UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 26, 2008

CLEVELAND-CLIFFS INC
(Exact Name of Registrant as Specified in Its Charter)

 
					
OHIO	 	1-8944	 	34-1464672	
(State or Other Jurisdiction
of Incorporation)	 	(Commission File Number)	 	(IRS Employer
Identification No.)	

1100 Superior Avenue, Cleveland, Ohio	 	44114-2544	
(Address of Principal Executive Offices)	 	(Zip Code)	
Registrant’s Telephone Number, Including Area Code: (216-694-5700)
Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 

			
ITEM 7.01.	  	    Other Events	
On August 26, 2008, Portman Limited (“Portman”) filed with the Australian Stock Exchange its unaudited half year report for the period ended June 30, 2008. The “Half Year Report for the Half-Year Ended June 30, 2008” is contained in Item 9.01 as exhibit 99(a) on Form 8-K and is incorporated into this Item 7.01 by reference. The information on this Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or incorporated by reference in any filing under the Securities Act of 1933, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

ITEM 9.01.	  	    Financial Statements and Exhibits.	
		
	  	    (d) Exhibits:	

Exhibit
Number	  	Exhibit	 	 	
99(a)	  	Portman Limited filed with the Australian Stock Exchange the “Half Year Report for the Half-Year Ended June 30, 2008” on August 26, 2008	 	  Filed
  Herewith	

SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	 		 	CLEVELAND-CLIFFS INC	
					
	 		 	By:	  	    /s/ George W. Hawk, Jr.	  		
	 		 	Name: George W. Hawk, Jr.	  		
	 		 	Title:   General Counsel and Secretary	  		
Dated:            August 27, 2008

INDEX TO EXHIBITS

Exhibit
Number	    	Exhibit	 	 	
99(a)	    	Portman Limited filed with the Australian Stock Exchange the “Half Year Report for the Half-Year Ended June 30, 2008” on August 26, 2008	 	  Filed   Herewith	

Exhibit 99(a)

	 		 		 		  		
						
	 		 		 		  	Portman
Limited	  		
						
	 		 		 		  	ABN 22 007 871 892	  		
26 August   2008	 		 		 		  		  		
	 		 		 		  	Level 11
The Quadrant
1 William Street
Perth 6000
Western Australia
GPO Box W2017
Perth, 6846
Tel:   61 8 9426 3333
Fax:  61 8 9426 3344	  		
(21 pages in total)
The Announcements Officer
Australian Stock Exchange (Sydney) Limited
Level 10
20 Bond Street
SYDNEY NSW 2001

	 		 		 		  	Electronically Lodged	  		
Dear Sir
Please find attached the Half Year Report for the half-year ended 30 June 2008.

Yours faithfully	

C M Rainsford	
Company Secretary	
PORTMAN LIMITED	

PORTMAN LIMITED
A.B.N. 22 007 871 892
HALF YEAR REPORT
FOR THE HALF-YEAR
ENDED 30 JUNE 2008

Contents
 	  	Page
 	
Corporate Directory
 	  	2
 	
Highlights
 	  	3
 	
Directors’ Report
 	  	5
 	
Auditor’s Independence Declaration
 	  	9
 	
Independent Review Report
 	  	10
 	
Directors’ Declaration
 	  	12
 	
Condensed Financial Statements
 	  	 	
Consolidated Income Statement
 	  	13
 	
Consolidated Balance Sheet
 	  	14
 	
Consolidated Statement of Changes in Equity
 	  	15
 	
Consolidated Cash Flow Statement
 	  	16
 	
Notes to the Half-Year Financial Statements
 	  	17

			
PORTMAN LIMITED	  		
A.B.N. 22 007 871 892	  		
CORPORATE DIRECTORY	  		
		
REGISTERED OFFICE	  	TREASURY ADVISER	
		
Level 11 The Quadrant	  	Oakvale Capital Limited	
		
1 William Street	  	Level 3, 50 Colin Street	
		
Perth Western Australia 6000	  	WEST PERTH WA 6005	
		
Telephone: 61 8 9426 3333	  	Telephone: 61 8 9460 5300	
		
Facsimile: 61 8 9426 3344	  		
		
Internet:    www.portman.com.au	  	BOARD OF DIRECTORS	
		
	  	Joseph A. Carrabba	
		
AUDITORS	  	Chairman	
		
Deloitte Touche Tohmatsu	  	Richard R. Mehan	
		
Woodside Plaza, Level 14	  	Managing Director	
		
240 St Georges Terrace	  	Laurie Brlas	
		
Perth WA 6000	  	Non-Executive Director	
		
Telephone: 61 8 9365 7000	  	William R. Calfee	
		
	  	Non-Executive Director	
		
BANKERS	  	Donald J. Gallagher	
		
Commonwealth Bank of Australia Limited	  	Non-Executive Director	
		
150 St Georges Terrace	  	David H. Gunning	
		
Perth WA 6000	  	Non-Executive Director	
		
Telephone: 61 8 9482 6325	  	Malcom H. Macpherson	
		
	  	Non-Executive Director	
		
National Australia Bank Limited	  	Michael D. Perrott	
		
50 St Georges Terrace	  	Non-Executive Director	
		
Perth WA 6000	  		
		
Telephone: 1300 132265	  	SENIOR MANAGEMENT	
		
	  	Duncan Price	
		
	  	Chief Operating Officer	
		
SOLICITORS	  	Shigeru Fujikawa	
		
Blake Dawson Waldron	  	General Manager - Marketing	
		
Exchange Plaza, Level 32	  	Christopher Hunt	
		
2 The Esplanade	  	General Manager – Finance & Administration and Company	
		
PERTH WA 6000	  	Secretary	
		
Telephone: 61 8 9366 8000	  	Colin Williams	
		
	  	Chief Operating Officer	
		
SHARE REGISTRY	  	Peter Ravenscroft	
		
Advanced Share Registry Services	  	General Manager – Resource Development	
		
110 Stirling Highway	  	Stewart Brown	
		
NEDLANDS WA 6009	  	General Manager – Operations	
		
Telephone: 61 8 9389 8033	  		
 
2

PORTMAN LIMITED
A.B.N. 22 007 871 892
HIGHLIGHTS FOR THE HALF-YEAR ENDED 30 JUNE 2008
Results for announcement to the market
									
 	 	Percentage increase /
(decrease) from previous
corresponding period	 	   	  	$ ‘000	 	   	
					
Revenue from sale of goods	 	54.86%	 		  	412,266	 		
					
Profit for the period	 	140.12%	 		  	137,129	 		
					
Profit attributable to members of the parent entity	 	140.12%	 		  	137,129	 		
					
Amount per security and franked amount per security of final and interim dividends	 	N/A	 		  	N/A	 		
					
Record date for determining entitlements to the dividends
(if any)	 	N/A	 	 	  	N/A	 	 	
Iron Ore Division
Koolyanobbing Project –
 	•	 	Reduced ore and waste movements reflect a conscious decision to reduce in-pit mining in order to deplete Run of Mine (“ROM”) stocks over the next 18 months.	
 	•	 	Ore railed for Q2 08 was in line with the corresponding period in 2007. Rail restrictions related to the re-sleepering project continue to be offset by improvements realised through the ongoing Portman, Australian Railroad Group (“ARG”) and West Net Rail (“WNR”) rail optimisation project.	
 	•	 	The re-sleepering project will be completed during August 08. Procurement and detailed planning for the rail upgrade on the Esperance line will commence at the start of Q3 08. No rail restrictions are envisaged during the rail upgrade project.	
 	•	 	Planning for the plant shutdown in September 08 and the subsequent 8.5Mtpa plant trial is well advanced.	
 	•	 	Study of the potential for expansion of the Koolyanobbing operations beyond 8.5Mtpa has moved from the conceptual stage to the pre-feasibility stage. The pre-feasibility study is planned to be completed during Q2 2009.	
 	•	 	Steady implementation of various programmes aimed at raising organisational capability continues.	
 	•	 	Full year sales forecast for Koolyanobbing remains at 7.7Mt for 2008.	
Cockatoo Island Project -
 	•	 	Stage 3 approvals, both internal and external, have been granted. Accordingly the construction stage of the project has commenced.	
 	•	 	Latest schedules indicate mining on phase 2 will cease during August 08, with shipping continuing until September 08.	
 
3

PORTMAN LIMITED
HIGHLIGHTS FOR THE HALF-YEAR ENDED 30 JUNE 2008
Corporate
Portman’s investment in Golden West Resources (“GWR”) was 19.9% at 30 June 2008. During August the investment was diluted by additional shares in GWR being issued. Portman subsequently increased its investment to 19.2%.
The Company completed an off-market share buy-back with 9.8 million shares being bought back for a total of $143.3 million. The shares were bought back at $14.66 which represented a 14% discount to the volume weighted average price five trading days after announcement.
During the half-year Portman made an agreement with Polaris Metal NL and Southern Cross Goldfields Limited, whereby Portman obtained non-magnetite iron ore rights to a number of tenements in the Yilgarn region, in exchange for unencumbered access to the Bungalbin tenements. Consequently, Portman no longer has any interest in the Helena and Aurora range/ Bungalbin Hill areas.
Settlement of the 2008 benchmark price was reached late in the half-year. Lump settled at 96.5% and fines 80%.
No dividend has been declared for the first half of 2008.
Communications with Government on Environmental Policy are continuing.
Outlook
Portman’s estimate of 2008 production is 8.0 million tonnes comprising 7.7 million from Koolyanobbing and 0.3 million from Cockatoo Island. Sales tonnes are forecast at the same tonnages as production.
 
4

PORTMAN LIMITED
DIRECTORS’ REPORT
FOR THE HALF-YEAR ENDED 30 JUNE 2008
The directors of Portman Limited (“Portman” or “the Company”) submit herewith the financial report of Portman Limited and its subsidiaries (“the Consolidated Entity”) for the half-year ended 30 June 2008. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:
(a)    Directors
The names of the directors of Portman Limited in office during or since the end of the half-year are:
Joseph A. Carrabba
Laurie Brlas
William R. Calfee
Donald J. Gallagher
David H. Gunning
Malcolm H. Macpherson
Richard R. Mehan
Michael D. Perrott
(b) Auditor’s Independence Declaration
The auditor’s independence declaration is included on page 9.
(c) Review of operations
Iron Ore Division
Koolyanobbing Project
Operations January – June 2008
Reduced ore and waste movements reflect a conscious decision to reduce in-pit mining in order to deplete ROM stocks over the next 18 months.
Ore railed for Q2 08 was in line with the corresponding period in 2007. Rail restrictions related to the re-sleepering project continue to be offset by improvements realised through the ongoing Portman, ARG and WNR rail optimisation project.
The re-sleepering project will be completed during August 08. Procurement and detailed planning for the rail upgrade on the Esperance line will commence at the start of Q3 08. No rail restrictions are envisaged during the rail upgrade project.
Planning for the plant shutdown in September 08 and the subsequent 8.5Mtpa plant trial is well advanced.
Study of the potential for expansion of the Koolyanobbing operations beyond 8.5Mtpa has moved from the conceptual stage to the pre-feasibility stage. The pre-feasibility study is planned to be completed during Q2 2009.
Steady implementation of various programmes aimed at raising organisational capability continues.
 
5

PORTMAN LIMITED
DIRECTORS’ REPORT
FOR THE HALF-YEAR ENDED 30 JUNE 2008
Production and shipments for the half-year were as follows:

 
Processed
 	  	 
6 Months Ended
 	  	 
Year Ended 31 December

    30 June 2008        
 	  	 
30 June 2007    
 	  	 
 2007    
 	  	 
 2006     
 	  	 
 2005    

Ore processed
(thousand tonnes)
 	  	3,719	  	3,868  	  	7,624    	  	6,911    	  	5,797  	
 
Ore shipments
(thousand tonnes)
 	  	3,648	  	3,784  	  	7,474    	  	6,704    	  	5,793  	
Cockatoo Island Joint Venture
Operations January – June 2008
Stage 3 approvals, both internal and external, have been granted. Accordingly the construction stage of the project has commenced. Latest schedules indicate mining on phase 2 will cease during August 08, with shipping continuing until September 08.
Production and shipments for the half-year were as follows:

   	  	 
6 Months Ended
 	  	 
Year Ended 31 December

    30 June 2008      
 	  	 
    30 June 2007        
 	  	 
2007  
 	  	 
2006
 	  	 
2005

Ore processed
(thousand tonnes)
 	  	581	  	624  	  	1,380 	  	1,451	  	1,142	
 
Ore shipments
(thousand tonnes)
 	  	640	  	597  	  	1,342 	  	1,452	  	1,124	
All figures shown above are quoted in 100% terms. Portman has a 50% ownership interest in the Cockatoo Island Joint Venture.
Exploration

The information presented below in this report, that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr David C. Fielding, who is a Fellow of the Australasian Institute of Mining and Metallurgy (AusIMM). Mr Fielding is a full-time employee of the company. Mr Fielding has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Fielding consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.
 
Drilling during the quarter included:
 
 	(a)	RC Drill testing of areas of surface enrichment at Perrinvale;	
 	(b)	RC Drill testing of beneficiation targets at Koolyanobbing and Cockatoo Island; and	
 	(c)	RAB and Aircore drilling for detrital iron mineralisation at Koolyanobbing.	
 
6

PORTMAN LIMITED
DIRECTORS’ REPORT
FOR THE HALF-YEAR ENDED 30 JUNE 2008
Koolyanobbing Project Area
A summary of drilling activity is as follows:

 
Prospect	  	 
Type    	  	 
No holes       	  	 
Metres	
 
Koolyanobbing K Deposit	  	 
RC    	  	 
2       	  	 
342	
 
Koolyanobbing	  	 
RAB    	  	 
54       	  	 
810	
 
Koolyanobbing	  	 
Aircore    	  	 
53       	  	 
2,097	
 
Total	  	 	  	 	  	 
3,249	
RC drilling commenced in K Pit to test massive magnetite zones in the footwall to the main orebody. This programme is currently in progress.
RAB and Aircore Drilling commenced to test for the presence of detrital iron deposits. Drilling was confined to existing mine infrastructure. Results have confirmed the presence of iron rich detrital mineralisation.
Highlights of analytical results received during the reporting period include the following significant intercepts:

 
Project  	  	 
Hole ID  	  	 
Depth  	  	 
Dip  	  	 
Azimuth  	  	 
Intercept	  	 
P  	  	 
S  	  	 
Al2O3  	  	 
SiO2  	  	 
LOI  	
 	  	 	  	 	  	 	  	 	  	 
11.0 m @ 58.79 %	  	 	  	 	  	 	  	 	  	 	
WIND  	  	W10RC017  	  	90  	  	-60  	  	3  	  	Fe from 7m	  	0.095  	  	0.109  	  	1.89  	  	5.15  	  	7.67  	
 	  	 	  	 	  	 	  	 	  	 
18.0 m @ 59.82 %
Fe from 23m	  	0.110  	  	0.105  	  	0.94  	  	1.47  	  	7.00  	
 	  	 	  	 	  	 	  	 	  	 
20.0 m @ 62.15 %	  	 	  	 	  	 	  	 	  	 	
WIND  	  	W10RC018  	  	84  	  	-61  	  	3  	  	Fe from 6m	  	0.124  	  	0.040  	  	0.79  	  	2.68  	  	6.25  	
 	  	 	  	 	  	 	  	 	  	 
11.0 m @ 62.00 %	  	 	  	 	  	 	  	 	  	 	
WIND  	  	W10RC019  	  	90  	  	-60  	  	360  	  	Fe from 18m	  	0.120  	  	0.028  	  	1.16  	  	2.33  	  	5.65  	
These results are all from the W10 prospect at Windarling. Follow up drilling is planned at depth to confirm  resource potential of this prospect.
Perrinvale Project
RC drilling was carried out at Perrinvale to test several zones of surface iron enrichment. The programme remains incomplete due to technical drilling issues. Assays confirmed weakly enriched iron formation with no significant zones of mineralisation.

 
Prospect	  	 
Type    	  	 
No. Holes    	  	 
Metres    	
 
Perrinvale	  	 
RC  	  	 
12  	  	 
835  	
 
Total	  	 	  	 	  	 
835  	
Reconnaissance mapping is complete and planning commenced on follow up RC and RAB/Aircore drilling.
Mt Finnerty Joint Venture
Reconnaissance geological mapping was carried out over several target areas as identified from detailed aeromagnetic data.
Botanical and heritage surveys were completed and drilling proposals are in preparation.
 
7

PORTMAN LIMITED
DIRECTORS’ REPORT
FOR THE HALF-YEAR ENDED 30 JUNE 2008
Cape Lambert Joint Venture
No field work was carried out during the quarter.
Cockatoo Island Joint Venture
RC drilling was carried out on hematite rich sandstones which were identified as having potential as feed for a beneficiation project thereby extending the life of the Cockatoo operation.

 
Prospect	  	 
Type    	  	 
No. Holes    	  	 
Meters    	
 
Cockatoo Bene Target	  	 
RC  	  	 
31  	  	 
2,720  	
 
Total	  	 	  	 	  	 
2,720  	
Drill cuttings have been despatched for assay. Based on geology and whole rock assays intervals will be selected for metallurgical testwork.
Corporate
Portman’s investment in GWR was 19.9% at 30 June 2008. During August the investment was diluted by additional shares in GWR being issued. Portman subsequently increased its investment to 19.2%.
The Company completed an off-market share buy-back with 9.8 million shares being bought back for a total of $143.3 million. The shares were bought back at $14.66 which represented a 14% discount to the volume weighted average price five trading days after announcement.
During the half-year Portman made an agreement with Polaris Metal NL and Southern Cross Goldfields Limited, whereby Portman obtained non-magnetite iron ore rights to a number of tenements in the Yilgarn region, in exchange for unencumbered access to the Bungalbin tenements. Consequently, Portman no longer has any interest in the Helena and Aurora range/ Bungalbin Hill areas.
Settlement of the 2008 benchmark price was reached late in the half-year. Lump settled at 96.5% and fines 80%. The price change took effect from 1 January 2008 for Portman’s Chinese customers and 1 April for Japanese customers.
No dividend has been declared for the first half of 2008.
Communications with Government on Environmental Policy are continuing.
(d) Rounding of amounts to nearest thousand dollars
The Consolidated Entity is of the kind specified in Australian Securities and Investments Commission Class Order 98/0100 dated 10 July 1998, and in accordance with that Class Order amounts in the directors’ report and the half-year financial report are rounded off to the nearest thousand dollars unless otherwise indicated.
Signed in accordance with a resolution of directors made pursuant to s.306(3) of the Corporations Act 2001.
On behalf of the Directors

	  		
		
J A Carrabba	  	R R Mehan	
Chairman	  	Director	
26 August 2008	  	26 August 2008	
Perth, Western Australia	  	Perth, Western Australia	
 
8

 
			
	  	Deloitte Touche Tohmatsu	
	  	ABN 74 490 121 060	
		
	  	Woodside Plaza	
	  	Level 14	
	  	240 St Georges Terrace	
	  	Perth WA 6000	
	  	GPO Box A46	
	  	Perth WA 6837 Australia	
		
Independent Auditor’s Review Report
to the Members of Portman Limited	  	DX: 206	
	  	Tel: +61 (0) 8 9365 7000	
	  	Fax:	
	  	www.deloitte.com.au	
We have reviewed the accompanying half-year financial report of Portman Limited, which comprises the balance sheet as at 30 June 2008, and the income statement, cash flow statement, statement of changes in equity for the half-year ended on that date, selected explanatory notes and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the end of the half-year or from time to time during the half-year as set out on pages 12 to 20.
Directors’ Responsibility for the Half-Year Financial Report
The directors of the company are responsible for the preparation and fair presentation of the half-year financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 . This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the half-year financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditor’s Responsibility
Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of an Interim Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 30 June 2008 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of Portman Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.
A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Auditor’s Independence Declaration
In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 .

	  	Member of
Deloitte Touche Tolmatsu	  		
	  		  		
Liability limited by a scheme approved under Professional Standards Legislation.	  		  		
	  		  		
	  		  	9	

Conclusion
Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Portman Limited is not in accordance with the Corporations Act 2001, including:
 
(a)	giving a true and fair view of the consolidated entity’s financial position as at 30 June 2008 and of its performance for the half-year ended on that date; and	
 
(b)	complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.	

	
DELOITTE TOUCHE TOHMATSU	

AT Richards	
Partner	
Chartered Accountants	
Perth, 26 August 2008	
 
10

 
			
	  	Deloitte Touche Tohmatsu	
	  	ABN 74 490 121 060	
		
	  	Woodside Plaza	
	  	Level 14	
	  	240 St Georges Terrace	
	  	Perth WA 8000	
	  	GPO Box A46	
	  	Perth WA 6837 Australia	
		
Portman Limited
The Board of Directors
Level 11, The Quadrant 1 William Street,
PERTH NSW 2000	  	DX 206
Tel: +61 (0) 8 9365 7000 Fax: +61 (0) 8 9365 7001 www. deloitte.com.au	
	  		
26 August 2008
Dear Board Members
Portman Limited
En accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Portman Limited.
As lead audit partner for the review of the financial statements of Portman Limited for the half-year ended 30 June 2008, I declare that to the best of my knowledge and belief, there have been no contraventions of:
 
 	(i)	the auditor independence requirements of the Corporations Act 2001 in relation to the review; and	
 
 	(ii)	any applicable code of professional conduct in relation to the review.	

Yours sincerely	

DELO1TTE TOUCHE TOHMATSU	

AT Richards	
Partner	
Chartered Accountants	

	  	Member of
Deloitte Touche Tolmatsu	  		
	  		  		
Liability limited by a scheme approved under Professional Standards Legislation.	  		  		
	  		  		
	  		  	11	

PORTMAN LIMITED
DIRECTORS’ DECLARATION
FOR THE HALF-YEAR ENDED 30 JUNE 2008
The directors declare that:
 
(a)	in the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable; and	
 
(b)	in the directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the consolidated entity.	
Signed in accordance with a resolution of the directors, made pursuant to s 303(5) of the Corporations Act 2001.
On behalf of the Directors

	 		 		
			
J A Carrabba	 		 	R R Mehan	
Chairman	 		 	Director	
26 August 2008	 		 	26 August 2008	
Perth, Western Australia	 		 	Perth, Western Australia	
 
12

PORTMAN LIMITED
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE HALF-YEAR ENDED 30 JUNE 2008

 	  	 	 	 	  	Consolidated
Half-year ended	
	  		 	 	
 	  	    Notes	 	 	  	30 June
2008
$’000	  	30 June
2007
$’000	

Revenue	  	2(a)	 		  	412,266  	  	266,222  	
					
Cost of sales	  		 		  	(157,686)  	  	(149,717)  	

Gross profit	  		 		  	254,580  	  	116,505  	
					
Other revenue	  	2(a)	 		  	8,657  	  	5,301  	
					
Other income	  	2(a)	 		  	2,268  	  	587  	
					
Shipping and selling expenses	  		 		  	(35,882)  	  	(26,969)  	
					
Marketing expenses	  		 		  	(899)  	  	(941)  	
					
Administrative expenses	  		 		  	(6,198)  	  	(3,740)  	
					
Finance costs	  	2(b)	 		  	(4,033)  	  	(1,871)  	
					
Other expenses	  	2(b)	 		  	(23,338)  	  	(7,468)  	

Profit before income tax	  		 		  	195,155  	  	81,404  	
					
Income tax expense	  		 		  	(58,026)  	  	(24,296)  	

Profit for the period	  		 		  	137,129  	  	57,108  	

Profit attributable to members of the parent entity	  		 		  	137,129  	  	57,108  	

Earnings per share:	  		 		  		  		
					
Basic (cents per share)	  		 		  	82.65  	  	32.50  	

Diluted (cents per share)	  		 		  	82.65  	  	32.50  	
	  		 	 	
Notes to the financial statements are included on pages 17 to 20.
 
13

PORTMAN LIMITED
CONDENSED CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2008

 	 	 	 	 	  	Consolidated
Half-year ended	
	 		 	 	
 	 	      Notes	 	 	  	30 June
2008
$’000	  	31 December  
2007
$’000	
	 	 	
CURRENT ASSETS	 		 		  		  		
Cash and cash equivalents	 		 		  	80,038  	  	147,742  	
Trade and other receivables	 		 		  	136,353  	  	33,394  	
Inventories	 		 		  	127,573  	  	108,328  	
Other financial assets	 		 		  	33,775  	  	39,483  	
Other assets	 		 		  	1,158  	  	716  	

TOTAL CURRENT ASSETS	 		 		  	378,897  	  	329,663  	

NON-CURRENT ASSETS	 		 		  		  		
Trade and other receivables	 		 		  	618  	  	846  	
Inventories	 		 		  	13,128  	  	28,670  	
Other financial assets	 		 		  	82,029  	  	34,479  	
Property, plant and equipment	 		 		  	258,898  	  	235,081  	

TOTAL NON-CURRENT ASSETS	 		 		  	354,673  	  	299,076  	

TOTAL ASSETS	 		 		  	733,570  	  	628,739  	

CURRENT LIABILITIES	 		 		  		  		
Trade and other payables	 		 		  	62,739  	  	54,272  	
Borrowings	 		 		  	8,799  	  	7,050  	
Current tax payables	 		 		  	48,904  	  	5,929  	
Provisions	 		 		  	18,980  	  	10,489  	
Other financial liabilities	 		 		  	-  	  	419  	

TOTAL CURRENT LIABILITIES	 		 		  	139,422  	  	78,159  	

NON-CURRENT LIABILITIES	 		 		  		  		
Borrowings	 		 		  	81,114  	  	63,600  	
Deferred tax liabilities	 		 		  	9,513  	  	8,480  	
Provisions	 		 		  	11,145  	  	11,003  	
Other financial liabilities	 		 		  	-  	  	90  	

TOTAL NON-CURRENT LIABILITIES	 		 		  	101,772  	  	83,533  	

TOTAL LIABILITIES	 		 		  	241,194  	  	161,692  	

NET ASSETS	 		 		  	492,376  	  	467,047  	

EQUITY	 		 		  		  		
Issued capital	 		 		  	99,909  	  	105,774  	
Reserves	 	8  	 		  	49,959  	  	18,453  	
Retained earnings	 	8  	 		  	342,508  	  	342,820  	

TOTAL EQUITY	 		 		  	492,376  	  	467,047  	
	 		 	 	
Notes to the financial statements are included on pages 17 to 20.
 
14

PORTMAN LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 30 JUNE 2008

 	  	 	  	 	  	Consolidated    
Half-year ended    	
	  		  	 	
 	  	    Notes	  	 	  	30 June
2008
$’000	  	30 June  
2007
$’000	
	  	 	
Issued Capital	  		  		  		  		
					
Balance at beginning of period	  		  		  	105,774  	  	105,774  	
					
Share buy back	  		  		  	(5,865)  	  	-  	

Balance at end of period	  		  		  	99,909  	  	105,774  	

Reserves	  		  		  		  		
Hedging Reserve	  		  		  		  		
Balance at beginning of period	  	8	  		  	18,453  	  	8,084  	
Cash flow hedges:	  		  		  		  		
Gain taken to equity	  		  		  	21,292  	  	12,266  	
Transferred to income statement for the period	  		  		  		  		
	  		  		  	10,127  	  	2,741  	
Income tax on items taken directly to or transferred from equity	  		  		  	(9,426)  	  	(4,502)  	
	  		  	 	
Balance at end of period	  		  		  	40,446  	  	18,589  	

Investments Available-for-Sale Reserve	  		  		  		  		
					
Balance at beginning of period	  		  		  	-  	  	-  	
Gain taken to equity	  		  		  	13,590  	  	-  	
Income tax on items taken directly to or transferred from equity	  		  		  	(4,077)  	  	-  	

Balance at end of period	  		  		  	9,513  	  	-  	

Retained Earnings	  		  		  		  		
Balance at beginning of period	  	8	  		  	342,820  	  	236,450  	
Retained earnings adjustment share buy back:	  		  		  		  		
					
Share buy back	  		  		  	(137,451)  	  	-  	
					
Income tax on items taken directly to equity	  		  		  	10  	  	-  	
					
Profit for the period	  		  		  	137,129  	  	57,108  	

Balance at end of period	  		  		  	342,508  	  	293,558  	
	  		  	 	
Notes to the financial statements are included on pages 17 to 20.
 
15

PORTMAN LIMITED
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE HALF-YEAR ENDED 30 JUNE 2008

 	 	 	  	Consolidated  
Half-year ended  	
	 	 	
 	 	 	  	30 June
2008
$’000	  	30 June  
2007
$’000	
	 	 	
CASH FLOWS FROM OPERATING ACTIVITIES	 		  		  		
Receipts from customers	 		  	312,292  	  	261,567  	
Payments to suppliers and employees	 		  	(208,635)  	  	(209,898)  	
GST received	 		  	16,252  	  	18,566  	
Interest and other costs of finance paid	 		  	(3,053)  	  	(1,792)  	
Insurance proceeds	 		  	850  	  	-  	
Income taxes paid	 		  	(27,877)  	  	(43,884)  	

Net cash flows provided by operating activities	 		  	89,829  	  	24,559  	

CASH FLOWS FROM INVESTING ACTIVITIES	 		  		  		
Payments for property, plant and equipment	 		  	(11,828)  	  	(5,474)  	
Proceeds from sale of property, plant and equipment	 		  	318  	  	(21)  	
Interest received	 		  	8,082  	  	4,447  	
Purchase of available-for-sale financial instruments	 		  	(28,159)  	  	-  	
Term deposits & commercial bills matured*	 		  	21,292  	  	-  	
Term deposits & commercial bills acquired*	 		  	-  	  	(42,502)  	

Net cash flows used in investing activities	 		  	(10,293)  	  	(43,550)  	

CASH FLOWS FROM FINANCING ACTIVITIES	 		  		  		
Repayment of lease liabilities	 		  	(3,052)  	  	(313)  	
Share buy back to equity holders of minority interest	 		  	(143,283)  	  	-  	
Share buy back costs	 		  	(33)  	  	-  	
Repayment of borrowings	 		  	(870)  	  	(1,438)  	

Net cash flows used in financing activities	 		  	(147,238)  	  	(1,751)  	

NET DECREASE IN CASH AND CASH EQUIVALENTS	 		  	(67,704)  	  	(20,742)  	
				
Cash and cash equivalents at the beginning of the period	 		  	147,742  	  	123,567  	

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	 		  	80,038  	  	102,825  	
	 	 	
* Maturities exceeding 90 days
Notes to the financial statements are included on pages 17 to 20.
 
16

NOTES TO THE FINANCIAL STATEMENTS
FOR THE HALF-YEAR ENDED 30 JUNE 2008
Note 1. Significant accounting policies
Statement of compliance
The condensed half-year financial report is a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 ‘Interim Financial Reporting’. Compliance with AASB 134 ensures compliance with International Reporting Standard IAS 34 ‘Interim Financial Reporting’. The half-year financial report does not include notes of the type normally included in an annual financial report and shall be read in conjunction with the most recent annual financial report.
Basis of preparation of half-year report
The condensed half-year financial report has been prepared on the basis of historical cost except for the revaluation of certain financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. Except where indicated otherwise, all amounts are presented in Australia dollars.
The accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those of the previous financial year and corresponding interim reporting period.
Judgements made by management in the application of A-IFRS that have significant effects on the financial statements and estimates with a significant risk of material adjustments in the next year are disclosed, where applicable, in the relevant notes to the financial statements. We have identified significant uncertainties:
(1) Provision for decommissioning and site restoration
Provision is made for the cost of decommissioning and site restoration at the end of the life of the mines. Estimates are based upon a number of assumptions at the reporting date including financial assumptions and consideration of the current legal and regulatory framework governing environmental protection. The provisions recognised at 30 June 2008 represent the Entity’s best estimate of future costs. Uncertainties might result in actual expenditure differing from the amounts provided at reporting date.
Adoption of new and revised Accounting Standards
In the current year, the Consolidated Entity has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for annual reporting periods beginning on or after 1 January 2008. The Consolidated Entity has also adopted the following Standards as listed below which only impacted on the Consolidated Entity’s financial statements which respect to disclosure.
 
•	 	AASB 2008-4 Amendments to Australian Accounting Standards Key Management Personnel Disclosures by Disclosing Entities.	
At the date of authorisation of the financial report, the following Standards and Interpretations were in issue but not yet effective:

    Standard / Interpretation	 	   	  	Effective for annual
reporting periods
beginning on or after  	
			
AASB 3 ‘Business Combinations’ and AASB 2008-3 ‘Amendments to Australian Accounting Standards arising from AASB 3 and AASB 127’	 		  	1 July 2009	
			
AASB 8 ‘Operating Segments’ and AASB 2007-3 ‘Amendments to Australian Accounting Standards arising from AASB 8’	 		  	1 January 2009	
			
AASB 101 (revised September 2007) ‘Presentation of Financial Statements’ and AASB 2007-8 ‘Amendments to Australian Accounting Standards arising from AASB 101’	 		  	1 January 2009	
			
AASB 123 ‘Borrowing Costs’ – revised standard and AASB 2007-6 ‘Amendments to Australian Accounting Standards arising from AASB 123’	 		  	1 January 2009	
			
AASB 127 ‘Consolidated Financial Statements’ – revised standard and AASB 2008-3 ‘Amendments to Australian Accounting Standards arising from AASB 3 and AASB 127’	 		  	1 July 2009	
 
17

NOTES TO THE FINANCIAL STATEMENTS
FOR THE HALF-YEAR ENDED 30 JUNE 2008
Note 1. Summary of Accounting Policies (continued)

    Standard / Interpretation	 	   	  	Effective for annual
reporting periods
beginning on or after  	
			
AASB 2007-4 ‘Amendments to Australian Accounting Standards arising from ED 151 and other amendments’	 		  	1 July 2007	
			
AASB 2008-1 ‘Amendments to Australian Accounting Standards Share-based Payments: Vesting Conditions and Cancellations.	 		  	1 January 2009	
			
AASB 2008-2 ‘Amendments to Australian Accounting Standards Puttable Financial Instruments and Obligations arising on Liquidation.	 		  	1 January 2009	
			
AASB 2008-5 ‘Amendments to Australian Accounting Standards arising from the Annual Improvements Project’	 		  	1 July 2009	
			
AASB 2008-6 ‘Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project’	 		  	1 July 2009	
The directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material financial impact on the financial statements of the Consolidated Entity.
These Standards and Interpretations will be first applied  in the financial report of the Consolidated Entity that relates to the annual reporting period beginning after the effective date of each pronouncement.
Note 2. Profit from Ordinary Activities

 	 	 	  	Consolidated
Half-year ended	
	 	 	
 	 	 	  	30 June 2008
$’000	  	30 June 2007  
$’000	
	 	 	
The profit from ordinary activities before income tax is arrived at after:	 		  		  		
				
(a) Profit from ordinary items is after crediting the following:	 		  		  		
				
Sales revenue	 		  	412,266	  	266,222  	

Interest received from other corporations	 		  	8,342	  	5,182  	
Agency fee	 		  	315	  	119  	

Other revenues	 		  	8,657	  	5,301  	

Profit on sale of property, plant and equipment	 		  	284	  	11  	
Insurance recoveries	 		  	1,000	  	-  	
Foreign exchange gain/(loss) on sales	 		  	557	  	530  	
Management fees	 		  	80	  	-  	
Misc other income	 		  	347	  	46  	

Other income	 		  	2,268	  	587  	

18

NOTES TO THE FINANCIAL STATEMENTS
FOR THE HALF-YEAR ENDED 30 JUNE 2008
Note 2. Profit from Ordinary Activities (continued)

 	 	 	  	Consolidated
Half-year ended	
	 	 	
 	 	 	  	30 June 2008
$’000	  	30 June 2007  
$’000	
	 	 	
(b) Profit is after charging the following expenses:	 		  		  		
				
Finance costs	 		  		  		
Interest paid / payable to other corporations	 		  	(403)	  	(631)  	
Unwinding of discount on rehabilitation provision and receivable	 		  	(925)	  	(340)  	
Finance lease charges	 		  	(2,705)	  	(900)  	

Total finance costs	 		  	(4,033)	  	(1,871)  	

Other expenses	 		  		  		
Movement in the fair value of financial instruments and the time value on
hedging instruments	 		  	(9,365)	  	(2,960)  	
Exploration and evaluation expenditure	 		  	(8,867)	  	(3,348)  	
Foreign exchange loss	 		  	(4,736)	  	(1,160)  	
Mobilisation/ demobilisation	 		  	(370)	  	-  	

Total other expenses	 		  	(23,338)	  	(7,468)  	

(c) Other disclosures	 		  		  		
				
Amortisation and Depreciation	 		  		  		
Mine Assets	 		  	7,919	  	3,930  	
Plant and equipment	 		  	5,605	  	5,566  	
Plant and equipment under finance lease	 		  	4,236	  	1,197  	

Total	 		  	17,760	  	10,693  	
	 	 	
Note 3. Dividends
No dividends were declared in the current and prior period.
Note 4. Contingencies
In May 2007 Western Australia’s Environmental Protection Authority (“EPA”) published a study in which it recommended the establishment of “A class reserves” for the protection of certain allegedly environmentally sensitive areas of Western Australia. Some of the proposed A class reserves overlap with mining tenements granted to Portman (the “Overlapping Areas”). The EPA study has been submitted to the Minister for the Environment and Heritage.
Portman originally received governmental approval to mine in the Overlapping Areas in June 2003. Since that time, Portman has met all applicable environmental requirements. Although we are currently reviewing the study and the effects of the designation of the Overlapping Areas as A class reserves, such categorisation would be likely to have a material effect on Portman’s operations. It is unknown at this time whether the Minister for the Environment and Heritage will accept the recommendations of the EPA. Portman is currently in dialogue with Government in regards to this issue.
 
19

NOTES TO THE FINANCIAL STATEMENTS
FOR THE HALF-YEAR ENDED 30 JUNE 2008
Note 5. Subsequent Events
There has been no matter or circumstance that has arisen since the year end that has affected, or may significantly affect, the operations of the Consolidated Entity and the Company, the results of the operations, or the state of affairs of the Consolidated Entity and the Company in subsequent periods.
Note 6. Segment Information
 
(a)	Business Segment	
The Consolidated Entity operates in one business segment – iron ore mining and exploration.
 
(b)	Geographic Segment	
The Consolidated  Entity operates in one geographic segment – Australia.
Note 7. Joint Venture
The Consolidated Entity has a 50% joint venture interest in the Cockatoo Iron Ore Joint Venture. The Consolidated Entity’s share of the results of this joint venture has been included in the Income Statement to 30 June 2008.

 	 	 	  	Consolidated
Half-year ended  	
	 	 	
 	 	 	  	  30 June
2008
$’000	  	30 June  
2007
$’000	

Share of Joint Venture profit before tax	 		  	12,105	  	5,395  	
	 	 	
Note 8. Prior Period Error
In the year ended 31 December 2007 there was a misallocation between Hedge Reserve and earnings which has required restatement of the prior year comparatives. This has resulted in the following adjustment:

 	 	 	  	 	  	 	  	 	
	 	 	
 	 	 	  	31 Dec
2007	  	Adjustment	  	Restated  
31 Dec
2007	
 	 	 	  	$’000	  	$’000	  	$’000	

Net Assets	 		  	467,047	  	-	  	467,047  	

Share capital	 		  	105,774	  	-	  	105,774  	
Reserves	 		  	28,190	  	(9,737)	  	18,453  	
Retained earnings	 		  	333,083	  	9,737	  	342,820  	

Total Equity	 		  	467,047	  	-	  	467,047  	
	 	 	
The adjustment does not affect profit for the half-year ended 30 June 2007 or the half-year ended 30 June 2008.
 
20