within the analysis

limits. If more than two vessel shipments made during any calendar month have



                                       2



{PAGE}



                               CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED

                                    SEPARATELY WITH THE SECURITIES AND EXCHANGE

                                     COMMISSION. ASTERISKS DENOTE SUCH OMISSION.



analysis that exceeds such limits, Cliffs and Steel shall negotiate an

appropriate cost adjustment (if any) for the cargoes in excess of the first

cargo that exceeded the analysis limits, based upon the additional costs (if

any) to Steel associated with the quality specifications in the additional

vessel shipments made during that calendar month that exceeded such analysis

limits.



         (c)      Shuttle tons from the Cleveland Bulk Terminal shall be sampled

and analyzed for the - 1/4" size fraction as they are being loaded into a vessel

for delivery to Steel's dock. Shuttle tons shall not have a significant increase

in the - 1/4" size fraction versus the non-shuttle tons delivered to the

Cleveland Works pursuant to Section 8(a). In the event that two shuttle tons

vessel shipments during any month display an increase in the - 1/4" size

fraction of [* * * *] or more versus non-shuttle delivered tons, Steel and

Cliffs shall meet to determine the cause of the significant increase and the

corrective action to reduce the significant increase. If a corrective action

cannot be implemented to reduce the - 1/4" size fraction below the [* * * *]

increase, then Steel and Cliffs shall meet to work out a good faith adjustment.



SECTION 4. NOTIFICATION AND NOMINATION.



         (a)      With respect to the tonnage of Cliffs Pellets to be purchased

by Steel for the year 2002, as provided in Section 2, on or before April 30 of

the current year, Steel shall notify Cliffs in writing of Steel's preliminary

tonnage of Steel's Annual Pellet Tonnage Requirements which Steel shall purchase

from Cliffs. Such notification shall include: (i) Steel's Annual Operating Plan

for the balance of the current year detailed by months, as such Annual Operating

Plan relates to Steel's planned monthly consumption of all pellets for such

year; (ii) the tonnage of Cliffs Pellets which Steel expects to purchase in the

current year from Cliffs; and (iii) Steel's planned monthly pellet consumption

for the first four months of the year 2003.



         (b)      With respect to the tonnage of Cliffs Pellets to be purchased

by Steel for each of the years 2003 through 2016, as provided in Section 2, on

or before November 1 of each of the years prior to the years above, Steel shall

notify Cliffs in writing of Steel's preliminary tonnage of Steel's Annual Pellet

Tonnage Requirements which Steel shall purchase from Cliffs. Such notification

shall include: (i) Steel's Annual Operating Plan for the following year detailed

by months, as such Annual Operating Plan relates to Steel's planned monthly

consumption of all pellets for such year ("Steel's AOP"); (ii) the tonnage of

Cliffs Pellets which Steel expects to purchase in the following year from

Cliffs; (iii) Steel's expected total pellet inventory as of December 31 for the

then current year; (iv) Steel's planned total pellet inventory on December 31

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