United States

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-K

(Mark One)

for the fiscal year ended December 31, 2011

OR

Commission File Number: 000-33433

KAISER VENTURES LLC

(Exact name of registrant as specified in its charter)

3633 E. Inland Empire Blvd. Suite 480337 N. Vineyard Ave., 4^th Floor

Ontario, CA 91764

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (909) 483-8500

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.    Yes  ¨    No  x

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) is not herein, and will not be contained to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨  (The registrant is not yet required to submit Interactive Data)

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.):    Yes  ¨    No  x

The Class A Units are not publicly traded and thus, no public float exists and an aggregate market value of the Company’s Class A Units cannot be determined.

At March 15, 2012, 7,002,8071, 2013, 7,096,806 Class A Units were outstanding including 104,267 Class A Units outstanding but reserved for distribution to the general unsecured creditors in the Kaiser Steel Corporation bankruptcy and 113,250113,101 Class A Units deemed outstanding and reserved for issuance to holders of Kaiser Ventures Inc. stock that have to convert such stock into Kaiser Ventures LLC Class A Units.

Documents Incorporated by Reference: Certain exhibits as identified in the Exhibit List to this Annual Report on Form 10-K are incorporated by reference.

Transitional Small Business Disclosure Format (Check One):Yes  ¨    No  x

KAISER VENTURES LLC AND SUBSIDIARIES

TABLE OF CONTENTS TO FORM 10-K

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KAISER VENTURES LLC AND SUBSIDIARIES

PART I

FORWARD-LOOKING STATEMENTS

Except for the historical statements and discussions contained herein, statements contained in this 10-K Report constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Any 10-K Report, 10-KSB Report, 10-Q Report, 10-QSB Report, 8-K Report, website posting or press release of the Company and any amendment thereof may include forward-looking statements. In addition, other written or oral statements, which constitute forward-looking statements, have been made and may be made in the future by the Company. You should not put undue reliance on forward-looking statements. When used or incorporated by reference in this 10-K Report or in other written or oral statements, the words “anticipate,” “estimate,” “project,” and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks, uncertainties, and assumptions. We believe that our current assumptions are reasonable. Nonetheless, it is likely that at least some of these assumptions will not come true. Accordingly, should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, expected, or projected. For example, our actual results could materially differ from those projected as a result of factors such as, but not limited to: the consequences of the adverse conclusion of the final federal litigation involving a previously completed federal land exchange and the Company’s decision not to provide additional funds to Mine Reclamation, LLC for purposes of pursuing a “fix” of the land exchange; the bankruptcy of Mine Reclamation, LLC and the claims that may be made in or as result of such bankruptcy; pre-bankruptcy activities of Kaiser Steel Corporation, the predecessor of Kaiser, and asbestos and environmental claims; insurance coverage disputes; the impact of existing or proposed federal, state, and local laws and regulations on any of our current and future projects and subsidiaries, and their permitting and development activities; competition; the challenge, reduction or loss of any claimed tax benefits, including the taxation of the Company as a partnership; the impact of natural disasters on our assets; the amount and nature of the mineral resources at Eagle Mountain and any inability to exploit such possible mineral and resource opportunities; the impacts and risks of the proposed dissolution and winding-up of the Company; and/or general economic conditions in the United States and Southern California. The Company disclaims any intention to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

WHO WE ARE

Unless otherwise noted: (1) the term “Kaiser LLC” refers to Kaiser Ventures LLC; (2) the term “Kaiser Inc.” refers to the former Kaiser Ventures Inc.; (3) the terms “Kaiser,” the “Company,” “we,” “us,” and “our,” refer to past and ongoing business operations conducted in the form of Kaiser Inc. or currently Kaiser LLC, and their respective subsidiaries. Kaiser Inc. merged with and into Kaiser LLC effective November 30, 2001; (4) the terms “Class A Units” and “members” refer to Kaiser LLC’s Class A Units and the beneficial owners thereof, respectively; and (5) the term the “merger” refers to the merger of Kaiser Inc. with and into Kaiser LLC effective November 30, 2001, in which Kaiser LLC was the surviving company. Kaiser is the reorganized successor tocompany Kaiser Steel Corporation, referred to as KSC, whichformerly was an integrated steel manufacturer.manufacturer that filed for Chapter 11 bankruptcy in 1987. Kaiser is the reorganized successor to a portion of the assets of the former KSC.

Summary of Our Business

Overview.Our business is developinghas been to develop the remaining assets we received from the KSC bankruptcy and the possible opportunities related to such assets. Our current material projects and opportunities are summarized below.In 2000 Kaiser’s then Board of Directors approved a cash maximization strategy with the goal of seeking to reasonably maximize future

KAISER VENTURES LLC AND SUBSIDIARIES

As further background, MRC and the County Sanitation District No. 2 of Los Angeles County (the “District”) had entered into an Agreement for Purchase and Sale of Real Property and Related Personal Property in Regard to the Eagle Mountain Sanitary Landfill Project and Joint Escrow Instructions on August 9, 2000 (the “Landfill Project Sale Agreement”). The closing date under the Landfill Project Sale Agreement had been extended numerous times since December 31, 2000, pursuant to written extension agreements between MRC and the District. Under each of those extension agreements, the District had the right to either purchase the Landfill Project in its “as is” condition or to terminate its Landfill Project Sale Agreement with MRC. The last extension of the closing date under the Landfill Project Sale Agreement was set to expire on October 31, 2011. The then Chief Engineer and General Manager of the District had initially indicated that the District was not intending to proceed with the purchase of the Landfill Project;

KAISER VENTURES LLC AND SUBSIDIARIES

then he later communicated that the District would be purchasing the Landfill Project on October 31, 2011. Subsequent to the verbal communications from the then Chief Engineer and General Manager, the District repudiated in writing the terms of the last extension agreement, and threatened to sue MRC to, among other things, compel MRC, at MRC’s sole expense and risk, to further proceed with fully permitting the landfill which would have involved substantial additional financial resources and time, neither of which MRC had. Thus, MRC filed for bankruptcy protection on October 30, 2011, in federal bankruptcy court in Riverside County, California in order to preserve and protect its assets and options with respect to such assets.

KAISER VENTURES LLC AND SUBSIDIARIES

Sale of Ownership Interest In West Valley MRF, LLC.We no longer own an interest in the West Valley MRF, LLC (“WVMRF, LLC”). On April 2, 2012, Kaiser Recycling, LLC, a wholly-owned subsidiary of Kaiser LLC, sold its fifty percent (50%) ownership interest in the WVMRF, LLC which owns and operates the West Valley Materials Recovery Facility and Transfer Station, a transfer station and materials recovery facility near Fontana, California. The gross cash sales price for Kaiser Recycling’s 50% ownership interest was approximately $25,769,000 with the Company recording a gain on the sale of $20,588,000 in the second quarter of 2012.

CASH MAXIMIZATION STRATEGY AND PROPOSED LIQUIDATION OF THE COMPANY

Cash Maximization Strategy. In September 2000, Kaiser Inc.’s Board of Directors approved a strategy to maximize the cash ultimately to be distributed to Kaiser Inc.’s stockholders. Consistent with this strategy, Kaiser Inc. historically completed or entered into a number of transactions. For additional information on these transactions see “Item 1. BUSINESS - BUSINESS—Historical Operations and Completed Transactions” in this Annual Report on Form 10-K. These transactions resulted inPursuit of the cash maximization strategy over the past 13 years, the Company has made distributions totaling $13.50 per unit/share as of March 1, 2013. Specifically: (i) a $2.00 per share return of capital distribution was made to shareholders in 2000 and,2000; (ii) with the conversion of Kaiser Inc. to a limited liability company in November 2001, a distribution was made to shareholders of $10.00 per share plus one Class A Unit in Kaiser LLC upon surrender of their Kaiser Inc. stock. Westock; and (iii) with the sale of the ownership interest in the WVMRF, LLC in April 2012, a

KAISER VENTURES LLC AND SUBSIDIARIES

distribution of $1.50 per unit was made in May 2012. In addition, we have also taken steps to minimize any exposure we may have to liabilities resulting from the historical operations of the former KSC.

In furtherance of the cash maximization strategy, in October 2011 the Company entered into an option and purchase agreement whereby the option holder could purchase Kaiser’shas been seeking to sell its ownership interest in MRC, in Kaiser Eagle Mountain, LLC (“Kaiser Eagle Mountain”KEM”),; the owner of the property at Eagle Mountain, and in Lake Tamarisk Development, LLC (“Lake Tamarisk”), the owner of property at Lake Tamarisk. Such purchaseAny possible sale of the Kaiser Eagle Mountain property was subject, in all instances, to the rights of the District to acquire the Landfill Project on or before October 31, 2011. The option holder was also willing to purchase the ownership interests in MRC that Kaiser did not own. However, as a result of the actions of the District and the bankruptcy filing by MRC, the option holder did not exercise its option and the option ultimately terminated.For additional information on these efforts, see “Item 2. PROPERTIES—Eagle Mountain, California.” The final implementation of the cash maximization strategy has been negatively impacted by, among other things, the adverse final decision in the federal land exchange litigation which has halted MRC’s ability to continue to pursue the Landfill Project, the adverse actions of the District, MRC’s bankruptcy and unsettled economic conditions. Accordingly,However, the Company’s Board of Managers has determined that the proposed dissolution of the Company is currently the best opportunity to achieve possible future distributions to its members. Additionally, if the dissolution of the Company occurs, the final implementation of the cash maximization strategy could take ana significant additional significant period of time depending upon the timing of the resolution of MRC’s bankruptcy and the sale of our remaining assets. We are continuing to evaluate all reasonable options with regard to the disposition of our remaining assets.

Proposed Dissolution of the Company. On January 15, 2013, the Company’s Board of Managers approved the dissolution and liquidation of the Company pursuant to the Plan of Dissolution and approved the New Operating Agreement for the Company, both of which remain subject to approval by the Company’s Class A members. The Board of Managers concluded that it is currently in the best interests of the Company and its members to dissolve and liquidate as the final step in implementing the Company’s previously approved cash maximization strategy. Assuming the Plan of Dissolution is approved by the Company’s members, the Company plans on selling its remaining assets, discharging or making adequate provision for all of its known and contingent liabilities and distributing the net liquidation proceeds, if any, in one or more future distributions to members. However, there could be no further distributions to members if our remaining assets are sold for substantially less than we currently anticipate and/or if liquidation expenses and actual and contingent liabilities are higher than we currently understand and estimate. Accordingly, we are continuingnot able to predict with certainty the precise nature, amount or timing of any future distributions, primarily due to our inability to accurately predict (i) the amount of our remaining liabilities, (ii) the amount that we will expend during the course of the liquidation, or (iii) the net realizable value, if any, of our remaining non-cash assets. The Board has not established a firm timetable for any interim or final distributions to the Company’s members. If the Plan of Dissolution is approved by the Company’s members, the individuals serving on the Board of Managers will resign from the Board of Managers and the Board of Managers will be eliminated and replaced with a single Liquidation Manager with the power and authority to manage the liquidation and dissolution of the Company and the winding up of its affairs. The target date to complete dissolution is June 30, 2014, but that date could be extended to December 31, 2014, or beyond at the discretion of the Liquidation Manager.

Further details of the Plan of Dissolution and the New Operating Agreement will be provided in a proxy statement that will accompany the notice of the special members’ meeting that will be called to approve the Plan of Dissolution, the New Operating Agreement and a name change for the Company. The special members’ meeting would be the commencement of the final step in the Company’s cash maximization strategy.

KAISER VENTURES LLC AND SUBSIDIARIES

evaluateMEMBERS OF THE COMPANY ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY ALL RELEVANT MATERIALS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE PROXY STATEMENT, WHEN THEY BECOME AVAILABLE, BECAUSE THESE MATERIALS WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS.

If the Plan of Dissolution is approved, we intend to immediately seek relief from the SEC to modify our reporting obligations under the Securities and Exchange Act of 1934, as amended, and in particular, to seek relief from the requirement to provide quarterly Form 10-Q Reports and audited annual financial statements. We anticipate that, if granted such relief, we would be required to continue filing current reports on Form 8-K to disclose material events relating to our dissolution and liquidation, along with any other reports that the SEC might require but we would no longer be filing audited financial statements. If the SEC does not grant us the requested relief, we will be required to continue filing all reasonable optionsof our periodic and current reports as required by the Securities Exchange Act of 1934, as amended, and to provide

KAISER VENTURES LLC AND SUBSIDIARIES

audited financial statements, both of which would reduce the amount of funds available, if any, for distribution to members because of the costs associated therewith.

As will be more fully detailed in the proxy statement that will be furnished to the Company’s Class A members prior to the members’ meeting at which the approval of the Plan of Dissolution, the New Operating Agreement and a name change will be considered, there are a number of risks associated with regarddissolving the Company and winding-up its business. These risks include, but are not limited to:

MINE RECLAMATION AND EAGLE MOUNTAIN LANDFILL PROJECT

Description of the Eagle Mountain Site. Kaiser’s Eagle Mountain Site is located in the remote California desert approximately 200 miles east of Los Angeles, currently consistingconsists of approximately 10,800 acres, that contains three large open pit mines, the Eagle Mountain Townsite and a 52-mile private rail line that accesses the site. In 1988, Kaiser Eagle Mountain, Inc. (now Kaiser Eagle Mountain, LLC) leased what is now approximately 4,654 acres of the mine site and the rail line to MRC for development of a rail-haul solid-waste landfill. The lease between MRC and Kaiser Eagle Mountain, LLC, a wholly-owned subsidiary of Kaiser, as amended to date is often referred to as the (“MRC Lease”). On October 30, 2011, MRC filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code. The MRC Lease may be assumed or rejected in the MRC bankruptcy.

In 1988, in anticipation of Southern California’s need for new environmentally safe landfill capacity, MRC began the planning and permitting for a 20,000 ton per day rail-haul, non-hazardous solid waste landfill at Kaiser’s Eagle Mountain Site. The landfill project received all the major permits and approvals required for siting, constructing, and operating the landfill project in 1999. However, as discussed in

KAISER VENTURES LLC AND SUBSIDIARIES

more detail below, the Landfill Project has been subject toembroiled in extensive administrative challenges and state and federal litigation. As discussedlitigation for over 20 years, with nearly $85 million having been spent by MRC in more detail below, MRC was ultimately successful in state court in defendingseeking to permit and defend the Landfill Project, its permits and state and local approvals. However,of which approximately $28.6 million has been spent since Kaiser became a member of MRC ultimately lost the challenges to a completed federal land exchange that were pursued in federal court when in March 2011 the U.S. Supreme Court’s denial our petition to review the prior adverse decision of the U.S. 9^th Circuit Court of Appeals. The Company currently owns approximately 84.247% of the Class B units and 100% of the Class A units of MRC. On October 30, 2011, MRC filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code.1995.

Acquisition of Our Ownership Interest in MRC. We initially acquired our interest in MRC in 1995, as a result of the withdrawal of MRC’s previous majority owner, a subsidiary of Browning Ferris Industries. Before and in connection with this withdrawal, Browning Ferris invested approximately $45 million in MRC. In 2000, Kaiser assigned all of the economic benefits of the MRC lease and granted an option to buy the landfill property to MRC in exchange for an increase in Kaiser’s ownership interest in MRC (the “MRC Option”). The MRC Option is currently scheduled to expire in June 2012,March 29, 2013, if not extended by mutual agreement. We presently own 84.247% of MRC’s Class B Units and 100% of its Class A Units. See “Item 1. BUSINESS - BUSINESS—Mine Reclamation and Eagle Mountain Landfill Project—MRC Financing” below.

Historical Landfill Project Litigation

State Litigation. After entering into the MRC Lease in 1988, MRC undertook activities including, but not limited to, negotiation and execution of a Memorandum of Understanding and Development Agreement with the County of Riverside (the “County”), preparation of an Environmental Impact Report (“EIR”)/Environmental Impact Study (“EIS”), numerous meetings and hearings with the Riverside County Planning Commission (the “Planning Commission”) and the Board of Supervisors of Riverside County (the “Board of Supervisors”), drilling and other field analysis to support environmental permit applications, and transportation and market development activities. On June 17, 1992, the Planning Commission recommended to the Board of Supervisors against approval of the Project. In September 1992, the Board of Supervisors held a series of public hearings regarding the Landfill Project and on October 6, 1992, the Board of Supervisors voted in favor of certain land use approvals required for the Landfill Project. On November 3, 1992, the Board of Supervisors officially adopted certain resolutions and ordinances certifying the EIR and the land use approvals for the Landfill Project.

Subsequent to the certification of the EIR in December 1992, three separate legal actions were commenced challenging the adequacy of the Project’s EIR as well as the review process leading to the Board of Supervisors’ approval of the EIR pursuant to the California Environmental Quality Act (“CEQA”). The legal actions were filed by local residents (Laurence R. and Donna J. Charpied), preservation groups and interested individuals (National Parks and Conservation Association, Eagle Mountain Landfill Opposition Coalition, City of Coachella, Steve W. Clute, Daniel S. Roman, and Richard M. Marsh), and the company that desires to use the Company’s property, a portion of which is covered by the MRC Lease, for a hydro-electric pump and storage project which company is now called Eagle Crest Energy Company (“ECEC”).

In June 1994, the San Diego County Superior Court issued a tentative ruling on the challenges to the EIR for the Eagle Mountain Landfill Project. Of the more than seventy areas of concerns initially raised by the plaintiffs in the cases, the Court announced that it had eight areas of concerns in which the EIR may be deficient and require future supplemental information and corrective action. After the Court’s tentative ruling, the Court held hearings on these legal challenges. On July 26, 1994, the Court issued its decisions in the cases which were adverse to the Landfill Project.

As a result of the San Diego Superior Court’s determinations, the Court set aside and declared void the Board of Supervisors’ certification of the EIR and all County approvals of the Project rendered in connection with the certification of the EIR, suspended permitting activities related to the development of the Landfill Project and directed the preparation of a new final environmental impact statement and report in compliance with applicable law and the Court’s conclusions.

MRC initially took steps to appeal the Court’s 1994 adverse decision. However, in late 1994 the Board of Supervisors voted not to appeal the Court’s decisions. As a result, the County took the steps

KAISER VENTURES LLC AND SUBSIDIARIES

necessary to vacate the entitlements previously granted by the County to MRC in compliance with the Court’s decisions. Even though MRC initially took steps to appeal the Court’s decisions, MRC later determined that it would be in its best interest to focus its efforts on a new EIR/EIS and permitting the Landfill Project. Accordingly, MRC dropped all of its appeals.

While MRC had dropped its appeals in favor of focusing on the re-permitting, three issues were appealed by the plaintiffs. After ECEC dropped its appeal of the denial of its attorney’s fees, the remaining issues that were appealed were resolved in favor of the Company. In early 1996, the appeals court affirmed the trial court’s findings on the three issues that were favorable to the Company.

Prior to the adverse decisions of the San Diego Superior Court, MRC had received from a variety of federal, state and local regulatory agencies 17 of the 20 technical and environmental permits necessary to construct and operate the Project. In 1995, MRC re-initiated the necessary permitting process by filing its land use applications with the County and working with the County and BLM in securing the certification and approval of a new environmental impact report, or an EIR. After extensive public comment, the new EIR was released to the public in January 1997, and received final approval from the County Board of Supervisors in September 1997.

After the September 1997 approval of the new EIR for the Landfill Project by the Board of Supervisors, litigation with respect to MRC’s EIR certification resumed. In February 1998 the San Diego County Superior Court issued a final ruling with respect to this second round of EIR litigation, finding that the EIR certification did not adequately evaluate the Landfill Project’s impact on the Joshua Tree National Park and the threatened desert tortoise. KEM, MRC and the County appealed the Superior Court’s decision; opponents did not appeal.

On May 7, 1999, the Court of Appeal announced its decision to completely reverse the San Diego Superior Court’s prior adverse decision. The Court of Appeal’s decision, in effect, reinstated the EIR certification and reinstated the previous approval of the Landfill Project by the County. In June 1999, opponents to the Landfill Project requested that the California Supreme Court review and overturn the Court of Appeal’s decision. In July 1999, the California Supreme Court declined to review the Court of Appeal’s decision.

Federal Land Exchange Litigation. In October 1999, KEM completed a land exchange with the BLM. In this exchange, KEM transferred approximately 2,800 acres of KEM-owned property along its railroad right-of-way to the BLM and a nominal cash equalization payment in exchange for approximately 3,500 acres of land within the landfill project area. The land exchanged by KEM was identified as prime desert tortoise habitat and was a prerequisite to completion of the permitting of the Landfill Project. The land exchange also involved the grant of two rights-of-way by the BLM and the termination of a reversionary interest involving approximately 460 acres of the Eagle Mountain Townsite that was contained in the original grant of such property.

Following completion of the land exchange, two lawsuits were filed in the U.S. District Court for the Central District of California, Eastern Division challenging the land exchange and requesting its reversal. The plaintiffs argued that the land exchange should be reversed because the BLM failed to comply with the National Environmental Policy Act and the Federal Land Management Policy Act. Nearly three years after the final brief in the case was filed, on September 20, 2005, the U.S. District Court issued its opinion. The decision was adverse to the Landfill Project in that it “set aside” the land exchange completed between KEM and BLM as well as two BLM rights-of-way. The Company along with the U.S. Department of Interior appealed the decision to the U.S. 9^th Circuit Court of Appeals. The briefing for the appeal was completed in 2007 and oral argument was heard before a three judge panel on December 6, 2007.

On November 10, 2009, a three-judge panel of the U.S. 9^th Circuit Court of Appeals issued its decision in the Company’s land exchange litigation and landfill project appeal. In a 2 to 1 decision the

KAISER VENTURES LLC AND SUBSIDIARIES

majority opinion was adverse to the Landfill Project in that it upheld portions of the prior U. S. District Court decision setting aside the completed land exchange. A 50-page dissenting opinion was filed. The dissenting judge found in the Company’s favor on all issues involving the land exchange and the Landfill Project.

We sought further review of the adverse U.S. 9^th Circuit Court of Appeals decision by a broader panel of judges from the U.S. 9^th Circuit Court of Appeals but the request for an en banc hearing by the U.S. 9^th Circuit Court of Appeals was denied on July 30, 2010. In October 2010 we filed a petition with the U.S. Supreme Court asking the Court to review the decision of the U.S. 9^th Circuit Court of Appeals. On March 28, 2011, the U.S. Supreme Court declined to accept our appeal. On May 10, 2011, the U.S. District Court issued its order remanding the actions “to the BLM for proceedings consistent with the Ninth Circuit’s May 19, 2010 amended opinion.” With the decision of the U.S. Supreme Court not to hear the appeal of the adverse decision of the 9^th Circuit Court of Appeals, there is no longer any pending litigation and the adverse federal litigation is final and fully concluded as no further appeals are available.

Previously Anticipated Sale of Landfill Project

In August 2000 MRC entered into an agreement to sell the landfill projectLandfill Project to the District for $41 million. The agreement for the sale of the Landfill Project was modified so that the purchase price began accruing interest in May 2001. The closing date under the Landfill Project Sale Agreement had been extended numerous times since December 31, 2000, pursuant to written extension agreements between MRC and the District. Under each of those extension agreements, the District had the right to either purchase the Landfill Project in its “as is” condition or to terminate its Landfill Project Sale Agreement with MRC. The last extension of the closing date under the Landfill Project Sale Agreement was set to expire on October 31, 2011. The then Chief Engineer and General Manager of the District in October 2011 had indicated that the District was not intending to proceed with the purchase of the Landfill Project. He later communicated that the District would be purchasing the Landfill Project on October 31, 2011. The District subsequently repudiated in writing the terms of the last extension agreement, and threatened to sue MRC to, among other things, compel MRC, at MRC’s sole expense and risk, to further proceed with the permitting of the landfill which would involve substantial additional financial resources and time, neither of which MRC has.had. Thus, MRC filed for bankruptcy protection on October 30, 2011, in federal bankruptcy court in Riverside County, California in order to preserve and protect its assets and options with respect to such assets. See “Item 1. BUSINESS - Mine Reclamation and Eagle Mountain Landfill Project - Risks Factors” for a more detailed discussion of some of the material risk factors facing the Landfill Project and MRC.

KAISER VENTURES LLC AND SUBSIDIARIES

Damage to Railroad

The Company owns an approximate 52-mile private railroad that runs from Ferrum Junction near the Salton Sea to the Eagle Mountain mine. The Eagle Mountain railroad is not abandoned. In late August and early September of 2003, portions of the railroad and related protective structures sustained considerable damage due to heavy rains and flash floods. This damage included having some rail sections being buried under silt while other areas had their rail bed undermined. In 2005 we conducted a more complete investigation of the damage and of the costs to return the railroad to the condition that it was in prior to the flood damage. As a result of that investigation, we estimated that the cost to repair thesuch flood damage to be a minimum of $4.5 million for which an accrual has been made. Since the 2003 floods additional damage has been sustained by the railroad and in the fall of 2011 the Union Pacific Railroad removed the track and switching facilities at Ferrum Junction which is the location at which the Eagle Mountain railroad connects to the mainline of the Union Pacific Railroad. There have also been attempts to steal portions of the railroad for scrap value. MRC is obligated to repair and maintain the railroad under the terms of the MRC Lease. Kaiser and MRC are evaluating what actions should be taken against Union Pacific Railroad as a result of Union Pacific’s actions. At this time, the major repairs required to return the railroad to its condition prior to the flood damage will be deferred until a later date or until there is another project at Eagle Mountain that warrants such repairs.

KAISER VENTURES LLC AND SUBSIDIARIES

MRC Financing

Since 1995 MRC has been funded through a series of private placements to its existing equity holders. As a result of prior MRC private placements and in exchange for releasing the economic benefits of the lease with MRC and granting MRC the option to acquire the landfill project site for $1.00, we have increased our original 70% ownership interest in MRC acquired in 1995 to 84.247%. A private placement for $1,300,000 was completed during the third quarter of 2011 in which Kaiser invested $1,146,344 increasing our ownership interest to the current 84.247%. Kaiser has made the determination that it will not make additional equity investments in MRC for the purpose of pursuing a “fix” of the federal land exchange. However,While Kaiser could become a debtor in possession lenderwill not be providing additional funding to MRC for the purpose of pursing a “fix” of the land exchange, Kaiser is in the process to providing MRC with a line of credit currently in the amount of up to $500,000 (which could be increased up to $1,000,000) in order for MRC to fund certain activities while in bankruptcy.

Current Status

Federal Land Exchange Litigation was Adversely Concluded in 2011. In October 1999, Kaiser Eagle Mountain, Inc. (now Kaiser Eagle Mountain, LLC), completed a land exchange withto complete the BLM. In this exchange, Kaiser transferred approximately 2,800 acresMRC bankruptcy process. Draws under the line of Kaiser-owned property along its railroad right-of-way to the BLM and a nominal cash equalization payment in exchange for approximately 3,500 acres of land within the landfill project area. The land exchanged by Kaiser was identified as prime desert tortoise habitat and was a prerequisite to completion of the permitting of the landfill project. With the land exchange completed, the Eagle Mountain Site consists of approximately 10,108 acres with 8,636 acres held in fee (which includes the Eagle Mountain Townsite) and approximately 1,472 acres held as various mining claims. The land exchange also involved the grant of two rights-of-way by the BLM and the termination of a reversionary interest involving approximately 460 acres of the Eagle Mountain Townsite that was containedcredit would be completely in the original grantdiscretion of such property.

Following completionKaiser and bear interest at the rate of five percent (5%) per annum. Kaiser’s loan will not be secured but will be an administrative claim against the land exchange, two lawsuits were filed challengingMRC bankruptcy estate meaning that it and requesting its reversal. The plaintiffs argue that the land exchange should be reversed because the BLM failed to comply with the National Environmental Policy Act and the Federal Land Management Policy Act. Nearly three years after the final briefwill have priority in payment over unsecured claims in the case was filed, on September 20, 2005, the U.S. District Court for the Central Districtbankruptcy. Without a sale of California, Eastern Division, issued its opinion in the case. The decision was adverse to the landfill project inany assets that it set aside the land exchange completed between the Company and BLM as well as two BLM rights-of-way. The Company along with the U.S. Department of Interior appealed the decision to the U.S. 9^th Circuit Court of Appeals.

KAISER VENTURES LLC AND SUBSIDIARIES

On November 10, 2009, a three-judge panel of the U.S. 9^th Circuit Court of Appeals issued its decision in the Company’s land exchange litigation and landfill project appeal. In a 2 to 1 decision the majority opinion was adverse to the Eagle Mountain landfill project in that it upheld portions of the prior U. S. District Court decision setting aside the completed land exchange. A 50-page dissenting opinion was filed. The dissenting judge found in the Company’s favor on all issues involving the land exchange and landfill project.

We sought further review of the adverse U.S. 9^th Circuit Court of Appeals decision by a broader panel of judges from the U.S. 9^th Circuit Court of Appeals but the request for an en banc hearing by the U.S. 9^th Circuit Court of Appeals was denied on July 30, 2010. In October 2010 we filed a petition with the U.S. Supreme Court asking the Court to review the decision of the U.S. 9^th Circuit Court of Appeals. On March 28, 2011, the U.S. Supreme Court declined to accept our appeal. On May 10, 2011, the U.S. District Court issued its order remanding the actions “to the BLM for proceedings consistent with the Ninth Circuit’s May 19, 2010 amended opinion.” With the decision of the U.S. Supreme Court not to hear the appeal of the adverse decision of the 9^th Circuit Court of Appeals,MRC may have, there is no longer any pending litigation and the adverse federal litigation is final anda substantial risk that this loan will not be fully concluded as no further appeals are available. Unless the BLM land exchange is ultimately completed, the Eagle Mountain Landfill Project will likely never proceed.repaid.

MRC Assets and Bankruptcy.As of the date of this Report on Form 10-K, the primary assets of MRC consist of the MRC Lease, the MRC Option and certain landfill related permits and approvals. MRC is in default of certain of its obligations under the MRC Lease such as maintaining and repairing the Eagle Mountain railroad. The MRC Option currently expires June 1, 2012.March 29, 2013.

As previously discussed,noted, MRC filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for Central District of California, Riverside Division, bankruptcy case number 6:11-bk-43596 (the “Bankruptcy Court”). MRC will continue to operate its business as a “debtor in possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code, Rules and orders of the Bankruptcy Court. As part of the proceedings in Bankruptcy Court, MRC will need to develop a plan of reorganization which will include decisions regarding the status of the MRC Lease, the MRC Option and the Landfill Project Sale Agreement, among other things. It is possible that the Landfill Project will continue in some form as a result of the reorganization of MRC or the sale of certain of MRC’s assets. However, funding for a continuation of the “fix” process in order for the Landfill Project to continue in some form will need to be obtained from a source other than from Kaiser. While Kaiser will not be providing additional funding to MRC for the purpose of pursing a “fix” of the land exchange, Kaiser may, subject to approval of the Bankruptcy Court and the Board of Managers of MRC and of Kaiser, respectively, become a debtor in possession lender to MRC in order to fund certain activities to complete the MRC bankruptcy process.

Write-down of Investment in Eagle Mountain Landfill Project. In accordance with the requirements of generally accepted accounting principles (“GAAP”), we wrote down the carrying cost of the investment in the Landfill Project on our financial statements effective June 30, 2010, and again effective as of March 31, 2011. For additional information, see “Part I. - II.—Item 2.7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - OPERATIONS—OPERATING RESULTS - RESULTS—Write-Down of Investment in Eagle Mountain Landfill.” With the write downs in 2010 and in 2011, the total investment associated with the Landfill Project has been written down to $13,843,000. As future events unfold with regard to MRC, the Company will continue to evaluate if further write-downs may be necessary or appropriate.

Eagle Crest Energy Company. Eagle Crest Energy Company, referred to as ECEC, one of the original opponents to the landfill project, is pursuing a license from the Federal Energy Regulatory Commission, referred to as FERC, for a proposed 1,300 mega-watt hydroelectric pumped storage project

KAISER VENTURES LLC AND SUBSIDIARIES

and ancillary facilities. The proposed ECEC project would utilize two of the mining pits and other property at the Eagle Mountain Site, that we own. The proposed lower reservoir for ECEC’s proposed project is located on land currently leased to MRC and is the subject of the MRC Option Agreement. We continue to believe that any landfill project and the resumption of large-scale mining would be adversely impacted by the ECEC project. ECEC has been pursuing this project off and on for nearlyover 20 years. The Company has not agreed to sell or lease this property to ECEC. We,ECEC and we, along with others, object to the ECEC project. ECEC has filed for a necessary water quality certification from the State of California. In connection with ECEC seeking such water

KAISER VENTURES LLC AND SUBSIDIARIES

quality certification, a draft environmental impact report was released in July 2010.2010 and a draft final environmental impact report was released in January 2013. ECEC also filed its final license application with FERC in 2009. In December 2010 a draft environmental impact statement was released by FERC evaluating the environmental impacts and the economics of the proposed project. Additionally, the draft environmental impact statement contained the recommendation of FERC’s staff that the project be licensed by FERC. A final environmental impact statement was released by FERC on January 30, 2012.

If the project receives its water quality certification, it is likely that the grant of such certification will result in litigation. We understand that any grant of a water quality certification for ECEC’s project may occur in March or April 2013. Similarly, if the project is licensed by FERC, it is likely that litigation will be commenced over the issuance of the license. If the project is licensed by FERC it is likely that additional and separate litigation will be initiated by the Company over whether ECEC actually has the authority to take our property by eminent domain given the unique nature of ECEC’s project being located in the desert without any existing water way. Even if it is ultimately determined that ECEC would have the right to eminent domain under applicable law, there will be litigation to determine the amount of damages payable to us and others as a result of ECEC’s actions for its private benefit. There may also be adversarial proceedings involving ECEC in MRC’s bankruptcy. ECEC has already filed a suit seeking a request for a declaratory judgment in MRC’s bankruptcy seeking a determination that MRC’s bankruptcy will not prevent ECEC from exercising any eminent domain authority it may have if it received a license from FERC. ECEC’s lawsuit was dismissed by the Bankruptcy Court, without prejudice.

If the completed land exchange is ultimately and permanently reversed, certain lands currently owned in fee by Kaiser will revert back to federal lands, although a substantial amount of such lands will then be controlled by Kaiser because of its federal mining claims. As a result of any final reversal to federal ownership, the federal land may be subject to a title encumbrance resulting from the issuance of the preliminary permit to ECEC by FERC but Kaiser would continue to own in fee the mining pits that are critical to ECEC’s project.

Risk Factors

As discussed in this Annual Report on Form 10-K, there are numerous risks associated with MRC and the Landfill Project. The Landfill Project has been the subject of extensive litigation. MRC was ultimately successful in the state litigation in defending the Land Project, its permits and state and local approvals. However, the federal litigation challenging a completed federal land exchange was ultimately resolved adverse to the Landfill Project with the U.S. Supreme Court’s denial in March 2011 of our petition to review the adverse U.S. 9^th Circuit Court of Appeals decision. With the adverse federal litigation involving the completed land exchange with the BLM concluded, the bankruptcy of MRC and the adverse actions of the District, the Company has determined that it would not invest further in MRC to pursue a “fix” of the land exchange. While the Company has determined that it will not invest further money in MRC to “fix” the land exchange for purposes of a landfill other third parties could fund or acquire the right to pursue the Landfill Project.

In addition, there are risks of the loss of certain critical Landfill Project permits due to the passage of time. The landfill project is also subject to being impacted by natural disasters like the floods that caused significant damage to the rail line in 2003. Certain risks may be uninsurable or are not insurable on terms which we believe are economical.

KAISER VENTURES LLC AND SUBSIDIARIES

The ECEC pumped storage project is also a risk to MRC and the Landfill Project (as well as to other projects at the Eagle Mountain Site) and significant expenditures are anticipated to be incurred in opposition to this potential project.

As discussed above, MRC will need additional funding. There is no assurance that MRC will be funded in the future.future although we are providing MRC a line of credit of up to $500,000 (which could be

We are also dependent upon

KAISER VENTURES LLC AND SUBSIDIARIES

increased to $1 million) to complete its bankruptcy but funding of any draw requests is at the continued services of our executive officers given the complex nature of our projects, the challenges it faces, and the importance of historical information. The losscomplete discretion of the services of our executive officers, especially without advance notice, could materially and adversely impact this project and well as our other business.Company

WEST VALLEY MATERIALS RECOVERY FACILITY AND TRANSFER STATION

Background

West Valley MRF, LLC, referred to as “West Valley,” was formed in June 1997 by Kaiser Recycling, Inc. (now Kaiser Recycling, LLC), a wholly-owned subsidiary of Kaiser, and West Valley Recycling & Transfer, Inc., a wholly-owned subsidiary of Burrtec Waste Industries, Inc. This entity was formed to construct and operate thea materials recovery facility referred to as the West Valley MRF. Under the termsMRF located on property that was a part of the parties’ business arrangements, Kaiser Recycling and Kaiser remain responsible for any pre-existing environmental conditions and West Valley is responsible for environmental issues that may arise related to any future deposit or release of hazardous substances. Kaiser and Burrtec have each separately guaranteed the prompt performance of their respective subsidiary’s obligations.

The West Valley MRF includes an approximate 140,000 square foot building, sorting equipment and related facilities for waste transfer and recycling services. The facility is permitted to handle 7,500 tons of municipal solid waste and recyclable materials per day. As part of its recyclable operations, the West Valley MRF processes for sale in the commodities markets certain materials, including paper, cardboard, aluminum, plastic and glass. West Valley MRF is currently processing, approximately 2,600 - 3,000 tons of municipal solid waste and recyclable materials per day. This processing level remains significantly less than in previous years primarily due to the lingering adverse impacts of the 2008 - 2009 economic recession in Southern California. The West Valley MRF generates cash flow in excess of that necessary to fund its cost of operations and, therefore, has historically been able to distribute cash to cover a portion of Kaiser LLC’s general and administrative costs.former KSC steel mill site. In 2011,2012, the West Valley MRF distributed a total of $1.8 million$750,000 in cash to Kaiser.

The Operating Agreement forKaiser prior to the West Valley MRF provides the opportunity for either Burrtec or Kaiser to buy the other party’s interest in the West Valley MRF at fair market value in the event onesale of the parties desires to accept an offer to buy its interest in the West Valley MRF; in the event of default by a party under the Agreement that is not cured within a specified time period or; in some circumstances, in the event there is a proposed transfer or deemed transfer. For example, a change in the control of Kaiser to a company that is in the waste management business could trigger Burrtec’s option to purchase our interest in the West Valley MRF. We are currently evaluating our options with regard to ourKaiser’s indirect ownership interest in the WVMRF includingin April 2012 which is discussed immediately below.

Sale of Ownership Interest.On April 2, 2012, Kaiser LLC, Kaiser Recycling, Burrtec Waste Industries (“Burrtec”) and West Valley Recycling & Transfer, Inc. (“Buyer”), a wholly owned subsidiary of Burrtec, entered into that certain Purchase Agreement (the “Purchase Agreement”) whereby Kaiser Recycling sold its potential sale.

Financing

Mostownership interest in WVMRF, LLC to Buyer. The sale transaction closed on the same day as the Purchase Agreement was entered into by the parties to the agreement. Kaiser Recycling sold its ownership interest in WVMRF, LLC for a gross cash sales price of approximately $25,769,000. The Company recorded a gain of $20,588,000 in the second quarter of 2012. The Company’s guaranty of the financing foroutstanding California Pollution Control Finance Authority bonds used to finance many of the improvements at West Valley MRF was obtained through California Pollution Control Financing Authority tax exempt bonds. Approximately $9.5 million in bonds were issued in June 1997. These bonds were for Phase 1terminated. However, existing environmental obligations and agreements of the West Valley MRF which consisted of a 62,000 square foot building, sorting equipmentCompany and ancillary facilities. Approximately $8.5 million in bonds were issued in May 2000 which was for Phase 2 of the West Valley MRF which consisted of an 80,000 square foot facility

KAISER VENTURESKaiser Recycling benefiting WVMRF, LLC, AND SUBSIDIARIES

expansion and new sorting equipment. The interest rate for the bonds varies weekly. The rates for 2011 ranged from approximately 0.15% to 0.40% and averaged 0.26%. Due to continuing adverse economic conditions the interest rates on the bonds remained at historic low levels. Bonds issued for Phase 1 have a stated maturity date of June 1, 2012, and bonds issued for Phase 2 have a stated maturity date of June 1, 2030, although West Valley is required, pursuant to an agreement with Union Bank, to periodically redeem a portion of the bonds.

The bonds are secured by a pledge and an assignment of the loan payments made by West Valley MRF and funds that may be drawn on an irrevocable direct pay letter of credit issued by Union Bank of California, N.A. The bonds are backed by letters of credit issued by Union Bank. The letter of credit for the 1997 Phase 1 bonds is currently scheduled to expire June 30, 2012, as the final payment for such bonds is June 1, 2012. The letter of credit for the 2000 Phase 2 bonds which have a final maturity in 2030 is currently scheduled to expire June 30, 2016. Historically, the applicable letters of credit have been renewed as necessary by Union Bank. Kaiser and Burrtec have each severally guaranteed fifty percent (50%) of the principal and interest on the bonds to Union Bank in the event of a default by West Valley MRF.

As of December 31, 2011, the principal amount of bonds outstanding totaled approximately $5,820,000 with $620,000 representing the remainder of the Phase I bonds due on June 1, 2012.

West ValleyBuyer and Union Bank executedremain in place and an escrow of $363,000 was established as a Reimbursement Agreement in 2000 that, among other things, sets the terms and conditions whereby West Valley:

Kaiserrelated events that could arise and impact the WVMRF, LLC and others was purchased by Kaiser Recycling have also provided environmental guaranty agreementsduring the second quarter to Union Bank. Undercover certain of these agreements, Kaiser and Kaiser Recycling are jointly and severally liable for any liability that may be imposed on Union Bank for pre-existing environmental conditions on the West Valley MRF’s property acquired from Kaiser Recycling that the West Valley MRF fails to timely address.

Competition

Burrtec operates a transfer and materials recovery facility in Agua Mansa, California. This facility is located approximately 15 milesexposures. The policy premium of $113,621 was paid from the West Valley MRFescrow account. (See also, “Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION—Section 2: Liquidity and competes for certain waste that might otherwise go to the West Valley MRF. West Valley MRF monitors such waste to ensure that it receives its appropriate share of such waste from the “territory” agreed upon between Burrtec and Kaiser. Burrtec also controls materials recovery facilities in Victorville, California and in the Coachella Valley of California, which are generally not considered to be competitors of the West Valley MRF. Other entities have from time to time proposed to develop materials recovery facilities that would serve the same broad geographic area as that served by West Valley. There is one small materials recovery facility operating in Colton and two other transfer and materials recovery facilities are currently being proposed that could, if built, be competitors for certain of the waste now processed by the West Valley MRF. One such new facility would be in the City of Pomona and the other facility would be in the City of San Bernardino. Such competition would likely adversely impact the volume and profitability of the waste processed at West Valley. Neither facility has been permitted or built as of December 31, 2011.

KAISER VENTURES LLC AND SUBSIDIARIESCapital Resources—Environmental Remediation.”)

In addition, the economic recession that began in 2008 has reduced the amount of waste being disposed of at various landfills in the proximity of the West Valley MRF. As a result, these landfills have become increasingly aggressive in their “tip fee” pricing. This has encouraged some municipal waste that would otherwise come to the West Valley MRF to be disposed of at these landfills. The Company believes that the volumes of waste being processed at the West Valley MRF should increase as the communities in eastern Los Angeles and western San Bernardino counties recover from the economic recession.

Risk Factors

The West Valley MRF faces a number of risks. These risks include risks related to general economic and market conditions that are outside its control.

Risks associated with the financial and credit markets can adversely impact the West Valley MRF. For example, in 2008 the credit markets temporarily caused a dramatic increase in the interest rate on the West Valley MRF’s outstanding bonds. However, beginning in 2009 the interest rates on the West Valley MRF’s bonds declined to historic low levels which continued through 2011and into 2012. A material increase in future interest rates could result in a material increase in the West Valley MRF’s interest expense.

Waste volumes are also being negatively impacted by the continued economic down-turn in Southern California. Although the services of the West Valley MRF are generally considered to be of an essential nature, a weak economy usually results in decreases in the volume of waste generated, which in turn decreases revenues. Additionally, the processing of recyclable materials and their resale in the commodities markets are a significant source of revenue for the West Valley MRF. The volatility of commodity prices and the substantial reduction in commodity prices that began in the fourth quarter of 2008 did, until late 2009, have negative impact on the revenues, margins and net income of the West Valley MRF. A modest recovery of commodity prices began in late 2009 and continued into 2011 although there has been some recent softening in commodity prices. The revenues, margins and net income of the West Valley MRF will likely fluctuate in the future in tandem with the commodity prices of the recyclable materials processed by the West Valley MRF as well as a result of a fluctuation in volume.

The West Valley MRF also faces risks associated with rising and fluctuating operating costs that it may not be able to pass through, in whole or in part, to its customers. For example, the price of fuel is unpredictable and is based upon factors outside the control of the West Valley MRF. During 2007 and 2008, fuel prices dramatically increased. While fuel prices moderated beginning in 2009, fuel prices have again begun to increase and have continued to date to increase in 2012. In addition to the fuel used by the West Valley MRF’s equipment and vehicles, many of its vendors raise their prices as a means to offset their own rising fuel costs. While the West Valley MRF usually attempts to pass through its increased costs such as the cost of fuel, it may not be able to timely pass through all of such increases due to competition or as a result of the terms of a customer’s contract. These increased operating costs would then likely negatively impact the profitability of the West Valley MRF.

Competition for and the loss of expiring waste contracts would also negatively impact the West Valley MRF. Most of the waste processed at the West Valley MRF is as a result, directly or indirectly, of hauler or municipal contracts or franchise agreements. Many of these arrangements are for a specified term and are subject to competitive bidding in the future. In addition, under certain conditions, some of the customers of West Valley MRF may terminate their contracts prior to the scheduled contract term. Governmental action may also affect waste flow to the West Valley MRF. Municipalities may annex unincorporated areas within San Bernardino County and Riverside County where the West Valley MRF currently derives waste; as a result, customers in annexed areas may be required to obtain services from competitors.

KAISER VENTURES LLC AND SUBSIDIARIES

The largest sources of waste for the West Valley MRF are derived through Burrtec affiliated companies, the City of Ontario and Waste Management, Inc. affiliated companies. The loss of waste currently hauled or directed by these companies or the City of Ontario to the West Valley MRF could materially impact West Valley MRF.

The West Valley MRF also faces the risks associated with extensive governmental regulation of the waste industry. The regulatory process requires firms in the waste hauling, waste recycling and/or landfill business to obtain and retain numerous governmental permits to conduct various aspects of their operations, any of which may be subject to revocation, modification or denial. Changes in such governmental policies and attitudes relating to the industry could impair the West Valley MRF’s ability to obtain and maintain applicable permits from governmental authorities on a timely basis. Such regulations could also impact the expansion of existing facilities and/or the providing of new related waste services such as green waste composting. The Company is not in a position at the present time to assess the extent of the impact of such potential changes in governmental policies and attitudes on the permitting processes, but they could be significant. Additionally, West Valley MRF cannot predict with certainty the extent of future costs that may be required under such regulation including the future costs associated with environmental, health and safety laws and regulations. For example, environmental groups and regulatory agencies in California and in the United States have increasingly focused their attention on the emission of greenhouse gases and the impact to climate of such emissions. The passage of laws and regulations to control greenhouse gases, including the imposition of fees or taxes, could adversely impact the West Valley MRF’s operations and financial results. In addition to the governmental permitting and environmental restrictions and conditions that may be imposed directly on the West Valley MRF, governmental authorities may impose other conditions and regulations that impact the West Valley MRF. For example, waste hauling permits/agreements provided by some of the counties served by the West Valley MRF have restricted the flow of waste to the West Valley MRF.

The waste industry is highly competitive. West Valley MRF faces competition from governmental, quasi-governmental, and private sources for municipal solid waste and recyclable materials. See “Item. 1. BUSINESS - West Valley Materials Recovery Facility and Transfer Station-Competition” above.

Any of the factors described above could materially adversely affect the West Valley MRF’s results of operation and cash flows.

Miscellaneous Business

The Company is occasionally able to generate miscellaneous income from time to time from various activities. Such activities have historically included leasing our fee owned land at Eagle Mountain for films, commercials and military and law enforcement training and the sale of rock and other materials. There were material rock sales to third parties from Eagle Mountain during 2012.

OTHER KAISER ASSETS

For a discussion of our other assets such as the Eagle Mountain Townsite, the substantial iron ore, rock, and other resources at the Eagle Mountain Site, and the Lake Tamarisk property, please see “Item 2. PROPERTIES.”

HISTORICAL OPERATIONS AND COMPLETED TRANSACTIONS

The following information is provided as historical background and to put into context our current activities including our currentthe Company’s anticipated dissolution to implement the cash maximization strategy.

KAISER VENTURES LLC AND SUBSIDIARIES

Water Resources

Until the sale of its ownership interest in Fontana Union Water Company, or Fontana Union, to Cucamonga County Water District, referred to as “Cucamonga,” in March 2001 for $87.5 million the Company’s results of operations depended, in large part, on water rights and successfully leasing such rights. Concurrently with the sale of its Fontana Union stock, the Company also received approximately $2.5 million in payments under its water lease with Cucamonga. The sale was completed in the context of settling outstanding litigation between Cucamonga and the Company. Prior to that time Kaiser leased all of its shares in Fontana Union to Cucamonga under the terms of 102-year take-or-pay lease.

Fontana Union owns water rights to produce water from various sources of water near Fontana, California. Kaiser’s ownership of Fontana Union entitled it to receive, annually, a proportionate share of Fontana Union’s water, which water was historically used in connection with Kaiser’s steel making activities.

Mill Site Property

Background. From 1942 through 1983, KSC operated a steel mill in Southern California near the junction of the Interstate 10 and Interstate 15 freeways and approximately three miles to the northeast of Ontario International Airport. The original Mill Site Property owned by Kaiser after it emerged from the KSC bankruptcy consisted of approximately 1,200 acres and portions of the property required substantial environmental remediation. Except for the approximate five acre Tar Pits Parcel, we no longer own any portion of the Mill Site Property. The disposition of the Mill Site Property by us over the past several years is described below.

The California Speedway Property. In November 1995, the Company contributed approximately 480 acres of the Mill Site Property in exchange for common stock in the company that became Penske Motorsports, Inc., a leading promoter of motor sports activities and an owner and operator of automobile racetracks. In December 1996, the Company sold to PMI approximately 54 additional acres of the Mill Site Property, for cash and additional stock in PMI. The California Speedway, a world class motor sports speedway, was constructed on this approximate 534 acres of the Mill Site Property.

In July 1999 International Speedway Corporation, referred to as ISC, through a wholly owned subsidiary, acquired PMI. Kaiser Inc., as a stockholder in PMI, voted for the merger and elected to receive a portion of the merger consideration in cash and a portion in ISC stock. In the transaction Kaiser received approximately $24 million in cash and 1,187,407 shares of ISC Class A common stock, resulting in a gain of $35.7 million. Subsequent to PMI’s acquisition, we sold all of the shares we owned in ISC realizing an additional gain of approximately $6.6 million. The gross cash proceeds we received in 1999 from the merger and the subsequent sale of ISC stock totaled approximately $88 million.

The NAPA Lots. In conjunction with the permitting and development of the California Speedway, we permitted and developed three parcels known as the “NAPA Lots” for sale. In September 1997, the largest NAPA Lot, consisting of approximately 15.5 acres, was sold for a gross sale price of approximately $2.9 million. In November 1999, another of the NAPA Lots, consisting of approximately 7.8 acres, was sold for a gross cash sale price of approximately $1.7 million. The remaining NAPA Lot of approximately 5.2 acres was sold in December 1999 for a cash sale price of approximately $1.1 million.

CCG Ontario, LLC (CCG).In August 2000, we sold approximately 588 acres of our remaining Mill Site Property to CCG for $16 million in cash plus the assumption of virtually all known and unknown environmental obligations and risks associated with the property as well as certain other environmental obligations. Included in the land sold to CCG were ancillary items such as the sewer treatment plant and the water rights associated with the property. As part of the transaction, CCG obtained environmental

KAISER VENTURES LLC AND SUBSIDIARIES

insurance coverage and other financial assurance mechanisms related to the known and unknown

KAISER VENTURES LLC AND SUBSIDIARIES

environmental obligations and risks associated with the transferred property as well as other environmental obligations subject to limited exceptions. In addition, before this sale transaction, we were party to a consent order with the California Department of Toxic Substances Control, referred to as the DTSC, which was essentially an agreement to investigate and remediate property. As part of the sale transaction, this consent order and our financial assurances to the DTSC were terminated, and CCG entered into a new consent order with the DTSC and provided the necessary financial assurances. CCG is a subsidiary of Catellus Corporation which in turn is owned by ProLogis. ProLogis is considered one of the world’s largest developerdevelopers of commercial warehouse space. ProLogis and many of its subsidiaries are continuing to be adversely impacted by adverse worldwide and real estate related economic conditions. These adverse conditions increase the risk that CCG could default in the obligations it assumed in connection with its purchase of the property. For additional information, see “Part I, Item 1. BUSINESS - BUSINESS—Historical Operations and Completed Transactions - Mill Site Transactions—Environmental Matters” below.

Rancho Cucamonga Parcel.In October 2000, the Company completed the sale of approximately 37 acres of the Mill Site Property, known as the Rancho Cucamonga parcel, to The California Speedway Corporation. The gross cash sale price was approximately $3.8 million.

West Valley MRF Property.At the time of the formation of West Valley in 1997, Kaiser Inc. contributed 23 acres of the former Mill Site Property, on which a 62,000 square foot building, sorting equipment and related facilities were constructed during Phase 1 of the West Valley MRF development. Under the terms of our agreements with West Valley, we contributed additional land approximating 7 acres after that land’s environmental remediation in 2000. We are also obligated to contribute the Tar Pits Parcel to West Valley MRF at its option, upon the environmental remediation of the Tar Pits Parcel in a manner suitable for use by West Valley MRF. The ownership interest in WVMRF, LLC was sold in the second quarter of 2012.

The Tar Pits Parcel is the only acreage that we continue to indirectly own at the former Mill Site Property. However, effective April 2, 2012, WVMRF, LLC leased material portions for the Tar Pits Parcel from Kaiser Recycling, LLC, the subsidiary of Kaiser that owns the Tar Pits Parcel. The lease is for 50 years with the right to extend the lease for 50 years in exchange for: (i) payment of all the property taxes for the Tar Pits Parcel; (ii) insuring the Tar Pits Parcel and naming Kaiser Recycling LLC as an additional insured for general liability purposes; and (iii) performing various maintenance and security obligations on the property being leased.

Environmental Matters

The operation of a steel mill by the Company’s predecessor, KSC, resulted in known contamination of limited portions of the Mill Site Property. As discussed above, the Company’s consent order with the DTSC was terminated in connection with the sale of approximately 588 acres of the remaining Mill Site Property to CCG for $16 million in cash plus the assumption of virtually all known and unknown environmental obligations and risks associated with the property as well as certain other environmental obligations. Concurrently with that termination, CCG entered into a new consent order with the DTSC, in which CCG assumed responsibility for all future investigation and remediation of the Mill Site Property it purchased, as well as various other items covered under its CCG consent order. In addition, CCG assumed and agreed to indemnify the Company against various contractual environmental indemnification and operations and maintenance (“O&M”) obligations the Company has with purchasers of other portions of the Mill Site Property. In addition, CCG is obligated to remediate the Tar Pits Parcel pursuant to a solidification and capping strategy. Except for continuing inspection and maintenance obligations, and the continuing groundwater investigation, the remediation of the Tar Pits Parcel has been completed although the Company may review additional remediation possibilities as a means of making such parcel useable property.completed.

CCG has completed most of the required environmental investigations and remedial actions at the Mill Site Property. The remaining material items associated with the investigation and remediation of the Mill Site Property include continued implementation of a groundwater investigation program, the preparation of various completion, testing and monitoring reports and continuing operations and maintenance.O&M. The operations and maintenanceO&M obligations could continue for at least thirty years. In the second quarter of 2012 the DTSC provided CCG a letter confirming that CCG has satisfied the consent order for the Mill

KAISER VENTURES LLC AND SUBSIDIARIES

Site property except for the continued implementation of the groundwater investigation program and continuing O&M. CCG is obligated to pay for the costs associated with any future O&M activities. In connection with the groundwater investigation in January 2013 the DTSC communicated to ProLogis that it believed that there were releases to groundwater of hazardous substances from several areas of the Mill Site Property, including the Tar Pits Parcel. However, it appears that the matters of concern are below maximum contamination levels. Since CCG is primarily responsible for groundwater at the former Mill Site Property it is addressing the DTSC’s concerns. If this should give rise to a claim, our current insurance should cover such claim.

Many of the environmental obligations assumed by CCG were originally backed, in whole or in part, by various financial assurance mechanisms or products. With the completion of much of the required investigation and remediation work at the Mill Site Property, several of the original financial assurances

KAISER VENTURES LLC AND SUBSIDIARIES

are no longer necessary or have been reduced. However, for example, a real estate environmental liability insurance policy with a policy limit of $50 million on which we are a named insured remains permanently in place.place for the Mill Site Property. This insurance policy is in addition to the $50 million insurance policy that expires on June 30, 2013, that is discussed below. All remaining financial assurance mechanisms or products are subject to their terms. In addition, there are certain exceptions to CCG’s assumption of the Company’s prior environmental obligations.

We have established reserves to address potential future environmental liabilities and obligations. These potential environmental liabilities include, among other things, environmental obligations at the Mill Site Property that were not assumed by CCG, such as any potential third party damages from the identified groundwater plume of total dissolved solids and organic carbon, environmental remediation work at the Eagle Mountain Site, and third-party bodily injury and property damage claims, including asbestos claims not covered by insurance and/or paid by the KSC bankruptcy estate. In 2004, this reserve was again reduced to approximately $2.4 million to reflect settlement of a third party claim related to the groundwater plume discussed above. This reserve was further reduced in 2005 as a result of reclassifying $500,000 to the Eagle Mountain Townsite Cleanup Reserve. This environmental reserve was increased by $1.2 million as of December 31, 2005, for Eagle Mountain Townsite environmental related matters. The reserve is reduced from time to time as a result of remediation and related actives that take place at Eagle Mountain and as a result of work conducted in association with the former Kaiser Mill Property. As of December 31, 2011,2012, based upon current information, we estimate that our future environmental liability related to certain matters and risks not assumed by CCG, in its purchase of the Mill Site Property in August 2000, would be approximately $2.7$2.3 million for which a reserve has been established. We periodically review the adequacy of our environmental reserve.reserve and will be doing so in connection with the anticipated dissolution of the Company. As a result of these reviews, there may be adjustments in the environmental reserve during the projected dissolution of the Company.

In keeping with our goal to minimize our potential liabilities, including the potential liabilities outlined above, we purchased effective June 30, 2001, a 12-year $50 million insurance policy, which is expected to cover substantially any and all environmental claims (up to the $50 million policy limit) relating to the historical operations of the Company.Company for claims made during the term of such policy. Such policy is in addition to the insurance policy that covers the Mill Site Property as discussed above. See “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” in Part II, Item 7.,7, of this Annual Report on Form 10-K. Since this “claims made” policy terminates on June 30, 2013, the Company may not have insurance coverage for certain previously covered environmental and other claims made after the expiration of the policy term on June 30, 2013.

The Company is involved, from time-to-time, in legal proceedings concerning environmental matters. See “Part I, Item 3. LEGAL PROCEEDINGS.”

Tar Pits Parcel

Currently, the only remaining property we ownowned at the Mill Site Property is an approximate 5 acre parcel known as the Tar Pits Parcel.Parcel which is owned by Kaiser Recycling, LLC, a wholly-owned subsidiary of Kaiser. Under ourthe agreement with the West Valley MRF, we areKaiser Recycling is obligated to

KAISER VENTURES LLC AND SUBSIDIARIES

contribute the Tar Pits Parcel to the West Valley MRF, at its option, upon the environmental remediation of the property. Except for ongoing inspection and monitoring activities, as well as the groundwater investigation that covers the Mill Site Property, including the Tar Pits Parcel all material remediation of the Tar Pits Parcel was completed in 2002 at CCG’s, expense. CCG is responsible for this property’s environmental remediation pursuant to the terms of the purchase agreement entered into between CCG and Kaiser in August 2000 relating to Kaiser’s sale of approximately 588 acres of the Mill Site Property. However,Property and for the Company continues to explore additional alternatives as a meansongoing inspection and maintenance of making the Tar Pits Parcel or portions thereof useable property. See “Part I, ItemParcel’s environmental remediation measures. As discussed in more detail above under “Item 1. BUSINESS - Historical Operations and Completed Transactions - Mill Site Transactions—West Valley MRF Property,” effective April 2, 2012, WVMRF, LLC leased material portions for the Tar Pits Parcel from Kaiser Recycling. The lease is for 50 years with the right to extend the lease for 50 years. See “Part I, Item 1. BUSINESS—Historical Operations and Completed Transactions—Environmental Matter.

Employees

As of March 15, 2012,1, 2013, Kaiser LLC had no employees. However, Kaiser LLC leases employees through Business Staffing, Inc., which was a subsidiary of Kaiser LLC until the close of business December 31, 2010, and reimburses Business Staffing for the actual costs associated with 75 full-time (4(3 at Ontario, California and 32 at Eagle Mountain, California) and 43 permanent part-time employees (1 at Eagle Mountain and 32 in Ontario, California).

KAISER VENTURES LLC AND SUBSIDIARIES

We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item. However, we do discuss many of the risk factors that may impact the Company, its remaining projects and opportunities, and the anticipated dissolution and liquidation of the Company throughout this Annual Report on Form 10-K. In addition, please see the discussion under “Forward Looking Statements” on page 1 of this Report on Form 10-K.

We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item. However, there are no unresolved comments from the Securities and Exchange Commission,

KAISER VENTURES LLC AND SUBSIDIARIES

Eagle Mountain, California

Overview and Regional Geography and Access.The Eagle Mountain Site which includes the Eagle Mountain mine and the adjoining townsite are located in Riverside County, approximately ten miles northwest of Desert Center, California. Desert Center is located on Interstate 10 between Indio and Blythe, California. See the vicinity map for the Eagle Mountain Site on the following page. Vehicular access to the Eagle Mountain Site is by a paved county road. Within the mine site, there are gravel and dirt roads that were built for the iron ore mining that took place. The mine is also accessed by a railroad as more fully described below.

The Eagle Mountain open-pit iron ore mine was operated by KSC on a full-time basis from approximately 1948 to 1983. However, even though iron ore mining was curtailed by 1983, the mine has remained active and has continued to ship rock, rock products, iron ore pellets, etc. as market conditions allow. Substantial shipments of rock products were made from KEM’s fee owned land at the Eagle Mountain Site in 2012.

The heavy duty maintenance shops and electrical power distribution system have been kept substantially intact since the 1982 shutdown of large-scale iron ore mining. Electrical power is provided to the Eagle Mountain Site by Southern California Edison. We also own several buildings, a water distribution system, a sewage treatment facility, and related infrastructure. However, virtually all of the equipment and all of the mining and processing facilities for large-scale iron ore mining are no longer in existence. There would be substantial costs associated with the improvement of the infrastructure and to build the facilities necessary to resume the previously suspended large-scale mining operation. The Eagle Mountain Townsite includes more than 300 mostly unoccupied single family homes, approximately 100 of which were partially renovated in the 1990s. Due to the passage of time and the impacts of weather, a number of the remaining buildings and houses at the Eagle Mountain Townsite are deteriorating at a faster rate than anticipated and may not be salvageable. Accordingly, we may need to demolish or rehabilitate a number of structures over the next several years. We currently have reserves recorded as of December 31, 2011,2012, totaling $3.3 million ($1.0 for asbestos containing products abatement and $2.3 million for demolition) for such purposes.

Until December 31, 2003, a private prison was operated at the Eagle Mountain Townsite. With the closure of the private prison we implemented a plan in 2004 to reduce our activities at the Eagle Mountain Townsite. We are continuing to seek appropriate tenants for a lease of all or portions of the Eagle Mountain Townsite but have been unsuccessful to date in finding long-term permanent tenants. The completed adverse federal land exchange litigation has and may further hinder these efforts.

KAISER VENTURES LLC AND SUBSIDIARIES

Other than possible future environmental remediation associated with asbestos containing products in certain structures for which a reserve has been recorded, we are not aware of any material environmental remediation required at the Eagle Mountain Townsite that could require us to expend substantial funds or that could lead to material liability. However, under the terms of an approved mine reclamation plan for a portion of the Eagle Mountain mine site there are ongoing reclamation activities for which the Company has also recorded a reserve for the current estimated cost of such activities.activities and has posted appropriate financial assurances.

We own four deep water wells, two of which are operational, and two booster pump stations that serve the Eagle Mountain Site.

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KAISER VENTURES LLC AND SUBSIDIARIES

VICINITY MAPFORTHE EAGLE MOUNTAIN SITE

KAISER VENTURES LLC AND SUBSIDIARIES

Land Ownership.In and around the Eagle Mountain Site, with the completed federal land exchange, the Company currently has various possessory federal mining claims of approximately 1,472 acres and holds approximately 8,644 acres in fee simple (which includes the approximate 1,300 acre Eagle Mountain Townsite). Approximately 4,654 acres of this property willwould be sold as a part of sale of the landfill project,Landfill Project, assuming such sale is ever completed. See “Part I, Item 1. BUSINESS - BUSINESS—Mine Reclamation and Eagle Mountain Landfill Project.” However, if the completed adverse federal land exchange is ultimately unwound it will impact the amount and nature of our land holdings. In such instance we would be placed back to the same position as prior to the land exchange, we would own or control in and around Eagle Mountain approximately 1,800 acres in fee and 9,550 acres in various possessory federal mining claims. In addition, the reversal of the land exchange would reinstate a reversionary interest contained in the original grant of approximately 460 acres of the Eagle Mountain Townsite. The reversionary interest means that this land could be returned to the federal government in very limited circumstances.

Eagle Mountain Geology Overview.California is divided into 10 Geological Provinces that define areas of similar structure and bed rock. The Eagle Mountain Site is located in the northeastern portion of the Eagle Mountains near the lower western edge of the Mojave Desert Physiographic Province of California, slightly east of the southern limits of the adjacent Transverse Ranges Physiographic Province. The major rock units in the region include Jurassic to Cretaceous-age plutonic intrusive rocks and Paleozoic and Precambrian metamorphic and meta-sedimentary rocks. At the Eagle Mountain Site, the meta-sedimentary rocks generally trend northwest and are surrounded and underlain by intrusive granitic rocks. The meta-sedimentary rock units have been folded into a northwest-trending anticline, which continues into the north-central Eagle Mountains.

In general, the Eagle Mountain iron ore deposits are in contact with metamorphized sedimentary rocks that show much folding, faulting, uplift and repeated injections of magnetic and hydrothermal fluids. The iron ore is not continuous and occurs in many narrow to wide segregations separated by various amounts of waste rock. Magnetite plus pyrite comprised the primary iron mineralization, which was subsequently oxidized into hematite and goethite in the higher elevation zones of the deposit.

Iron Ore.The Eagle Mountain mine is the site of what was the largest iron ore mining operation west of the Mississippi River. KSC recovered more than 225 million tons of iron ore from four pits (i.e., the East Pit, Central Pit, Black Eagle Pit [North], and Black Eagle Pit [South]). Regular iron ore mining was suspended at the Eagle Mountain Site by 1983 due to the pending closure of the KSC steel mill near Fontana, California. Thus, mining was suspended due to market conditions and not due to a lack of iron ore.

During 2010Over the last several years the price of iron ore dramatically increased on the world market reachingmarket. However, as a commodity, the price of iron ore is volatile. In 2010 the spot price for iron ore (at 62.5% Fe content) reached over $185.00 per metric ton for high qualityand then dropped to below $90.00 per ton in early September 2012. The price of iron ore and concentrated ore.rebounded from its September 2012 low to over $150 per metric ton in January 2013. In contrast, in 1982, the average price for iron ore was less than $15.00 per metric ton. As a result of the current price for iron ore (approximately $140$150 per metric ton as of the date of the filing of this Report) and the estimated amount of iron ore at the Eagle Mountain Site, a number of parties have expressed interest in pursuing the iron ore and other mineral resources at Eagle Mountain. We engagedcontinue to work with a third-party to assist us in the evaluation of the Eagle Mountain iron ore opportunity and in seeking third-parties that would be interested in potentially acquiring these iron ore and other mineral resources. In October 2011, we entered into an option and purchase agreement which involved the sale of the Company’s subsidiaries that control the Eagle Mountain opportunity. However, as a direct result of the actions of the District and the bankruptcy filing by MRC, the option holder did not exercise its option. The Company and MRC continue to actively market the property and reserves to potential interested parties and explore various possible transactions. For additional information, see “ITEM 1: BUSINESS-Summary of Business-Cash Maximization Strategy.”

KAISER VENTURES LLC AND SUBSIDIARIES

Through KSC’s prior drilling program and mining activities, KSC’s Mining Engineering Department estimated as of January 1983, that there were approximately 335 million tons^1,2 of measured and indicated iron ore at Eagle Mountain as summarized in the table below.

ESTIMATED EAGLE MOUNTAIN GEOLOGIC ORE RESERVES

(ASOF JANUARY 1, 1983)

Subsequent to the estimates made by KSC’s Mine Engineering Department, the U.S. Geological Survey released a preliminary report in 2001 titled “Eagle Mountain Mine-geology of the former Kaiser Steel operation in Riverside County, California.”This report states that: “This investigation of the Eagle Mountain Mine area, though cursory, revealed new structural, alteration, and stratigraphic relations.” With this new geologic information, the report concludes that there may be as much as 550 million tons of iron ore in the Eagle Mountain area.

In addition to the in-ground iron ore, there is an estimated 10044 million tonscubic yards of coarse tailings and an estimated 3514 million tonscubic yards of fine tailing resulting from prior iron ore processing activities from which iron can likely be extracted economically.extracted. Iron, precious metals such as gold and other minerals may exist in

KAISER VENTURES LLC AND SUBSIDIARIES

in sufficient quantity to justify a reprocessing of such tailings given the current recovery technology that is available and the current market price of iron, gold and other minerals.

The actual total amount, type, quality and qualityrecoverability of the iron ore cannot be ultimately determined without further extensive exploration, measurement and testing. Additionally, not all of iron ore resources may be economically recoverable. Economically recoverable ore depends upon a number of factors, including, but not limited to, the market price for iron ore, the cost to mine, process, and ship the iron ore, the cost of the infrastructure improvements necessary to support the mining, processing and processingshipping operations, as well as, those necessary to transport the ore, the location, nature of and iron content of the iron ore, operational constraints, the cost of any financing, etc. In addition, certain permits and consents will likely be required prior to the resumption of large-scale extractive iron ore mining. However, we believe that we have a vested mining permit for rock, iron ore, and for other minerals located at the Eagle Mountain Site.Site and have been shipping rock, rock products and iron ore products pursuant to such vested mining permit.

Portions of the iron ore reserves, including the coarse and fine tailings which contain recoverable iron ore, are located on the current landfill projectLandfill Project property. Thus, if there should be a landfill project, any development of the iron ore opportunity would require the cooperation of the owner of the Landfill Project. However, based upon a very preliminary analysis, there does not appear to be at this time any material reason why the mining and processing of the iron ore reserves and tailings would be physically incompatible with a landfill project. In fact, we currently believe that under certain circumstances, the mining and processing of the iron ore reserves and tailings and the landfill project could be mutually and economically beneficial. As an example, the Eagle Mountain railroad, once repaired, could serve both the landfill project and any iron ore shipping. In addition, renewed iron ore mining would also provide additional air space and “daily cover” materials for the landfill project.

Pursuing the possible Eagle Mountain iron ore opportunity is subject to a number of risks, as noted above. Accordingly, there is no assurance that we will be able to successfully consummate an Eagle Mountain iron ore mining transaction or opportunity.

Rock/Aggregate

As a result of previous iron ore mining at Eagle Mountain, millions of tons of rock of various sizes have been stockpiled on portions of the property around the Eagle Mountain townsite. For example, it is estimated that over 165 million tons of stockpiled rock is located on our fee-owned Eagle Mountain property known as the West End Property that is not a part of the landfill project. Additionally, it is estimated that there is over 1 billion tons of rock in-place on the West End Property. The estimate of the amount of rock on our West End Property is summarized in the table below. This estimate was prepared by an unrelated third-party in connection with an appraisal for a possible mineral exchange with the State of California that was not completed.

WEST END PROPERTY^*- EAGLE MOUNTAIN SITE

KAISER VENTURES LLC AND SUBSIDIARIES

Even though iron ore mining was curtailed as of 1983, the Eagle Mountain mine has remained active. We have shipped rock, rock products and stock pile iron ore products over the years. Substantial shipments of rock and rock products were made in the recent past including in 20112012, and we are exploring opportunities to increasesecure future rock sales and shipments. Although the quality of the stockpiled rock is generally very high, the significant current cost of shipping the rock by truck outside the immediate area around Eagle Mountain has prevented the Company from capitalizing on this significant asset.

Other Mineral Resources. Previous tests conducted on the coarse and fine tailings piles have indicated that gold and other minerals are present within such materials. However, there has not been sufficient systematic testing of these tailings to determine if there are sufficient quantities of gold or other minerals for such minerals to be economically recoverable.

Water Resources

Eagle Mountain is located in the Chuckwalla Groundwater Basin, which is an unadjudicated groundwater basin. During its peak operation, Eagle Mountain used up to approximately 7,500 acre feet annually to support mining operations and the Eagle Mountain townsite. We are exploring what opportunities may be available to market this water to the extent that water may be available prior to or during the construction and operation of the landfill project and after any resumption of large-scale iron ore mining. Depending upon the amount of groundwater used by others, additional water may be available beyond that which was historically pumped.

Railroad

To transport ore from the Eagle Mountain mine to the mill site (see below), KSC constructed a 52-mile heavy duty rail line connecting the mine to the main Southern Pacific rail line at Ferrum, California. While we own in fee approximately 10% of the 52-mile railroad right-of-way the major portion of the railroad right-of-way consists of various private easements and an operating right-of-way from the BLM. The railroad is included in the lease to MRC. The railroad is not abandoned. As noted above, portions of the railroad suffered significant flood damage in 2003 and there has been other damage to the railroad since such date. Additionally, the Union Pacific Railroad removed the track and switch at Ferrum Junction in 2011. In addition to repairing flood damage and replacing Ferrum Junction, significant maintenance and possible upgrades will be required for the rail line to become fully operational. Even with the adverse federal litigation, right-of-way granted under the original federal right-of-way grantedissued under the Private Law 790 would remain in place. In addition, if the land exchange is ultimately fully reversed, Kaiser would reacquire approximately 2,800 acres of potentially valuable desert tortoise habitat along or near the railroad that had been conveyed to the BLM as a part of the October 1999 land exchange. For additional information, see “Part I, Item 1. BUSINESS—Mine Reclamation and Eagle Mountain Landfill Project and Pending Sale—Flood Damage to Railroad.”

KAISER VENTURES LLC AND SUBSIDIARIES

Fontana, California

With exception of the approximate 5 acre Tar Pits Parcel, which is owned by Kaiser Recycling, LLC, a wholly-owned subsidiary of the Company, we no longer ownsown any property at the former Mill Site Property. With the exception of ongoing maintenance and inspection obligations, and the ongoing groundwater investigation of the Mill Site Property, including the Tar Pits Parcel, the environmental remediation of this parcel has been completed although the Company is exploring

KAISER VENTURES LLC AND SUBSIDIARIES

additional remediation alternatives as a means to make the parcel usable.completed. See “Part 1, Item 1. BUSINESS - BUSINESS—Historical Operations and Completed Transactions - Transactions—Mill Site Property.”

Lake Tamarisk, California

Lake Tamarisk is an unincorporated community located two miles northwest of Desert Center, California and approximately 8 miles from the Eagle Mountain mine. This community has 150 improved lots situated around two recreational lakes and a nine-hole golf course. With 70 homes and a 150-space mobile home park, the community has an average year-round population in excess of 150. Lake Tamarisk Development, LLC, a wholly owned subsidiary of Kaiser, owns: (i) 72 single family improved lots, including, one residential structure; (ii) 3 multi-family lots totaling 12.42 acres; (iii) 1 commercial lot totaling approximately 3.31 acres; (iv) an approximate 170 acre parcel of unimproved land across the highway from the main entrance to Lake Tamarisk; (v) an approximate 200 acre unimproved parcel adjoining the nine-hole Lake Tamarisk golf course; and (vi) an approximate 39 acre unimproved parcel adjacent to Lake Tamarisk. We are seeking to sell all of our Lake Tamarisk properties.

In the normal course of our business we are involved in various claims and legal proceedings. Significant legal proceedings, including those which may have a material adverse effect on our business or financial condition, are summarized below. However, the following discussion does not, and is not intended to, discuss all of the litigation matters to which we are or may be or become a party. Should we be unable to resolve any legal proceeding in the manner we anticipate and for a total cost within close proximity to any potential damage liability we have estimated, our business and results of operations may be materially and adversely affected.

Iron Partners Litigation.In April 2008, the Company, along with KSC Recovery, Inc. (the Kaiser Steel Corporation bankruptcy estate), and the federal government were sued by Iron Partners LLC in the U.S. District Court for the Western District of Washington (Iron Partners, LLC v. Maritime Association, United States Department of Transportation, et al., U.S. District Court, Western District Washington at Tacoma, Case No. C08-5217 RJB). TheThis case is tentatively settled with the full amount of the settlement to be paid by one of the Company’s insurance carriers. By way of background, the allegations in the case are that the Company and KSC Recovery, Inc. are the successors to the Kaiser Company, Inc. and that such company leased or owned certain property in Vancouver, Washington in the 1940’s that served as a shipyard. It is further alleged that hazardous wastes were buried on such property for which the Company is liable. The plaintiff, Iron Partners, LLC, now owns such property. The plaintiff seekssought damages under the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), the Washington Model Toxic Control Act and under common law trespass. The City of Vancouver, Washington and another adjoining land owner have indicated that they maymight intervene as plaintiffs in the case since a portion of the buried debris appear to extend onto property owned by the city and by the other adjoinadjoining property owner. While the City of Vancouver did not formally intervene in the matter, a settlement with the City of Vancouver was reached in 2011. SuchThe Company’s portion of such settlement was paid by one of the Company’s insurance carriers. The other property owner has yet to intervene in the case.actively pursue any claim it may have. The federal government was able to secure a dismissal of all common law claims against it. The government, however, remains in the case with respect to the CERCLA claims. We initiated a third-party complaint against another company believing that such company may be responsible in whole, or in part, for some the buried debris. The amount of damages and legal fees currently claimed by Iron Partners is approximately $1.6 million. This litigation is currently scheduled for trial in April 2012. This litigation has been tendered to our insurance carrier which has accepted the defensesettlement of this litigationcase is subject to a reservationfinal documentation and approval by the United States Department of rights.Justice.

Portland Harbor Superfund Site. In late March 2009 KSC Recovery, Inc., the bankruptcy estate of the former KSC, and the Company were notified that they each may be a potential responsible party in

KAISER VENTURES LLC AND SUBSIDIARIES

connection with the investigation and clean-up of the Portland Harbor Superfund Site, Portland, Oregon. Presumably, the allegation of being a potentially responsible party is based upon the fact that Kaiser

KAISER VENTURES LLC AND SUBSIDIARIES

Company, Inc., the prior name of Kaiser Steel Corporation, constructed and managed the Swan Island Shipyard at Portland, Oregon, for and at the direction of the United States during WW II. Approximately 150 entities have been identified as potentially responsible parties for the site. Apparently over $70 million has been spent to date just to characterize the environmental problems affecting the Portland Harbor and a recent study estimated that remediation costs could range from $440 million to $2.2 billion depending upon the scope of the remediation and remediation standards ultimately determine for the Portland Harbor site. The Company has elected to participate in meetings which seek to settle and allocate among all the alleged potentially responsible parties past and future investigative and remediation costs. The Company has tendered this claim to its environmental insurance carrier and the carrier is providing a defense for the claim.

Asbestos Litigation. There are pending asbestos litigation claims, primarily bodily injury, against Kaiser LLC and Kaiser Steel Corporation (the bankruptcy estate of Kaiser Steel Corporation is embodied in KSC Recovery, Inc.). There currently are approximately 107 active suits. Many of the plaintiffs allege that they or their family members were aboard Kaiser ships or worked in shipyards in the Oakland/San Francisco, California area or Vancouver, Washington area in the 1940’s and that the Company and/or KSC Recovery were in some manner associated with one or more shipyards or has successor liability. However, approximately half of the current claims relate to other facilities such as the former Kaiser Steel Mill Site Property.

Most of these lawsuits are third party premises claims alleging injury resulting from exposure to asbestos or asbestos containing products and involve multiple defendants. The Company anticipates that it, often along with KSC Recovery, will be named as a defendant in additional asbestos lawsuits. Additionally, plaintiffs are seeking to add to the sites that the Company may have historically had a connection with on behalf of the United States. With a number of large manufacturers and/or installers of asbestos and asbestos containing products filing for bankruptcy over the past several years, the likelihood that additional suits will be filed against the Company has increased. In addition, the trend has been toward increasing trial damages and settlement demands. Virtually all of the complaints against us and KSC Recovery are non-specific, but involve allegations relating to pre-bankruptcy activities. It is difficult to determine the amount of damages that we could be liable for in any particular case until near the time of trial; indeed, many of these cases do not include pleadings with specific damages. The Company vigorously defends all asbestos claims as is appropriate for a particular case.

Of the claims resolved to date, more than approximately 60% have been resolved without payment to the plaintiffs. However, there was one significant asbestos claim that was settled in 2012 for nearly $1.0 million. To date, substantially all defense costs and any settlements have been paid by third-parties. The Company believes that it currently has substantial insurance coverage for the asbestos claims and has tendered these suits to appropriate insurance carriers. However, one of the Company’s main insurance policies that covers asbestos claims expires on June 30, 2013.

Eagle Crest Energy CompanyMine Reclamation Bankruptcy.. On March 14, 2012, ECECOctober 30, 2011, MRC filed a declaratoryvoluntary petition for relief actionunder Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court against MRC, Kaiser Eagle Mountain, LLC and Kaiser Ventures. The lawsuit seeks declaratory relief only and not damages. In summary, the suit seeks a declaration from the Bankruptcy Court stating that ECEC’s right of eminent domain (with ECEC assuming it would have such a right) and the process of seeking a license from FERC is not impacted by MRC’s bankruptcy.

Prior Federal Landfill Project Litigation. On September 20, 2005, the U.S. District Court for the Central District of California, EasternRiverside Division, issuedbankruptcy case number 6:11-bk-43596 (the “Bankruptcy Court”). MRC continues to operate its opinionbusiness as a “debtor in Donna Charpied,et al., Plaintiffs v.United States Department possession” under the jurisdiction of Interior, et al., Defendants (Case No. ED CV 99-0454 RT (Mex))the Bankruptcy Court and inNational Parks accordance with the applicable provisions of the Bankruptcy Code, Rules and Conservation Association, Plaintiff v.Bureauorders of Land Management, et al., Defendants (ED CV 00-0041 RT (Mex)). That decisionthe Bankruptcy Court. On March 30, 2012, the District filed a proof of claim in MRC’s bankruptcy case. While the amount of the District’s claim is adversenot certain from its proof of claim, it asserts that the claim could amount to the Landfill Project inor exceed “hundreds of millions of dollars.” The District further claims that it sets aside a land exchange completed betweenwill seek recovery of its damages from Kaiser LLC independently of the bankruptcy proceeding. However, no legal proceeding against Kaiser LLC has been commenced as of the date of the filing of this Annual Report on Form 10-K. The Company and BLM in October 1999MRC will vigorously defend the allegations asserted by the District, including asserting claims against the District and two BLM rights-of-way.others as may be appropriate. MRC

KAISER VENTURES LLC AND SUBSIDIARIES

The Company andbelieves that any option the U.S. Department of Interior each appealed the decisionDistrict may have had to the U. S. 9^th Circuit Court of Appeals. On November 10, 2009, a three-judge panel of the U.S. 9^th Circuit Court of Appeals issued its decision in the Company’s land exchange litigation and Landfill Project appeal. In a 2 to 1 decision the majority opinion was adverse toacquire the Landfill Project in that it upheld portions of the prior U. S. District Court decision setting aside the completed land exchange. A slightly modified decision was released on May 19, 2010, by the U.S. 9^th Circuit Court of Appeals but the modified decision did not change any of the conclusions of the majority opinion. We sought to have the decision reversed by an en banc panel of eleven judges of the U.S. 9^th Circuit Court of Appeals but such request was denied on July 30, 2010. We then elected to seek U.S. Supreme Court review of the adverse U.S. 9^th Circuit Court of Appeals decision, but the U.S. Supreme Court on March 28, 2011, declined to accept our appeal. With the decision of the U.S. Supreme Court not to hear the appeal of the adverse decision of the 9^th Circuit Court of Appeals, there is no longer any pendingexists. It is likely that there will be adversarial claim proceedings and litigation andin the adverse federal litigation is final and fully concluded as no further appeals are available.Bankruptcy Court

Claims Against the KSC Bankruptcy Estate. The bankruptcy estate of KSC was officially closed by order of U.S. Bankruptcy Court for the District of Colorado on October 2, 1996. However, the bankruptcy case was reopened in 1999 in connection with certain litigation matters. Since that time, the bankruptcy case was again closed, however, the administration of KSC’s bankrupt estate will continue for several more years.

From time to time various environmental and similar types of claims that relate to Kaiser Steel pre-bankruptcy activities, are asserted against KSC and Kaiser LLC. Excluding the asbestos claims, there has been an average of one to three such claims a year for the past several years. For example, as discussed above in “Portland Harbor Superfund Site” KSC Recovery, Inc. the KSC bankruptcy estate, was notified in late March 2009 that it was identified as a potentially responsible party in connection with the investigation and clean-up of the Portland Harbor Superfund Site. Another example is that there is the possibility of a groundwater contamination claim at the Mill Site Property. Since CCG is primarily responsible for groundwater at the former Mill Site Property it is addressing the DTSC’s concerns. In the event of any claim against Kaiser LLC or KSC Recovery for this matter such claim should be covered by currently existing insurance. See “Item 1. BUSINESS—Historical Operations and Completed Transactions—Environmental Matters.”

In connection with the KSC plan of reorganization, Kaiser, as the reorganized successor to KSC, was discharged from all liabilities that may have arisen prior to confirmation of the plan, except as otherwise provided by the plan and by law. Although Kaiser believes that in general all pre-petition claims were discharged under the KSC bankruptcy plan, there have been some challenges as to the validity of the discharge of certain specified claims, such as asbestos claims. If any of these or other similar claims are ultimately determined to survive the KSC bankruptcy, or if they are not covered by insurance it could have a materially adverse effect on Kaiser’s business and value.

Not applicable.

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KAISER VENTURES LLC AND SUBSIDIARIES

PART II

Kaiser Inc.’s common stock was traded on the NASDAQ Stock Market^sm under the symbol “KSRI” until November 30, 2001. In connection with the conversion of Kaiser Inc. to a limited liability company each Kaiser Inc. stockholder of record as of December 5, 2001, received $10.00 in cash plus one (1) Class A Unit in Kaiser LLC for each share of stock. The Class A Units are subject to significant trading restrictions and are not listed for trading on any securities exchange. As a result, Kaiser Inc.’s common stock ceased being publicly traded on November 30, 2001. In connection with the merger, the Class A Units were independently appraised and determined to have a value of $1.50 as of November 30, 2001. Prior to the distribution of $10.00 in cash per share and the Class A Units Kaiser distributed $2.00 cash per share to stockholders of record as of December 13, 2000. In May 2012, an additional $1.50 per unit distribution was made to the Company’s Class A Unitholders.

The Class A Units are subject to substantial transfer restrictions and, therefore, the Class A Units are not traded on an established securities market and are not tradable on a secondary market or the substantial equivalent thereof. However, we are aware that there have been a very limited number of private purchase and sale transactions since November 30, 2001. In the third quarter of 2008 a third-party commenced a tender offer to purchase up to 1,400,000 of our Class A Units at a price of $.50 per unit less a pro-rata share of transfer costs. This third party ultimately terminated its tender offer without the purchase of any units. In response to such third party tender offer, we conducted a self-tender offer for a portion of our Class A Units. As a result of the tender offer conducted by us that closed on December 1, 2008, we purchased 841,544 of our Class A Units at a price of $.90 per unit. We also paid all related transfer costs for the units purchased by the Company. In 2009 there were a limited number of units purchased at prices ranging from $.65 per unit to $.90 per unit. However, with the November 2009 adverse decision of the U.S. 9^th Circuit Court of Appeals involving the Landfill Project, the last price of which we are aware for the actual purchase of units by a third party in 2010 was at $.35 per unit with the exception of two small transfers to related or affiliated parties at $1.50 per unit. In 2011 there were again limited third-party transactions at prices ranging from $.25 to $.35 per unit. In 2012 only three third-party private sales occurred with one of those transactions taking place because of the termination of the fund that owned the Company’s Class A Units. The reported sales price for two of the transactions was at $.25 per unit with the reported sales price of the third transaction being $.75 per unit.

Since the Class A Units are not publicly traded and there is no secondary market for the units, there is no performance graph.

As of March 15, 2012,1, 2013, there were approximately 3,4263,256 holders of record of our Class A Units which includes holders of Kaiser Inc. stock that have yet to convert their shares to Class A Units as a result of the merger.

As of March 15, 2012,1, 2013, KSC Recovery held 104,267 Class A Units that are outstanding but reserved for distribution to the former general unsecured creditors of KSC pursuant to the KSC Plan. In addition there are 113,250 Class A Units deemed outstanding that are reserved for those investors that have yet to convert their Kaiser Inc. stock to Kaiser LLC Class A Units as a result of the merger.

We currently have no immediate plans to make distributions but anticipate making distributions once we have completed the evaluation of our existing projects and opportunities and have received our share of the proceeds from any successful sale of such projects and opportunities.

During 20102011 and 2011, we2012, the Company purchased 2,0022,176 Class A Units and 2,1761,100 Class A Units respectively.

KAISER VENTURES LLC AND SUBSIDIARIES

Equity Compensation Plan Information

As required by Item 201(d) of Regulation S-K, the following table provides certain information as of December 31, 2011,2012, with respect to our equity compensation plans under which equity securities of the

KAISER VENTURES LLC AND SUBSIDIARIES

Company are authorized for issuance. All previously outstanding unexercised options expired as of December 31, 2008. Thus, we no long have any outstanding options. All options with an exercise price of $1.25 or less per unit or were exercised prior to December 31, 2008, and all other options with an exercise price of greater than $1.25 per unit were forfeited as of December 31, 2008.

We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

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KAISER VENTURES LLC AND SUBSIDIARIES

Forward-Looking Statements and Projections

This “Management’s Discussion and Analysis of Financial Condition and Results of Operation” should be read in conjunction with the consolidated financial statements and the related notes that appear elsewhere within the Report on Form 10-K. Certain statements we make under this Item 7 constitute “forward-looking statements” under the Private Securities Reform Act of 1995. See the discussion under “Forward-Looking Statements” in “Part 1.” preceding “Item 1. - —BUSINESS.” You should also consider our forward-looking statements in light of the risks discussed throughout this Report on Form 10-K.

Section 1: Operating Results

Summary Background and Summary of Significant Financial Statement Impact - Impact—Impairment of MRC Investment

Kaiser, including its wholly-owned subsidiaries unless otherwise provided herein, is the reorganized successor to Kaiser Steel Corporation (“KSC”) which was an integrated steel manufacturer. We have been developing certain assets received out of the KSC bankruptcy. Our remaining assets and projects are described in more detail under “Item 1. BUSINESS and Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - OPERATIONS—Section 3. Business Outlook.”

We have sought to develop and then sell our assets at such times and on such terms as we believe will generate maximum value from those assets. To date, we have been able to distribute $12.00$13.50 cash per share and one Class A Unit per shareor unit under the cash maximization strategy that was adopted in 2000. The final implementation of the cash maximization strategy will occur upon the successful sale or disposition of any iron ore and/or other opportunities at the Eagle Mountain Site and the sale of our interest in the West Valley MRF.Site. Accordingly, it is anticipated that the completion of the sale of our remaining assets as directed by the Liquidation Manager will require additional time. Any sale of assets after the members’ vote to dissolve this Company will be directed by the Liquidation Manager. For additional information regarding the cash maximization strategy, please see “Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - OPERATIONS—Section 3. Business Outlook.” Accordingly, we currently are in the process of evaluating how best to implement the cash maximization strategy going forward.

Although theThe Company had previously recorded impairment adjustments to its investment in MRC as of June 30, 2010 and March 31, 2011; as thea result of the status of the Landfill Project the Company’s impairment analysis of its remaining investment in MRC as of December 31, 2011,2012, did not indicate any further impairment as of that date. This conclusion resulted from an evaluation of the estimated fair market value of MRC’s remaining assets, excluding any value for the Landfill Project, which showed that the estimated fair market value of such assets based upon discussions we have had with potential buyers of the assets was at least equal to or greater than the carrying amount of the investment in MRC on our financial statements. Pursuant to GAAP, this analysis is undertaken without considering any discount for risk or the time value of money. Thus, our analysis did not take into account for example the timing on the receipt of any proceeds from the sale of MRC’s assets or the claims that maybe asserted against MRC in its bankruptcy. The previous impairment adjustments resulted from two events impacting the prospects of the Landfill Project. First, as athe result of the adverse U.S. 9^th Circuit Court of Appeals decision in the land exchange litigation involving the Landfill Project and second, the denial in July 2010 of further review by the 9^th Circuit, we made a determination that the landfill investment was impaired resulting in a determination that a write-down of the carrying amount of the landfill investment was required as of June 30, 2010. The impairment determination and resulting calculation of fair value of the carrying amount of the landfill investment were made utilizing a probability analysis of the remaining options with regard to the landfill project after the denial of the en banc hearing. The total amount of the write-off was $12,504,000

KAISER VENTURES LLC AND SUBSIDIARIES

$12,504,000 which was charged to earnings in the second quarter of 2010. Second, on

KAISER VENTURES LLC AND SUBSIDIARIES

March 28, 2011, the U.S. Supreme Court declined our petition requesting that the Court hear our appeal of the adverse decision of the U.S. 9^th Circuit Court of Appeals regarding the previously completed federal land exchange. As a result of this denial our impairment analysis undertaken at the end of the first quarter of 2011 resulted in an additional write down of as of March 31, 2011 of $6,683,000 which was charged to earnings in the first quarter of 2011. As a result of these impairments, no additional MRC costs have been capitalized since June 30, 2010.

Annual Report on Form 10-K

Kaiser qualifies as a smaller reporting company under SEC rules and under such rules Kaiser is required to include and discuss in this Annual Report on Form 10-K its consolidated balance sheets as of December 31, 2012 and 2011, and its consolidated statements of operations, and cash flows and changes in members’ equity for the years ended December 31, 2011,2012, and 2010.2011. The reader of this Annual Report on Form 10-K is encouraged to read our prior reports filed with the SEC for all of our financial statements filed prior to 2010.2012.

Revenue Sources

Kaiser’s revenues are generally derived from the development of our long-term projects. Income from equity method investments reflects Kaiser’s share of income related to those equity investments (i.e., West Valley MRF)WVMRF, LLC) which we account for under the equity method. As noted elsewhere in this Annual Report on Form 10-K, our 50% indirect ownership interest in WVMRF, LLC was sold as of April 2, 2012, and thus, we no longer have any investments accounted for on the equity method. Revenues are also generated from various miscellaneous sources. Historically, miscellaneous revenue activities have included housing rental income, aggregate and rock sales. During 20102011 and 2011,2012, the Company also generated miscellaneous income at Eagle Mountain from activities such as leasing its fee owned land for media-related activities.

Due to the nature of the Company’s projects and the Company’s recognition of revenues from bankruptcy-related and other non-recurring items, historical period-to-period comparisons of total revenues may not be meaningful for developing an overall understanding of the Company. Therefore, the Company believes it is important to evaluate the trends in the components of its revenues as well as the recent developments regarding its long-term ongoing and interim revenue sources. See “Part 2,II, Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS -OPERATIONS— Summary Background and Summary of Significant Financial Statement Impact - Impact—Impairment of MRC Investment” for a discussion of recent material events affecting the Company’s revenue sources.

Results of Operations

Table summarizing major variances in net lossincome/(loss) between the years ended December 31, 20112012 and 2010:2011:

KAISER VENTURES LLC AND SUBSIDIARIES

For more detailed information on the items constituting the major variances above, please read the discussion and analysis of our results of operations and financial condition below.

KAISER VENTURES LLC AND SUBSIDIARIES

Analysis of Results for the Years Ended December 31, 20112012 and 20102011

Revenues. Total revenues for 20112012 were $2,312,000,$1,305,000, compared to $2,149,000$2,312,000 for 2010.2011. The reasons for this increasedecrease are discussed below.

Revenues from the Company’s equity method investment, WVMRF, LLC, decreased by $1,744,000 to $391,000 for 2012 as compared to 2011. This decrease is the result of the sale of the West Valley MRF increased by $338,000 to $2,135,000 for 2011 as compared to 2010. This increase is primarily a result of higher operating profit at the West Valley MRF, which resulted primarily from higher commodity prices in 2011 as compared to 2010. This positive impact was also enhanced by lower operating and partnership expenses and lower depreciation expenses relating to fully depreciated equipment.on April 2, 2012.

Revenue from Eagle Mountain operations decreasedincreased to $914,000 from $177,000 from $352,000 for 2010.2011. This decreaseincrease is primarily the result of decreasesincreases in the sale of rock and aggregate plus the related sales of water, gas diesel, and salvage & scrap sales.tenant rentals to the rock and aggregate purchase.

Operating Costs. Total Operatingoperating expenses decreased to $2,106,000 from $8,824,000 from $14,191,000 for 2010.2011. This decrease relates primarily to the recording of an additional, albeit lower,fact that there was no asset impairment expense recorded during 2012 compared to the asset impairment expense of $6,683,000 offset by an increaseduring 2011 recorded plus a decrease in non-capitalized MRC expenses related to landfill permitting and development of $646,000.$190,000.

Corporate General and Administrative Expenses. Corporate general and administrative expenses for 20112012 increased 65%98% to $6,161,000 from $3,118,000 from $1,893,000 for 2010.2011. This increase is primarily related to the costs associated with an additional $1.0 million chargeda corporate severance and restructuring charge of $2,618,000 the purpose of which was to compensation expense resulting fromestablish a reserve covering the vestingseverance and other obligations to all remaining current leased employees of amounts in the Supplemental Executive Retirement Plan as of December 31, 2011. Such Supplemental Executive Retirement Plan was previously fully funded in 2007. In addition, the obligations and responsibilities of this Supplemental Executive Retirement Plan was assigned to and assumed by BSI as of such vesting date.Kaiser Ventures LLC.

Net Interest and Investment Income (Loss). Net interest and investment gainincome including Fair Valuefair value adjustments for 20112012 was $90,000$27,000 compared to $337,000$90,000 for 2010.2011. This reduction is primarily the result of a temporary decrease in the “Market Value”market value of the Company’s investments during the year. The fluctuating recovery from the 2008 U.S. credit crisis has caused some of the Company’s commercial paper and other investments to decrease in market value as of December 31, 2011.2012. The Company expects to hold these investments to maturity. Asmaturity; therefore these unrealized losses should be eliminated as of January 1, 2008, the maturity of these investments. The Company has adopted ASC 825,Financial Instruments which permits entities to choose to measure many financial instruments and certain other items at fair value. The Company’s investments are therefore marked to market and unrealized earnings or losses are reflected in income for the period in which they are earned.

Gain on Sale of Investment in West Valley MRF, LLC. The Company recorded a gain of $20,588,000 from the sale of its 50% interest in WVMRF, LLC on April 2, 2012

Pre-Tax LossIncome/(Loss) and Income Tax Provision(Benefit). The Company recorded a pre-tax lossincome of $9,540,000$13,653,000 for 20112012 versus a pre-tax loss of $13,598,000$9,540,000 for 2010.2011. The Company is taxed as a partnership and, thus, the Company’s results of operations (on an income tax basis) are allocated to the unit holders for inclusion in their respective income tax returns. There are, however, income taxes imposed on the Company and there is a gross revenue tax imposed by the State of California. The tax provision was a debit of $10,000 in 2012 versus a credit of $53,000 in 2011 versus a credit of $61,000 in 2010 due to prior year tax refunds received during 2011 related to prior years. The significant decrease in the tax provision in 2011 is primarily the result of tax refunds received by Business Staffing (for periods when it was a subsidiary of Kaiser Ventures) based on amended returns filed for 2006, 2007 and 2008 for which the Company was able to carry back losses realized in 2009.2011.

Net Loss.Income/(Loss) Attributable to Controlling Interest.For 2011,2012, the Company reported net income of $13,715,000 or $1.96 per unit versus a net loss of $8,254,000 or $1.20 per unit versus a net loss of $11,352,000 or $1.70 per unit, reported for 2010.2011. The decrease in net loss per unit in 2011fluctuation is primarily due to a reduction in the amount of asset impairment expense recorded in 2011.2011 and the gain recorded on the sale of the Company’s indirect 50% ownership interest in WVMRF, LLC in 2012.

KAISER VENTURES LLC AND SUBSIDIARIES

Section 2: Liquidity and Capital Resources

Cash, Cash Equivalents and Investments. We define cash equivalents as highly liquid debt investment instruments with original maturities of 90 days or less. Cash and cash equivalents increased $36,000$3,358,000 to $804,000$4,162,000 at December 31, 2011.2012. Included in cash and cash equivalents is $534,000$124,000 held solely for the benefit of MRC at December 31, 2011.2012.

Below is a table showing the major changes in cash during 2011:2012:

Working Capital. During 2011,2012, current assets decreased $2,401,000increased $9,111,000 to $4,400,000,$13,523,000, while current liabilities increased $251,000$516,000 to $2,231,000.$2,747,000. As a result working capital decreasedincreased by $2,652,000$8,595,000 to $2.2$10.8 million at December 31, 20110.2012.

Below is a table showing the major changes in working capital.

Short-Term Investments. During 2011,2012, short-term investments decreasedincreased by $1,418,000.$5,551,000. This is the result of the saleretention and investment of a portion of the proceeds from the sale of the Company’s investmentsinterest in the WVMRF, LLC to provide for future cash for operations.requirements. At December 31, 2011,2012, the Company had $2.7$8.3 million of its excess cash reserves invested in short term investments.

Investments. The Company’s recording of $2,135,000$391,000 relating to its share of income from its investment in the West Valley MRFWVMRF, LLC was offset by the receipt of cash distributions from the West Valley MRFWVMRF, LLC totaling $1,800,000.$750,000. This resulted in a $335,000 increase$359,000 decrease in the Company’s investment in the West Valley MRF.WVMRF, LLC. In addition, on April 2, 2012, the Company sold its 50% interest in WVMRF, LLC for $25.8 million and recorded a gain of $20.6 million. These transactions reduced the Company’s investment in WVMRF, LLC to zero as of April 2, 2012.

There was no change in our investment in the Eagle Mountain Landfill increased $1,300,000 during 2011 due to a private placement completed in September 2011, which increased Kaiser’s ownership interest in MRC from 83.13% to 84.247%. However, in March of 2011 it was determined that this investment was further impaired as a result of the loss of the federal litigation impacting the prospects of the Landfill Project and an additional impairment expense was recorded in the amount of $6,683,000, which reduced the investment by the same amount.2012. As of December 31, 20112012 the balance of this investment is $13,843,000. Currently our ownership interest in MRC is 84.247%.

Other Assets. There was a decrease in other assets of $294,000$310,000 which is the result of the amortization of the environmental insurance policy of $300,000 and depreciation of buildings and equipment of $18,000,$13,000, which were partially offset by an increase in refundable deposits of $24,000.$4,000.

KAISER VENTURES LLC AND SUBSIDIARIES

Environmental Remediation. The Company purchased, effective June 30, 2001, a 12-year $50 million insurance policy, which is expected to cover substantially any and all environmental claims (up to the $50 million policy limit) relating to the historical operations of the Company. This policy terminates on June 30, 2013, bust such policy will continue to be available for claims made on or before June 30, 2013. As of December 31, 2011,2012, based upon current information, we estimate that our future environmental liability related to certain matters and risks not assumed by CCG Ontario, LLC, a subsidiary of Catellus Development Corporation, a New York Stock Exchange company, in its purchase of the Mill Site Property (August 2000) (Catellus Development Corporation merged with and into Palmtree Acquisition Corporation, a subsidiary of ProLogis on September 15, 2005), including a certain groundwater matter as well as potential matters at Eagle Mountain and at other historical locations and other possible third party claims, would be approximately $2.7$2.3 million for which a reserve has been established. In the event a claim for damages is filed against the Company that relates to this reserve, management believes that the claim may be covered by such insurance depending upon the nature and timing of the claim.

Minority Interest. As of December 31, 2011,2012, the Company has recorded $2,057,000$1,985,000 of non-controlling interest relating to the approximately 15.75%15.753% ownership interest in MRC the Company does not own.

Contingent Liabilities. The Company has contingent liabilities more fully described above and in the notes to the financial statements.

MRC Bankruptcy. On October 30, 2011, MRC filed a voluntary petition relief under Chapter 11 of the U.S. Bankruptcy Code. MRC continues to operate as a debtor in possession. MRC’s bankruptcy is not currently expected to have a material direct adverse result on Kaiser except that Kaiser will incur attorneys’ fees and costs as a result of the bankruptcy and Kaiser may elect to become a debtor in possession lender to MRC to provide the funds necessary to complete the bankruptcy process.

Capital Resources. Kaiser expects that its current cash balances and short-term investments together with cash generated from the sale of the West Valley MRF, note receivables and any future asset sales will be sufficient to satisfy the Company’s ongoing projected operating cash requirements.requirements through its proposed liquidation and dissolution.

Member Income Taxes

As a result of the Company’s sale of its 50% interest in the West Valley MRF, LLC in April 2012, the Company received net proceeds of $25,406,000 or $3.63 per unit and recorded a gain of approximately $20,588,000 pr $2.94 per unit. Because the Company had to retain a majority of the net proceeds generated by the sale to fund projected and potential future liabilities and obligations of the Company as required by law, the Company distributed approximately $10,326,000 or $1.50 per unit in cash. Each member of the Company will be allocated a taxable capital gain for 2012 in excess amount received in cash distributions in 2012. However, it is expected that the cash distributed will be in excess of the income taxes due in connection with allocated taxable gain, even before considering the possible application of previously suspended losses for income tax purposes, which may have been accumulated from prior years.Since the Company cannot provide tax advice to its members, each member is strongly encouraged to contact their personal tax accountants in order to determine the specific impact that the above sale may have on their taxable income for 2012

Critical Accounting Policies

The Company’s accounting policies are more fully described in the Notes to the Financial Statements.

The Company believes the following critical accounting policies, which comply with the Accounting Standards Codification (“ASC”), are important to the portrayal of the Company’s financial condition and results.

Investments. The Company accounts for investments under Section 320-10 of the ASC. The Company invests its’ excess cash reserves in high grade commercial paper (Standard & Poor’s rating of “A”“BBB” or above), and U.S. government bonds which it classifies as “available-for-sale” and which are recorded at the purchase price of the security plus or minus the discount or premium paid. Investments are marked to market and unrealized earnings are reflected in income for the period in which they are earned. Due to the current U.S. credit crisis, the fair value of the Company’s commercial paper investments havehas fluctuated significantly. However, the Company expects to hold these investments to maturity, thereby mitigating any unknown fluctuations in fair value.

Investment in West Valley MRF, LLC. The Company accounts for its investment in West Valley MRF, LLC, the owner of West Valley MRF, underutilizes the equity method of accounting becausefor its investment in WVMRF, LLC. Under this method, the Company’s share of the net income of WVMRF, LLC is reflected as income increases the record amount of the Company’s 50% non-controlling ownership interest. Our 50% non-controlling interest is held through our wholly-owned subsidiary, Kaiser Recycling, LLC.investments. Distributions received from WVMRF, LLC are reflected as a reduction to the Company’s investments. The Company’s investment in WVMRF, LLC was sold on April 2, 2012.

KAISER VENTURES LLC AND SUBSIDIARIES

Landfill Permitting and Development. Through its 84.247% interestMRC, in MRC,which the Company owns 84.247%, has been developing, for sale to a municipal entity or operating company, its property known as the Eagle Mountain Site in the California desert for use as a rail-haul municipal solid waste landfill. Pursuant to Section 970-10 of the ASC, capitalizable landfill site development costs were capitalized at cost and will be expensed when management determines that the capitalized costs provide no future benefit. However,

KAISER VENTURES LLC AND SUBSIDIARIES

as discussed in more detail above, and effective as of June 30, 2010, and March 31, 2011 there were determinationswas a determination of impairment of the investment in MRC which resulted in write-downsan initial write-down of the carrying amount of such investment in our financial statements.statements as of June 30, 2010. With the determination that an impairment existsexisted as of June 30, 2010, no further MRC costs have been or will be capitalized.

Environmental Insurance and Environmental Remediation Liabilities. The Company’s $3.8 million premium for the prospective insurance policy, which was reduced by a refund from the insurance carrier, is capitalized as a long-term asset and is being amortized on a straight-line basis over the twelve (12) year term of the policy. To the extent a pre-existing liability has not been recorded, claims made for environmental matters are recorded as litigation accruals in the Company’s consolidated financial statements pursuant to Section 450-10 of the ASC when it becomes probable that a loss has been incurred and the amount of such loss can be reasonably estimated. Claims accepted by the insurance company pursuant to coverage under the policy are recorded as insurance receivables when coverage is accepted and the amount to be paid by the insurance company can be reasonably estimated.

Revenue Recognition. Revenues are recognized when the Company has completed the earnings process and an exchange transaction has taken place.

Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Conditional Asset Retirement Obligations. The Company accounts for certain asset retirement obligations at Eagle Mountain pursuant to Section 740-20 of the ASC. Based upon currently available information, the Company estimated during 2005 that the conditional asset retirement obligations related to possible future abatement for asbestos-containing products in certain of the viable structures at Eagle Mountain would approximate $1.2 million. Pursuant to the ASC 410 requirements, the Company increased its environmental reserve as of December 31, 2005 by $1.2 million to account for these conditional obligations and increased the carrying amount of the associated structures at Eagle Mountain by a comparable amount. This increased cost basis was depreciated over the estimated time that such assets were expected to be owned by the Company, approximately 4 years. Therefore, as of December 31, 2009, these assets have beenwere fully depreciated.

Long-Lived Assets. In accordance with Section 410-20 of the ASC, long-lived assets are evaluated for potential impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

Uncertain Tax Benefits. The Company adopted Financial Standards Board (FASB) Accounting Standards Codification ASC 740,Income Taxes, formerly Interpretation No. 48 Accounting for Uncertainty in Income Taxes (“FIN 48”), which is an interpretation of Initial Measurement topic of FASB ASC 740-10-30 effective January 1, 2007. Adoption of FIN 48 had no impact on the Company’s financial statements.

Fair Value Measurements. Effective January 1, 2008, theThe Company adoptedaccounts for fair value measurements in accordance with ASC 820, Fair Value Measurements and Disclosure of Financial Standards Board (FASB) Accounting Standards Codification ASC 820-10-05Disclosures, which provides guidance for usingdefines fair value, establishes a framework for measuring fair value in GAAP and requires certain disclosures about fair value measurements. In general, fair values determined by Level 1 use quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs use data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are “unobservable data points” for the asset or liability and include situations where there is little, if any, market activity for the asset or liability.

The Company has elected to use the Fair Value Option in accordance with ASC 825-10, which permits the Company to choose to measure assetsfinancial instruments, such as its short-term and liabilitieslong-term investments, and information about the extent to which company’s measure assets and liabilitiescertain other items at fair value. FASB ASC 820-10-05 also expands financial statement disclosure requirements about a company’s use of fair value measurements, including the effect of such measures on earnings. The adoption of FASB ASC 820-10-05 did not have a material impact on the Company’s consolidated financial statements.

KAISER VENTURES LLC AND SUBSIDIARIES

As noted above, effective January 1, 2008, the Company adopted Fair Value Option Topic of Financial Standards Board (FASB) Accounting Standards Codification ASC 825-10-05 which permits entities to choose to measure many financial instruments and certain other items at fair value. This Statement expanded the use of fair value measurement, which is consistent with the Board’s long-term measurement objectives for accounting for financial instruments. The adoption of SFAS 159 did not have a material impact on the Company’s consolidated financial statements.

New Accounting Pronouncements

In January 2010, the FASB issued an amendment to require new disclosures for fair value measurements and provide clarification for existing disclosure requirements. More specifically, this update requires (a) an entity to disclose separately the amounts of significant transfers in and out of Levels 1 and 2 fair value measurements and to describe the reasons for the transfers; and (b) information about purchases, sales, issuances and settlements to be presented separately (i.e. present the activity on a gross basis rather than net) in the reconciliation for fair value measurements using significant unobservable inputs (Level 3 inputs). This update clarifies existing disclosure requirements for the level of disaggregation used for classes of assets and liabilities measured at fair value and requires disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements using Level 2 and Level 3 inputs. The Company adopted this standard at the beginning of its 2010 fiscal year and it did not have a material impact on the Consolidated Financial Statement note disclosures.

Section 3: Business Outlook

The statements contained in this Business Outlook, as well as in “Part I, Item 1. BUSINESS”, are based upon current operations and expectations. In addition to the forward-looking statements and information contained elsewhere in this Annual Report on Form 10-K, these statements are forward-looking and, therefore, actual results may differ materially. See the Company’s disclosure regarding forward-looking statements in the section entitled “Forward-Looking Statements” above.

Ongoing Operations. As noted above, our revenues from ongoing operations have, in the past, generally been derived from the performance of our major long-term development projects and investments. We have previously sold most of our projects and investments. Our principal remaining assets and projects, other than cash and securities, are: (i) our 84.247% ownership interest in the MRC; (ii) our 50% equity ownership of the West Valley MRF; (iii) hundreds of millions of tons of rock and mineral resources (primarily iron ore) at the Eagle Mountain Site; and (iv)(iii) miscellaneous assets such as our land at Lake Tamarisk. Additionally, we continue to analyze the issues raised by the proposed hydro-electric pumped storage project at the Eagle Mountain Site including the possibility of ECEC attempting to take our property by eminent domain. We have no material ongoing operations except in connection with such assets and projects. Our principal sources of ongoing income are derived from the West Valley MRF, our investments and from miscellaneous income generated at the Eagle Mountain Site. We will continue to evaluate our remaining assets, projects, activities and investments in light of how to best provide maximum value to our members. In regard

Proposed Dissolution of the Company. On January 15, 2013, the Company’s Board of Managers approved the dissolution and liquidation of the Company pursuant to the West Valley MRF,Plan of Dissolution and approved the most significant factors affecting our future equity income will continueNew Operating Agreement for the Company, both of which remain subject to depend upon: (i)approval by the abilityCompany’s Class A members. The Board of Managers has concluded that it is in the best interests of the West Valley MRFCompany and its members to retain customersdissolve and waste volumes at attractive processing rates; (ii) recyclable commodity prices; (iii)liquidate as the ability to increase prices to reflect any increasesfinal step in such items as transportation, labor and disposal costs; and (iv) future competition from competing facilities. Due toimplementing the adverse economic conditions and other factors, commodity prices, starting in the third quarter of 2008, declined dramatically. Beginning during the second quarter of 2009 and continuing through 2011 we have seen a strong improvement in commodity prices but such prices are still below the prices at which such commodities were being sold at their peak in 2008. Additionally, the West Valley MRF is continuing the process of permitting and then constructing a composting project that might be capable of utilizing a portion of the municipal solid waste received at the facility. Finally, as part of our cash maximizationCompany’s

KAISER VENTURES LLC AND SUBSIDIARIES

strategy,previously approved cash maximization strategy. The Company plans on selling its remaining assets, discharging or making adequate provision for its known and contingent liabilities and distributing the net liquidation proceeds, if any, in one or more future distributions to members. However, there could be no further distributions to members if our remaining assets are sold for substantially less than we currently anticipate and/or if liquidation expenses and actual and contingent liabilities are higher that we current understand and estimate. Accordingly, we are evaluatingnot able to predict with certainty the precise nature, amount or timing of any potential salefuture distributions, primarily due to our inability to predict (i) the amount of our interest in West Valleyremaining liabilities, (ii) the duration of the liquidation process and the amount that we will expend during the course of the liquidation, or other alternatives in light(iii) the net value, if any, of our primary objectiveremaining non-cash assets. A firm timetable for any interim or final distributions to the Company’s members has not been established. If the Plan of maximizing value. West Valley currently generates more than sufficient cash flow to fund its cost of operations and does not require additional investment by us.

Furthermore, even though cash distributions from West Valley MRF continue to be impactedDissolution is approved by the adverse economic recessionCompany’s members, the members of the Board of Managers will resign and the slow economic recovery, West Valley should continueLiquidation Manager will assume sole management of the Company and will be responsible for all decisions thereafter. The target date to generate cash distributionscomplete dissolution is June 30, 2014, but that date could be extended to cover a material portion of Kaiser LLC’s foreseeable general and administrative costs.December 31, 2014, or beyond by the Liquidation Manager.

Mine Reclamation, LLC. We own an 84.247% ownership interest in Mine Reclamation, LLC, (referred to as MRC), which has been seeking to develop a rail-haul municipal solid waste landfill at a property called the Eagle Mountain Site located in the California desert (the “Landfill Project”). On October 30, 2011, MRC filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for Central District of California, Riverside Division, bankruptcy case number 6:11-bk-43596 (the “Bankruptcy Court”). MRC continues to operate its business as a “debtor in possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code, Rules and orders of the Bankruptcy Court. The Landfill Project has been the subject of intense litigation in federal court over the course of more than ten years regarding the validity of a land exchange with the U.S. Bureau of Land Management (“BLM”). The land exchange is central to the development of the Landfill Project as permitted. On March 28, 2011, the U.S. Supreme Court denied the request of MRC for further review of the prior decision of the U.S. 9^th Circuit Court of Appeals that had been adverse to the position of MRC and the BLM. Thus, the previous federal land exchange litigation is now final and concluded as there is no further right of appeal. Although the matter has been remanded to the BLM for further proceedings in accordance with the decision of the U.S. 9^th Circuit Court of Appeals, there is no pending litigation and no current plan or process being undertaken by MRC to “fix” the land exchange since MRC does not have the funds or wherewithal to pursue such an objective. Additionally, Kaiser has decided that it will not make further investments in MRC to fund a “fix” of the land exchange. For additional information on the federal land exchange litigation see below in “Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS1. BUSINESS - EAGLE MOUNTAIN LANDFILL PROJECT AND MRCMine Reclamation and Eagle Mountain Landfill Project - Prior Federal LandfillHistorical Project Litigation.” Further, MRC and the County Sanitation District No. 2 of Los Angeles County (the “District”) had entered into an Agreement for Purchase and Sale of Real Property and Related Personal Property in Regard to the Eagle Mountain Sanitary Landfill Project and Joint Escrow Instructions on August 9, 2000 (the “Landfill Project Sale Agreement”). The closing date under the Landfill Project Sale Agreement had been extended numerous times since December 31, 2000, pursuant to written extension agreements between MRC and the District. Under each of those extension agreements, the District had the right to either purchase the Landfill Project in its “as is” condition or to terminate its Landfill Project Sale Agreement with MRC. The last extension of the closing date under the Landfill Project Sale Agreement was set to expire on October 31, 2011. The then Chief Engineer and General Manager of the District had indicated that the District was not intending to proceed with the purchase of the Landfill Project. He later communicated that the District would be purchasing the Landfill Project on October 31, 2011. The District subsequently repudiated in writing the terms of the last extension agreement, and threatened to sue MRC to, among other things, compel MRC, at MRC’s sole expense and risk, to further proceed with the permitting of the landfill which would involve substantial additional financial resources and time, neither of which MRC has. Thus, MRC filed for bankruptcy protection on October 30, 2011, in federal bankruptcy court in Riverside County, California in order to preserve and protect its assets and options with respect to such assets.

KAISER VENTURES LLC AND SUBSIDIARIES

Mill Site Property. The only remaining Mill Site Property indirectly owned by the Company is an approximate five acre parcel referred to as the Tar Pits Parcel.Parcel that is owned by Kaiser Recycling, LLC, a wholly-owned subsidiary of the Company. A substantial portion of the Tar Pits Parcel was leased to WVMRF, LLC for a period of 50 years beginning in the second quarter of 2012. CCG substantially completed the environmental remediation of this parcel pursuant to the terms of its agreement during 2002. The West Valley MRF has the right to purchase the Tar Pits Parcel for $1.00.

KAISER VENTURES LLC AND SUBSIDIARIES

Cash Maximization Strategy and Our Current Projects and Activities. In September 2000, Kaiser Inc.’s Board of Directors approved a strategy to maximize the cash distributed to Kaiser Inc.’s stockholders. In implementing the cash maximization strategy, during 2000 and 2001, we undertook a series of asset sale transactions and other activities which allowed us to distribute a total of $12.00 per share in cash to Kaiser Inc.’s stockholders. The final implementation of the cash maximization strategy will occur upon of the successful sale or disposition of our land and possible mineral resource opportunities at the Eagle Mountain Site as well as the resolution of MRC’s bankruptcy and the sale of our interest in the West Valley MRF. Accordingly, we currently are in the process of evaluating how best to implement the cash maximization strategy going forward. A final decision will not be made until we know the outcome of an evaluation of the iron ore and other possible opportunities that may be available at the Eagle Mountain Site is completed, until there is a resolution of the MRC bankruptcy and until we complete the sale of our remaining interest in the West Valley MRF.

The Company currently expects a liquidating event for its members once the cash maximization strategy is completed but it is currently anticipated that such strategy will not be completed until the Company’s projects and assets are sold and MRC’s bankruptcy resolved which may be a significant amount of additional time.

Corporate Overhead. Given our current assets and projects, it is unlikely that we will be able to further reduce personnel and corporate overhead in the near future. However, if the Dissolution Plan is adopted by the Company’s members and as we divest our remaining assets, we intend to further reduce corporate staffing and overhead to reflect the reduced requirements of our remaining operations and projects. The costs of such reductions shall be recorded at the time the decision to make such reductions is made by the Company.

Capital Resources. Kaiser expects that its current cash balances and short-term investments together with cash generated from the West Valley MRF, note receivables and any future asset sales will be sufficient to satisfy the Company’s ongoing projected operating cash requirements.

We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

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KAISER VENTURES LLC AND SUBSIDIARIES

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KAISER VENTURES LLC AND SUBSIDIARIES

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Members and Board of Managers of Kaiser Ventures LLC

We have audited the accompanying consolidated balance sheets of Kaiser Ventures LLC as of December 31, 20112012 and 20102011, and the related consolidated statements of operations, members’ equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Kaiser Ventures LLC as of December 31, 20112012 and 2010,2011, and the consolidated results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ Moss Adams LLP

KAISER VENTURES LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

as of December 31

The accompanying notes are an integral part of the consolidated financial statements.

KAISER VENTURES LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

as of December 31

The accompanying notes are an integral part of the consolidated financial statements.

KAISER VENTURES LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

for the Years Ended December 31

The accompanying notes are an integral part of the consolidated financial statements.

KAISER VENTURES LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

for the Years Ended December 31