SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

For the transition period from            to            

Commission File Number 000-33433

KAISER VENTURES LLC

(Exact name of small business issuer as specified in its charter)

3633 East Inland Empire Blvd., Suite 480

Ontario, California 91764

(Address of principal executive offices and zip code)

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

No Change

(Former name, former address and former fiscal year, if change since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 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 Regulations S-T (§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  ¨

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

At May 5,August 1, 2011, the registrant had 6,784,0236,872,712 Class A Units outstanding including: (i) 104,267 Class A Units outstanding but reserved for distribution to the general unsecured creditors in the Kaiser Steel Corporation bankruptcy; (ii) 113,101 Class A Units 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; and (iii) 84,612 units outstanding that are subject to certain vesting requirements.

KAISER VENTURES LLC AND SUBSIDIARIES

TABLE OF CONTENTSOFCONTENTS TO FORM 10-Q

AVAILABILITY OF PREVIOUS REPORTS

The Company will furnish without charge, to each member, upon written request of any such person, a copy of the Company’s 2010 Annual Report on Form 10-K.10-K and the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011. Those requesting a copy of the reportsuch reports that are not currently members of the Company may also obtain a copy of the reportreports directly from the Company upon payment of a nominal photocopying charge. Requests for a copy of any report filed with the Securities and Exchange Commission should be directed to Executive Vice President-Administration, at 3633 East Inland Empire Boulevard, Suite 480, Ontario, California 91764. All such reports can also be accessed from the Company’s website atwww.kaiserventures.com.

The reader is encouraged to read this Report on Form 10-Q in conjunction with the Company’s 2010 Annual Report on Form 10-K and the Company’s first quarter 2011 Report on Form 10-Q as the information contained herein is often an update of the information in such reports.

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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 Report on Form 10-Q 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, Annual Report, 10-Q Report, 10-QSB Report, 8-K Report or press release of the Company and any amendments 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-Q 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 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: Kaiser’s inability to complete the anticipated sale of its Eagle Mountain landfill project; litigation, including, among others, claims that relate to Eagle Mountain, including the adverse decision of the U.S. 9^th Circuit Court of Appeals in November 2009 impacting the viability of the Eagle Mountain landfill project, pre-bankruptcy activities of Kaiser Steel Corporation, the predecessor of Kaiser, and asbestos claims; insurance coverage disputes; the impact of federal, state, and local laws and regulations on our permitting and development activities; competition; the challenge, reduction or loss of any claimed tax benefit, including Kaiser’s conclusion that its tender offer completed in December 2008 will not result in the Company being treated as a “publicly traded partnership”; the amount and nature of the mineral resources at Eagle Mountain and the inability to exploit such possible mineral and resource opportunities; the impact of natural disasters on our assets; 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.

ADDITIONAL INFORMATION

A reader of this Report on Form 10-Q is strongly encouraged to read the entire report, together with the Company’s 2010 Annual Report on Form 10-K and the Company’s Report on Form 10-Q for the period ended March 31, 2011, for background information and a complete understanding as to material developments concerning the Company. Such report can be found on Kaiser’s website atwww.kaiserventures.com under the “Member Relations” tab.

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 to Kaiser Steel Corporation, referred to as KSC, which was an integrated steel manufacturer that filed for bankruptcy protection in 1987.

The Financial Statements are located at the end of Item 3, beginning on Page 1314 of this Report and are incorporated herein by this reference.

KAISER VENTURES LLC AND SUBSIDIARIES

BUSINESS UPDATE

Overview

Our business is developing the remaining assets we received from the KSC bankruptcy. The possible opportunities with regard to such assets are summarized below:

KAISER VENTURES LLC AND SUBSIDIARIES

KAISER VENTURES LLC AND SUBSIDIARIES

Cash Maximization Strategy Status

In September 2000, Kaiser Inc.’s Board of Directors approved a strategy to maximize the cash ultimately to be distributed to our owners taking into account all circumstances and applicable legal requirements. This strategy was continued with the conversion of Kaiser Inc. to a limited liability company at the end of 2001. Consistent with this strategy, Kaiser Inc. historically completed or entered into a number of transactions which resulted in Kaiser Inc. distributing a total of $12 per unit in cash to its shareholdersshareholders. The adverse federal land exchange litigation that impacts the landfill project alters and impacts the timing of the continuing implementation of the cash maximization strategy, including materially adversely impacting any amount that may be received in the future by our unitholders. Thus, the final implementation of the cash maximization strategy will occur upon the positive resolution of the current adverse federal litigation involving the landfill project by a fix through the BLM and the sale of such project and upon the completion of the exploration and pursuit of possible mineral resource opportunities at the Eagle Mountain Site. Accordingly, final implementation of the cash maximization strategy could take an additional significant period of time.

Eagle Mountain Landfill Project

Background. In 1988, the Company entered into a 100-year lease agreement (the “MRC Lease”) with MRC. MRC is seeking to develop the Company’s former iron ore mine near Eagle Mountain, California into a large, regional rail-haul, municipal solid waste landfill. The Company currently owns approximately 83.13% of the Class B units and 100% of the Class A units of MRC. In December 1999, the Landfill Project received its last major permit necessary to construct and operate a rail-haul landfill. The Landfill Project is permitted to receive 10,000 tons per day of municipal solid waste for the first ten years of operation and up to a maximum of 20,000 tons per day thereafter. The landfill is currently permitted to receive municipal solid waste up to November 30, 2088.

Sale of Landfill Project. In August 2000, MRC entered into that certain 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 (“Landfill Project Sale Agreement”) with the District. In summary, the Landfill Project (which includes our royalty payments under the MRC Lease) is being sold for $41 million, plus an estimated approximate $8.8$8.9 million in accrued interest from May 2001 to the date of this Report on Form 10-Q. The closing of this transaction is currently scheduled to occur by JuneSeptember 30, 2011. However, the initial closing date has been extended a number of times. The sale of the Landfill Project is subject to the results of the District’s due diligence, satisfaction of numerous contingencies and the negotiation of various ancillary agreements. The contingencies include, but are not limited to, obtaining the transfer of the Landfill Project’s permits to the District and obtaining all necessary consents to the transaction as well as resolving the outstanding federal land exchange litigation which is discussed in more detail below. The adverse federal litigation jeopardizes the viability of the current landfill project. However, we are currently in the process of determining the best means of addressing the deficiencies identified by the U.S. 9^th Circuit Court of Appeals through the BLM. Accordingly, the receipt of the purchase price, in whole or in part, if at all, will continue to be delayed pending satisfactory resolution of these contingencies including resolution of the issues identified by the U.S. 9^th Circuit Court of Appeals. At this time, we cannot estimate when or if ever the sale may be completed.

KAISER VENTURES LLC AND SUBSIDIARIES

As of the date of the filing of this Report, the parties agreed to extend the closing date to no later than JuneSeptember 30, 2011. The contractual expiration date has been extended a number of times previously. The

KAISER VENTURES LLC AND SUBSIDIARIES

conditions to closing are not expected to be met by the current expiration date particularly with the need to resolve the issues identified by the U.S. 9^th Circuit Court of Appeals, and the parties will each need to decide whether to extend the closing period one or more additional times or waive certain conditions. There is no assurance or requirement that either of the parties will continue to extend the closing date and, if it is extended, for how long.

The foregoing summary of the Landfill Purchase Agreement is qualified in its entirety by the Landfill Purchase Agreement filed as an exhibit to Kaiser Inc.’s second quarter 2000 Report on Form 10-Q and the more extensive discussion contained in our 2010 Annual Report on Form 10-K.

Current Landfill Project Litigation. On September 20, 2005, the U.S. District Court for the Central District of California, Eastern Division, issued its opinion in Donna Charpied,et al., Plaintiffs v.United States Department of Interior, et al., Defendants (Case No. ED CV 99-0454 RT (Mex)) and inNational Parks and Conservation Association, Plaintiff v.Bureau of Land Management, et al., Defendants (ED CV 00-0041 RT (Mex)). The decision is adverse to the Landfill Project in that it set aside a land exchange completed between the Company and BLM in October 1999 and two BLM rights-of-way.

The Company and the U.S. Department of Interior each appealed the decision 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 to the Landfill Project in that it upheld portions of the prior U. S. District Court decision setting aside the completed land exchange. The dissenting judge found in the Company’s favor on all issues involving the land exchange and Landfill Project. 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 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. 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.”

The adverse federal litigation jeopardizes the viability of the current Landfill Project. In addition, such decision may adversely impact the agreement to sell the Landfill Project to the District, including termination of the agreement. At this time, no changes to our agreement with the District have occurred. We continue to evaluate our remaining option of pursuing a fix through the BLM.

Eagle Crest Energy Company. Eagle Crest Energy Company, referred to as ECEC, a previous opponent to the landfill project, is seeking a license from the Federal Energy Regulatory Commission, referred to as FERC, for a proposed 1,300 mega-watt hydroelectric pumped storage project and ancillary facilities to be located at the Company’s Eagle Mountain mine site. This project is essentially the same project that ECEC previously proposed and was dismissed by the FERC in July 1999. The proposed ECEC project would utilize two of the mining pits and other property at the Eagle Mountain Site, portions of which are currently leased to MRC and are the subject of the pending sale to the District. The Company has not agreed to sell or lease this property to ECEC. In addition, the ECEC project is not compatible with the Landfill Project regardless of claims to the opposite by ECEC. ECEC is continuing to take certain steps necessary to obtain a license which we continue to oppose. It is anticipated that there will be several legal actions involving Kaiser against ECEC in the future including litigation over whether ECEC can take our land by eminent domain and if so, the amount of damages payable to us and others as a result of ECEC’s actions for its private benefit.

MRC Financing. Since Kaiser became an owner of MRC in 1995, MRC has been financed through a series of private placements to its existing equity owners. As a result of our investments in MRC our

KAISER VENTURES LLC AND SUBSIDIARIES

ownership interest in MRC is currently 83.13%. Additional funding will be required to finance ongoing operations and any fix strategy that may be undertaken as a result of the U.S. 9^th Circuit Court of Appeals decision. ItMRC is anticipated thatcurrently undertaking a private placement ofto its existing members for approximately $1.3 million which offering will be undertakencompleted by MRC in the secondend of the third quarter of 2011. We will purchase at least our current pro rata ownership interest in such private placement which will result in a minimum additional investment by the Company of $1,080,690.

KAISER VENTURES LLC AND SUBSIDIARIES

Write-down of Investment in Eagle Mountain Landfill Project. Even though we are evaluating pursuing a fix through the BLM of the deficiencies found to exist by U.S. 9^th Circuit Court of Appeals,In accordance with the denialrequirements of our appeal to the U.S. Supreme Court, our quarterly analysis pursuant to generally accepted accounting principles (“GAAP”), we wrote down the carrying cost of whether the investment in Eagle Mountainthe Landfill Project was impaired, resulted in a determination of impairmenton our financial statements effective June 30, 2010, and a write-down of the carrying amount of the MRC investment in the Eagle Mountain Landfill Projectagain effective as of March 31, 2011. For additional information, see “Part I.—Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS—OPERATING RESULTS—Write-Down of Investment in Eagle Mountain Landfill.”

Risks. As is discussed in this Report on Form 10-Q and discussed in more detail in the Company’s Annual Report on Form 10-K for 2010, there are numerous risks associated with MRC and the Landfill Project, including the numerous risks and contingencies associated with the pending sale of the Landfill Project to the District. The adverse federal litigation involving the completed land exchange substantially increases the likelihood of the occurrence of certain of these risks. If the current adverse land exchange litigation is not favorably resolved through a fix through the BLM, the Landfill Project will not be viable as currently permitted. If the land exchange litigation is not ultimately favorably resolved and/or the Company cannot otherwise cure various alleged title and other closing issues in a timely fashion, then the District’s purchase of the Landfill Project would not be completed and the Company might have to abandon the Eagle Mountain Landfill Project and its investment in MRC. The adverse federal litigation materially increases the possibility of such a scenario. The Company may seek to pursue other possible opportunities at the Eagle Mountain site or it may modify the existing proposed Landfill Project. Additionally, even if there ultimately is a satisfactory resolution of the land exchange litigation, there can be no assurance that all other outstanding matters currently preventing a closing with the District will be resolved to the satisfaction of the parties.

If we are unable to manage or resolve any of these risks or uncertainties, the value of our Class A Units could be further materially reduced. Additionally, as events and changes in circumstances occur, there could be further write-downs in the carrying amount of MRC’s investment in the Eagle Mountain Landfill Project in our financial statements, including, under certain circumstances, a write-down of the investment to zero.

In addition, there are risks that the Landfill Project will be impacted by natural disasters like the floods that caused significant damage to a limited portion of the rail line in 2003. Certain risks may be uninsurable or are not insurable on terms which we believe are economical.

West Valley Materials Recovery and Transfer Station

West Valley MRF, LLC was formed in June 1997 by Kaiser Recycling Corporation (now Kaiser Recycling, LLC (formerly Kaiser Recycling, Inc.)), a wholly-owned subsidiary of Kaiser, and West Valley Recycling & Transfer, Inc., a wholly-owned subsidiary of Burrtec Waste Industries, Inc. (“Burrtec”). This entity was formed to construct and operate the materials recovery facility and is referred to as the West Valley MRF. This facility is permitted to receive up to 7,500 tons per day of municipal solid waste. Currently, the facility is processing approximately 3,000 – 3,500 + tons per day of municipal solid waste and recyclable materials.

Construction of the West Valley MRF was financed primarily by bonds issued by the California Pollution Control Finance Authority. The bonds have a variable interest rate that is adjusted weekly. The rates during the first quartersix months of 2011 have ranged from a low of 0.30%0.18% to a high of 0.40%0.39%; however, the average rate for the first quartersix months of 2011 has been 0.35%0.32%. These rates do not include the credit

KAISER VENTURES LLC AND SUBSIDIARIES

enhancement fee of approximately 1.25%, which is paid to the bank providing the credit enhancement. West Valley MRF is continuing to work on the extension ofThe bank that provides the letters of credit that are currently scheduled to expire in the second quarter of 2011 that support the Pollution Control Finance Authority bonds. The bank issuingbonds extended the letters of credit has indicated that it will be extendingfor the letters1997 Phase 1 bonds through June 30, 2012, which is their stated date of credit.

KAISER VENTURES LLC AND SUBSIDIARIES

However, ifmaturity and for the letters of credit should not be extended for any reason, payment of the2000 Phase 2 bonds could be accelerated.through June 2016.

The performance of the West Valley MRF, which washas been negatively impacted by the recent world-wide economic recession, continues to improve primarily as a result of increasing commodity prices. A cash distribution of $500,000 was received from the West Valley MRF during the first quarter of 2011. No distributions were made during the second quarter but a $750,000 distribution was received from West Valley MRF in July 2011.

Risks. There are a number of risks associated with the West Valley MRF which are discussed in more detail in the Company’s Annual Report on Form 10-K for 2010. Waste volumes continue to be negatively impacted by the down-turn in the California economy. While commodity prices have continued to slowly improve, during the first quarter of 2011, the volatility of commodity prices and any material reduction in such prices, will negatively impact the revenues, margins and net income of the West Valley MRF. Governmental regulation and competition for and loss of expiring waste contracts would also negatively impact the West Valley MRF.

Eagle Mountain, California

We continue to explore various opportunities and other opportunities for the use of the land, facilities and other resources at Eagle Mountain. As discussed extensively in our Report on Form 10-K for the year ended December 31, 2010, we are actively pursuing possible transactions involving the substantial measured and indicated iron ore reserves at Eagle Mountain. Possible prospects are continuing toIron ore mining is physically compatible with the Landfill Project with the cooperation of the parties that may be generated and ourinvolved. As of the date of the filing of this Report on Form 10-Q, we have received several confidential proposals. Our investment banker will assistis assisting us in evaluating all prospects and proposals with the objective of consummating the best attractive proposal. However, there is no assurance that we may receive.the Company will be able to negotiate and enter into an acceptable agreement with any prospect and, even if an agreement is entered into, that there will be a successful transaction.

Lake Tamarisk

The Company continues to consider the possible sale of its property at Lake Tamarisk.

OPERATING RESULTS

Write-down of Investment in the Eagle Mountain Landfill

While disclosed and discussed in our 2010 Annual Report on Form 10-K, we again call your attention to the fact that Kaiser wrote down the carrying value of MRC’s investment in the Eagle Mountain Landfill Project as reflected in our financial statements as of June 30, 2010.2010 and March 31, 2011. This determination of impairment resulted in a write-downwrite-downs of the carrying amount of the investment in the Eagle Mountain Landfill Project effective as of June 30, 2010 to $20,526,000. The total amount of the 2010 write-down recorded was $12,504,000. On March 28, 2011, the U.S. Supreme Court denied our request to further review the prior adverse decision of the U.S. 9^th Circuit Court of Appeals. Thus, we are currently in the process of determining the best means of addressing the deficiencies identified by the U.S. 9^th Circuit Court of Appeals through the U.S. Bureau of Land Management BLM. Even though we are evaluating pursuing a fix through the BLM of the deficiencies found to exist by U.S. 9^th Circuit Court of Appeals, with the denial of our appeal to the U.S. Supreme Court, our quarterly analysis pursuant to GAAP of whether the investment in the Eagle Mountain Landfill Project was impaired resulted in a determination of impairment and an additional write-down of the carrying amount of the MRC investment in the Eagle Mountain Landfill Project as of March 31, 2011. As permitted by GAAP, the impairment

KAISER VENTURES LLC AND SUBSIDIARIES

determination and resulting calculation of fair value of the carrying amount of the MRC investment in the Eagle Mountain Landfill Project were made utilizing a probability analysis of the remaining options with regard to the Landfill Project after the denial of our appeal to the U.S. Supreme Court. The total amount of the additional write-down as of March 31, 2011 was $6,683,000 which was charged to earnings in the first quarter of 2011.$6,683,000. In addition, as required by the Accounting Standards Codification (“ASC”), all subsequent Eagle Mountain Landfill expenses will be expensed as incurred. It is possible that additional material write downs of the MRC investment in the Eagle Mountain Landfill could occur including, under certain circumstances, a write-down of the investment to zero.

KAISER VENTURES LLC AND SUBSIDIARIES

Summary of Revenue Sources

Due to the nature of the Company’s projects and the Company’s recognition of revenues from 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.

Results of Operations

Analysis of Results for the Quarters Ended March 31,June 30, 2011 and 2010

Revenues. Total revenues for the firstsecond quarter of 2011 were $555,000$614,000 as compared to $488,000$454,000 for 2010. The reasons for this increase are discussed below.

Revenue from the Company’s equity method investment in the West Valley MRF increased by $181,000$118,000 to $539,000$562,000 for the firstsecond quarter of 2011 as compared to $358,000$444,000 for the same period in 2010. This increase, which is the result of increased operating profit from the West Valley MRF, is due primarily to higher recyclable sales resulting from the significantcontinuing increase in recyclable commodity prices (fiber and aluminum) which had been negatively impacted by the world-wide economic recession during early 2009.. However, West Valley continues to receive lower waste volumes due to the lingering impacts of the U.S. economic recession. The impact of higher commodity prices was partially offset by higher recyclable rebates and buyback expenses in 2010.2011.

Revenue from Eagle Mountain operations decreasedincreased for the firstsecond quarter of 2011 by $114,000$42,000 to $16,000$52,000 as compared to $130,000$10,000 for 2010, primarily due to non-recurring salvage and scrap sales in 2010.increased revenue from entities renting the site for various media purposes.

Operating Costs. Operating costs increaseddecreased to $7,068,000$444,000 for the firstsecond quarter of 2011 from $292,000$12,826,000 for the same period in 2010. This increasedecrease relates primarily to: (a)to the recording of $6,683,000$12,504,000 in asset impairment expense relating to our Eagle Mountain Landfill Project;Project during the same period in 2010 and (b) $120,000the related increase in non-capitalized MRC expenses related to landfill permitting and development.expenses.

Corporate General and Administrative Expenses.Corporate general and administrative expenses increased to $526,000$477,000 for the firstsecond quarter of 2011 from $463,000$414,000 for the same period in 2010. This increase is primarily related to costshigher 2011 expenses which were incurred for outside capital advisors engaged for the possible sale of certain Company assets.legal expenses and auditing and tax services.

Net Interest and Investment Income. Net interest and investment income, including realized and unrealized gains of $51,000,$6,000, for the firstsecond quarter of 2011 was a gain of $88,000$46,000 compared to a gainloss of $80,000$10,000 for the same period in 2010. Of the $88,000$46,000 gain for the firstsecond quarter of 2011, $37,000$40,000 was interest income, $6,000$3,000 was net realized and unrealized gains on the Company’s short-term investments and $45,000$3,000 was the unrealized gain on the Company’s SERP accounts.

Loss Before Income Tax Provision and Allocation of Non-Controlling Interest. The Company recorded a pre-tax loss of $6,951,000$261,000 in the firstsecond quarter of 2011 versus a pre-tax loss of $177,000$12,796,000 for the same period in 2010. The Company is taxed as a partnership and thus the Company’s annual results

KAISER VENTURES LLC AND SUBSIDIARIES

of operations (on an income tax basis) are allocated to the unit holders for inclusion in their respective income tax returns.

Net Loss Attributable to Controlling Interest.For the second quarter of 2011, the Company incurred a net loss attributable to controlling interest of $232,000, which is equal to $0.03 per unit, versus a loss of $10,699,000, or $1.60 per unit for the same period in 2010.

Analysis of Results for the Six Months Ended June 30, 2011 and 2010

Revenues. Total revenues for the first six months of 2011 were $1,169,000, compared to $942,000 for 2010. The reasons for this increase are discussed below.

Revenue from the Company’s equity method investment in the West Valley MRF increased by $300,000 to $1,102,000 as compared to $802,000 for 2010. This increase, which is the result of increased operating profit from the West Valley MRF, is due primarily to higher recyclable sales resulting from the continuing increase in recyclable commodity prices (fiber and aluminum). However, West Valley continues to receive lower waste volumes due to the lingering impacts of the U.S. economic recession. The impact of higher commodity prices was partially offset by higher recyclable rebates and buyback expenses in 2011.

Revenue from Eagle Mountain operations for the first six months of 2011 decreased by $73,000 to $67,000 as compared to $140,000 for 2010. This decrease is primarily the result of decreased sales of rock which was partially offset by increased media related revenues.

Operating Costs. Operating costs decreased to $7,512,000 for the first six months of 2011 from $13,118,000 for the same period in 2010. This decrease relates primarily to the $12,504,000 write –down of MRC’s investment in the Eagle Mountain Landfill project during the same period in 2010 versus the additional $6,683,000 write-down in the first quarter of 2011. In addition, the Company recorded $269,000 in non-capitalized MRC expenses in 2011 versus none in 2010.

Net Interest and Investment Income. Net interest and investment income, including net realized and unrealized gains of $57,000, for the first six months of 2011, was a gain of $135,000 compared to a gain of $80,000 for the same period in 2010. Of the $135,000 gain for the first six months of 2011; $78,000 relates to interest income, $9,000 was net realized and unrealized gains on the Company’s short-term investments and $48,000 relates to an unrealized gain on the Company’s SERP accounts.

Loss Before Income Tax Provision and Allocation of Non-Controlling Interest. The Company recorded a pre-tax loss of $7,211,000 in the first six months of 2011 versus a pre-tax loss of $12,973,000 for the same period in 2010. The Company is taxed as a partnership and thus the Company’s annual 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: (a) federal income taxes imposed on the Company’s Business Staffing Inc. subsidiary (in 2010 only) and; (b) a gross revenue tax imposed by the State of California.

Net Loss Attributable to Controlling Interest.For the first quartersix months of 2011, the Company incurred a net loss attributable to controlling interest of $5,796,000, which is equal to $0.86$6,027,000, or $0.89 per unit, versus a loss of $180,000,$10,879,000, or $0.03$1.63 per unit for the same period in 2010.

KAISER VENTURES LLC AND SUBSIDIARIES

FINANCIAL POSITION

Cash, and Cash Equivalents and Short-Term Investments. The Company defines cash equivalents as highly liquid debt instruments with original maturities of 90 days or less. Cash and cash equivalents decreased $407,000$453,000 to $361,000$315,000 at March 31,June 30, 2011 from $768,000 at December 31, 2010. Included in cash

KAISER VENTURES LLC AND SUBSIDIARIES

and cash equivalents is $48,000$37,000 and $124,000 held solely for the benefit of MRC at March 31,June 30, 2011 and December 31, 2010, respectively.

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

Working Capital. During the first threesix months of 2011, current assets decreased $361,000$1,117,000 to $6.4$5.7 million, while current liabilities increased $20,000decreased $87,000 to $2.0$1.9 million. The decrease in current assets was the net result of a decreasedecreases in accounts receivableshort term investments of $24,000$754,000 and the decrease$453,000 in cash and equivalents as discussed above. These decreases were partially offset by an increase in restricted cash of $45,000$48,000 and an increase in short-term investmentsAccounts Receivable of $25,000.$42,000. The increasedecrease in current liabilities is the net result of an increasedecreases of $150,000$13,000 and $76,000 in accounts payable partially offset by $130,000 decrease inand accrued liabilities.liabilities, respectively. As a result, working capital decreased during the first threesix months of 2011 by $381,000$1,030,000 to $4.4$3.8 million at March 31,June 30, 2011.

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

Accounts Receivable and Other (Net). During the first threesix months of 2011, accounts receivable and other current assets decreasedincreased by $24,000$42,000 due to a decreasean increase in prepaid insurance.

Short-Term Investments. During the first threesix months of 2011, short-term investments increaseddecreased by $25,000.$754,000. This is primarily the result of the reinvestmentsale of interest on the Company’s investments.investments to provide operating funds. On March 31,June 30, 2011, the Company had $4.1$3.4 million of its excess cash reserves invested in such investments. Investments are marked to market and unrealized earnings or loss are reflected in the value of the investment and in income for the period for which they are earned.

Investments. The Company’s equity share of income from the investment in the West Valley MRF, which totaled $539,000$1,102,000 for the first threesix months of the year, was offset by the receipt of cash distributions totaling $500,000 resulting in a $39,000$602,000 increase to the Company’s investment in the West Valley MRF. As previously stated, the investment in the MRC Landfill Project was determined to be impaired and, therefore, was written-down by $6,683,000 during the first quarter of 2011 which was charged to earnings. As required by the ASC, all subsequent Eagle Mountain Landfill expenses will be expensed as incurred.

KAISER VENTURES LLC AND SUBSIDIARIES

Other Assets. For the first threesix months of the year, there was a decrease in other assets of $80,000$159,000 which is the net result of the amortization of the environmental insurance policy of $75,000,$150,000, and an increase in accumulated depreciation as of March 31,June 30, 2011 of $5,000.$9,000. See Note 2. “ENVIRONMENTAL MATTERS”.

KAISER VENTURES LLC AND SUBSIDIARIES

Environmental Remediation. The Company purchased, in 2001, a 12-year $50 million insurance policy to cover substantially any and all environmental claims (up to the $50 million policy limit) relating to the historical operations of the Company. As of March 31,June 30, 2011, 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 Prologis, in its purchase of the Mill Site Property in August 2000 would be approximately $2.7 million for which a reserve has been established. See Note 2. “ENVIRONMENTAL MATTERS”. 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 insurance depending upon the nature and timing of the claim.

Non-Controlling Interest. As a result of the write-down of the Eagle Mountain Landfill investment, as of March 31,June 30, 2011, the Non-Controlling Interest recorded on the Company’s balance sheet was reduced by $1,147,000$1,173,000 to $1,989,000$1,963,000 which relates to the approximate 17.0% ownership interest in MRC that the Company does not own. Current MRC expenditures are no longer being capitalized but are charged against income. As of March 31,June 30, 2011 the resulting non-controlling interest is $1,989,000.$1,963,000.

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

Critical Accounting Policies

The Company’s accounting policies are more fully described in the Notes to the Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. As disclosed in the Notes to the 2010 Annual Financial Statements, the preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty and therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may be material to the financial statements.

The Company believes the following critical accounting policies, which comply with the Accounting Standards Codification (“ASC”),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’its excess cash reserves in high grade commercial paper (Standard & Poor’s rating of “A” 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. However, the Company expects to hold these investments to maturity, thereby mitigating any 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, under the equity method of accounting because of the Company’s 50% non-controlling ownership interest.

Landfill Permitting and Development. Through its 83.13% interest in MRC, the Company has been developing, for sale to a municipal entity or operating company, its property known as the Eagle

KAISER VENTURES LLC AND SUBSIDIARIES

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 are recorded at cost and will be expensed when management determines that the capitalized costs provide no future benefit. However, as discussed in more detail in this Report on Form 10-Q, effective June 30, 2010 and March 31, 2011, there was a determination of impairment of MRC’s investment in the Eagle Mountain Landfill Project which

KAISER VENTURES LLC AND SUBSIDIARIES

resulted in write-downs of the carrying amount of such investment in our financial statements. With the determination that an impairment exists no further 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 ASC 410Accounting for Asset Retirement and Environmental Obligations.

Long-Lived Assets. In accordance with Section 410-20360 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. As discussed in more detail in this Report of Form 10-Q, effective June 30, 2010 and March 31, 2011, there were determinations of impairment of the Eagle Mountain Landfill investment, a long-lived asset, which resulted in write-down of the carrying amount of such investment in our financial statements.

BUSINESS OUTLOOK

The statements contained in this Business Outlook, as well as in “Part I—Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS—Overview”, are based upon current operations and expectations. In addition to the forward-looking statements and information contained elsewhere in this Report on Form 10-Q, 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 ownership interest in the MRC Landfill Project; (ii) our 50% equity ownership of the West Valley MRF; (iii) miscellaneous property at or near the Eagle Mountain Townsite; and (iv) the resources at the Eagle Mountain Site on our fee owned property that are not a part of the Landfill Project such as the millions of tons of iron ore, stockpiled rock

KAISER VENTURES LLC AND SUBSIDIARIES

and other mineral resources. 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 and investments in light of how to best provide maximum value to our members.

KAISER VENTURES LLC AND SUBSIDIARIES

In regard to the West Valley MRF, the most significant factors affecting our future equity income will continue to depend upon: (i) the ability of the West Valley MRF to retain customers and waste volumes at attractive processing rates; (ii) recyclable commodity prices; (iv)(iii) the ability to increase prices to reflect increases in such items as transportation, labor and disposal costscosts; and (iv) future competition from competing facilities. The performance of the West Valley MRF, which was negatively impacted by the recent world-wide economic recession, has significantly improved in the first quartersix months of 2011 versus 2009 and 2010 primarily as a result of increasing commodity prices. However, the overall performance of the West Valley MRF is still below the levels achieved in 2008. Additionally, the West Valley MRF is continuing the process of evaluating possible waste-to-energy and composting projects that might be capable of utilizing a portion of the municipal solid waste received at the facility. Finally, as part of our cash maximization strategy, we intend to evaluate any potential offers to purchase our interest in West Valley or other alternatives in light of our primary objective 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.

Pending Sale of Eagle Mountain Landfill Project; Write-Down of Investment in MRC. As discussed in more detail in “Part I—Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS—BUSINESS UPDATE—Eagle Mountain Landfill Project and Pending Sale.” In August 2000, MRC entered into that certain 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 (“Landfill Project Sale Agreement”) with the District. The sale price for the Landfill Project is approximately $41 million, plus an estimated approximate $8.8$8.9 million in accrued interest from May 2001 to the date of this Report on Form 10-Q. The sale is subject to a number of conditions, several of which remain to be satisfied, including resolution of the federal litigation involving a completed land exchange which has been adverse to the Company. On March 28, 2011, the U.S. Supreme Court denied our request to further review the prior adverse decision of the U.S. 9^th Circuit Court of Appeals. Thus, we are currently in the process of determining the best means of addressing the deficiencies identified by the U.S. 9^th Circuit Court of Appeals through the BLM, whilewhich we refer to as a “fix.” Even though we are evaluating pursuing a fix through the BLM of the deficiencies found to exist by U.S. 9^th Circuit Court of Appeals, with the denial of our appeal to the U.S. Supreme Court, our quarterly analysis pursuant to generally accepted accounting principles (“GAAP”)the ASC of whether the investment in Eagle Mountain Landfill Project was impaired, resulted in a determination of impairment and a write-down of the carrying amount of the MRC investment in the Eagle Mountain Landfill Project as of March 31, 2011.

Mill Site Property. The only remaining Mill Site Property owned by the Company is an approximate five acre parcel referred to as the Tar Pits Parcel. CCG Ontario, LLC substantially completed all material environmental remediation of this parcel pursuant to the terms of its agreement during 2002. CCG Ontario does have ongoing operations and maintenance obligation with respect to the Tar Pits Parcel. West Valley has the right to purchase the Tar Pits Parcel for $1.00.

Cash Maximization Strategy. In September 2000, Kaiser Inc.’s Board of Directors approved a strategy to maximize the cash ultimately to be distributed to our owners taking into account all circumstances and applicable legal requirements. This strategy was continued with the conversion of Kaiser Inc. to a limited liability company at the end of 2001. Consistent with this strategy, Kaiser Inc. historically completed or entered into a number of transactions which resulted in Kaiser Inc. distributing a total of $12 per unit in cash to its shareholders. The adverse federal land exchange litigation that impacts the Landfill Project alters and impacts the timing of the continuing implementation of the cash maximization

KAISER VENTURES LLC AND SUBSIDIARIES

strategy, including materially adversely impacting any amount that may be received in the future by our unitholders. Thus, the final implementation of the cash maximization strategy will occur upon the positive resolution of the current adverse federal litigation involving the landfill project by a fix through the BLM and the sale of such project and upon the completion of the exploration and pursuit of possible mineral resource opportunities at the Eagle Mountain Site. Accordingly, final implementation of

KAISER VENTURES LLC AND SUBSIDIARIES

the cash maximization strategy could take an additional significant period of time. We are currently working ofon the following material matters:

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 current projects are completed and sold which may take 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, 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.

KAISER VENTURES LLC AND SUBSIDIARIES

Capital Resources.Kaiser LLC 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 as well as expense reductions will be sufficient to satisfy the Company’s ongoing projected operating cash requirements for the next twelve months. However, significant additional funds may be necessary beyond 2011 to complete certain of our projects.

KAISER VENTURES LLC AND SUBSIDIARIES

Within the 90 days prior to the date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-14.

Based on its review of the Company’s disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its subsidiaries) that is required to be included in the Company’s periodic Securities and Exchange Commission filings. Specifically, since 2007, the Company has: (a) requested annually that all of the critical employees, officers and Members of the Board of Managers of the Company complete an extensive internal control and risk management questionnaire; and (b) internally reviewed and tested the implementation of its internal controls against the Company’s written control procedures. The above conclusions are based upon the work performed. There were no significant changes in internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

FINANCIAL STATEMENTS

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KAISER VENTURES LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

as of

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

KAISER VENTURES LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

as of

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

KAISER VENTURES LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

for the Three and Six Months Ended March 31June 30

(Unaudited)

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

KAISER VENTURES LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

for the ThreeSix Months Ended March 31June 30

(Unaudited)

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

KAISER VENTURES LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1. BASIS OF PRESENTATION

The unaudited consolidated financial statements of Kaiser Ventures LLC and Subsidiaries (the “Company”) as of March 31,June 30, 2011 and 2010, as well as the related notes, should be read in conjunction with the Company’s audited consolidated financial statements and related notes as of and for the year ended December 31, 2010, included in the Company’s Annual Report on Form 10-K. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the Company’s financial position at March 31,June 30, 2011, and results of operations and cash flows for the threesix month periodperiods ended March 31,June 30, 2011 and 2010.

The Company’s consolidated financial statements include the following significant entities: Lake Tamarisk Development, LLC; Kaiser Eagle Mountain, LLC; Kaiser Recycling LLC; all of which are 100% owned; and Mine Reclamation, LLC, which is 83.13% owned.

As discussed in our 2010 Annual Report on Form 10-K as a subsequent event, effective January 1, 2011, the Company sold its Business Staffing, Inc. (“BSI”) subsidiary to Richard Stoddard, James Verhey and to Tri-C, LLC, a limited liability company controlled by Terry Cook. Messrs. Stoddard, Verhey and Cook are the executive officers of the Company. BSI was established in 2001 in connection with the conversion of Kaiser Ventures Inc. to a limited liability company. BSI is an administrative services company that provides administrative services and employees to the Company. BSI is reimbursed by the Company, without mark-up, only for the expenses it incurs in providing services for the benefit of the Company and its subsidiaries. BSI will continue to provide services for the Company and its subsidiaries on such basis in accordance with an Amended and Restated Administrative Services Agreement. The purchase price for all of the stock of BSI was $3.00 plus the assumption of certain liabilities such as the deferred compensation obligations to those employees or prior employees that are currently participants in the Company’s supplemental executive retirement plans. BSI will be responsible for such plans going forward and will become the sponsor for each plan. At January 1, 2011, BSI had minimal assets and liabilities. There was no gain or loss on the sale. Sincetransaction, which was recorded in the sale of BSI did not occur until the close of business on December 31, 2010, the consolidated financial statements as of December 31, 2010 and for the first quarter of 2010 that are included in this Form 10-Q Report do reflect BSI as a wholly-owned subsidiary for those periods.March 2011 results.

Kaiser is the reorganized successor to Kaiser Steel Corporation, referred to as KSC, which was an integrated steel manufacturer that filed for bankruptcy protection in 1987. Since KSC’s bankruptcy, we have been developing assets remaining after the bankruptcy and have realized substantial value from certain of those assets. Currently, our principal remaining assets are:

(i) An 83.13% ownership interest in Mine Reclamation, LLC, (referred to as MRC), which owns a permitted rail-haul municipal solid waste landfill at a property called the Eagle Mountain Site located in the California desert (the “Landfill Project”). This landfill is currently subject to a contract for its sale to County District No. 2 of Los Angeles County (which we refer to as the District) for approximately $41 million plus accrued interest, which sale is subject to a number of conditions, several of which remain to be fully satisfied;

(ii) A 50% ownership interest in the West Valley Materials Recovery Facility and Transfer Station, a transfer station and materials recovery facility located on land acquired from Kaiser, which we refer to as the West Valley MRF;

(iii) Approximately 5,400 additional acres owned or controlled by Kaiser at the Eagle Mountain Site that are not included in the pending sale to the District; and

KAISER VENTURES LLC AND SUBSIDIARIES

(iv) The resources at the Eagle Mountain Site on our fee owned property that are not a part of the Landfill Project such as the millions of tons of stockpiled rock and other mineral resources such as iron ore.

KAISER VENTURES LLC AND SUBSIDIARIES

Note 2. ENVIRONMENTAL MATTERS

The Company purchased an insurance policy effective June 30, 2001 that is designed to provide broad prospective commercial general liability, pollution legal liability, and contractual indemnity coverage for the Company’s ongoing and historical operations. The policy has a twelve (12) year term and limits of $50 million in the aggregate for defense and indemnity, with no deductible or self-insured retention. The policy is designed to provide coverage for future claims in excess of the Company’s existing and historic insurance policies; however, to the extent that these other insurance policies are not responsive to a claim, the policy will provide first dollar coverage for a claim resulting from property damage, personal injury, bodily injury, cleanup costs or violations of environmental laws. The policy also provides for a broad defense of claims that may be brought against the Company. The policy is specifically intended to provide additional coverage for potential liabilities arising from pollution conditions or known and/or potential asbestos-related claims. The policy also provides contractual indemnity coverage for scheduled indemnity obligations of the Company arising from, e.g., prior corporate transactions and real estate sales. The Company expects this policy will cover substantially any and all environmental claims (up to the $50 million policy limit) relating to the historical operations of the Company.

The aggregate cost for this policy was approximately $5.8 million, of which, based upon discussions among the respective members of the Boards of Directors, KSC Recovery paid $2 million and the Company paid the balance of approximately $3.8 million. The portion of the policy paid by KSC Recovery was expected to cover known and/or potential asbestos claims; while the portion of the policy paid by the Company was expected to cover future potential claims arising from the Company’s historical operations.

The Company’s original $3.8 million premium for the prospective insurance policy was capitalized as a long-term asset and is being amortized on a straight-line basis over the 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. Generally, unless previously accrued, the liability and the receivable relating to claims covered by this policy should occur in the same accounting period, thereby having no adverse or beneficial impact on the Company’s operating results for that accounting period.

Note 3. INVESTMENTS

The Company has an Investment Policy which provides for the investment of excess cash balances primarily in bond funds, commercial paper, and debt instruments. At March 31,June 30, 2011 the Company had all of its investments in bonds, bond funds or high grade commercial paper (Standard & Poor’s rating of “A” or above) which is classified as “available-for-sale.”

Pursuant to Section 825-10 of the ASC, the Company at the end of a period, compares the actual market value to the actual cost and uses that calculation to determine any gain or loss on the maturity or sale of each available-for-sale investment.

The following is a summary of the fair value of investment securities classified as “available-for-sale” as of March 31,June 30, 2011 and December 31, 2010. For each item included in the table below the gains or losses from Fair Value reporting are included in income for the first quarter.

KAISER VENTURES LLC AND SUBSIDIARIES

Note 4. FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value:

Level 1—Quoted prices in active markets for identical assets or liabilities.

Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3—Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed is determined based on the lowest level input that is significant to the fair value measurement.

Our short-term investments in commercial paper and bonds represent available-for-sale securities that are valued primarily using quoted market prices utilizing market observable inputs.

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KAISER VENTURES LLC AND SUBSIDIARIES

The following table presentpresents information about our assets measured at fair value on a recurring basis at March 31,June 30, 2011 and December 31, 2010, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.

In addition to the assets listed in the table, other short-term financial assets and liabilities of the Company consist of accounts receivable, accounts payable and certain accrued liabilities. These financial assets and liabilities generally approximate fair market value based on their short-term nature.

Note 5. INVESTMENT IN WEST VALLEY MRF, LLC

Effective June 19, 1997, Kaiser Recycling Corporation (“KRC”) (now Kaiser Recycling, LLC) and West Valley Recycling & Transfer, Inc. (“WVRT”), a subsidiary of Burrtec Waste Industries, Inc. (“Burrtec”), which are equal members of West Valley MRF, LLC, (a California limited liability company) entered into a Members Operating Agreement (“MOA”) which is substantially the equivalent of a joint venture agreement for a limited liability company. The construction and start-up of the West Valley MRF was completed during December 1997.

Most of the financing for the construction of the West Valley MRF of approximately $22 million, was obtained through the issuance and sale of two California Pollution Control Financing Authority (the “Authority”) Variable Rate Demand Solid Waste Disposal Revenue bonds. The bonds are secured by an irrevocable letter of credit issued by Union Bank of California, N.A. (“Union Bank”). As of March 31,After the June 30, 2011 payment, the total outstanding Authority debt is $6,450,000.$5,820,000.

The payment schedule as of February 28,May 31, 2011, for the California Pollution Control Authority bonds is summarized below.

KAISER VENTURES LLC AND SUBSIDIARIES

The Company also remains responsible for any pre-existing environmental conditions on the land on which the WVMRF is located, which is covered by insurance.

The Company is accounting for its investment in West Valley MRF, LLC under the equity method.

Due to the time required to close the books of the West Valley MRF, LLC and in keeping with past practice, there is a one month delay in reporting the results of West Valley MRF, LLC. The condensed summarized financial information of West Valley MRF, LLC is as follows:

The increase in current assets between November 30, 2010 and February 28,May 31, 2011 is due primarily to an increase in cash. The increase in Members’ Equity for the West Valley MRF between November 30, 2010 and February 28,May 31 , 2011, is primarily due to the fact that net income exceeded cash distributions during this period.

The Company recognized equity income from the West Valley MRF of $539,000$1,102,000 and $358,000$802,000 for the first threesix months of 2011 and 2010, respectively.

Note 6. EVALUATION OF LONG-LIVED ASSETS

In accordance with Section 410-20360 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. Our reviews as of March 31,June 30, 2011, concluded that no impairment of the following long-lived assets had occurred: (a) our 50% ownership interest in the West Valley MRF because the West Valley MRF continues to generate significant net income and positive cash flow; and (b) our other real estate and building and equipment are recorded at the lower of cost or fair market values.

Even though we are evaluating pursuing a “fix” through the BLM of the deficiencies found to exist by U.S. 9^th Circuit Court of Appeals, with the denial of our appeal to the U.S. Supreme Court, our quarterly analysis pursuant to generally accepted accounting principles (“GAAP”)the ASC of whether the MRC investment in Eagle Mountain Landfill Project was impaired, resulted in a determination of impairment and a write-down of the carrying amount of the MRC investment in Eagle Mountain Landfill Project as of March 31, 2011. As required by GAAP, the impairment determination and resulting calculation of fair value of the carrying amount of the MRC investment in Eagle Mountain Landfill Project were made utilizing a probability analysis of the remaining options with regard to the Landfill Project after the U.S. Supreme Court declined to accept the petition requesting further review of the adverse U.S. 9^th Circuit Court of Appeals decision as of March 28, 2011. The total amount of the write-down was $6,683,000 which was charged to earnings in the first quarter of 2011. Previously, in 2010, the Company recorded a $12,504,000 write-down of MRC’s Eagle Mountain Landfill Project investment as a result of its quarterly evaluation of long-lived assets and its determination that impairment had occurred as of June 30, 2010.

KAISER VENTURES LLC AND SUBSIDIARIES

Note 7. COMMITMENTS AND CONTINGENCIES

Environmental Contingencies. As discussed in Note 2, effective June 30, 2001, the Company purchased 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. 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 ASC 450-10 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.

As of March 31,June 30, 2011, the Company estimates, based upon current information and discussions with environmental consultants, that its future environmental liabilities related to certain matters not assumed by CCG Ontario, LLC in its purchase of a substantial portion of Kaiser’s former Fontana mill site property (“Mill Site Property”), including a certain groundwater matter as well as potential matters at Eagle Mountain and at other historical locations, will be approximately $2.7 million. In the event that a future environmental claim for damages is filed against the Company such claim may be covered by insurance depending upon the nature and timing of the claim.

Landfill Project Litigation. Currently, the only pending litigation involving the Landfill Project concerns two lawsuits filed in U.S. District Court located in Riverside County challenging the completed federal land exchange. On September 20, 2005, the U.S. District Court for the Central District of California, Eastern Division, issued an opinion and order which concluded that the land exchange be reversed and the case be sent back to the BLM for further action consistent with the opinion. The Company and the U.S. Department of Interior appealed the decision to the U. S. 9^th Circuit Court of Appeals. In November 2009, a three judge panel of the U.S. 9^th Circuit Court of Appeals released its decision on the matter. The majority of the panel affirmed and reversed in part the U.S. District Court decision. The dissenting judge would have found in the Company’s and BLM’s favor on all matters. The Company sought further review of this decision by a broader panel of U.S. 9^th Circuit of appeals judges but on July 30, 2010, such review was denied by the 9^th Circuit. On March 28, 2011, the U.S. Supreme Court denied our request to further review the prior adverse decision of the U.S. 9^th Circuit Court of Appeals. Thus, we are currently in the process of determining the best means of addressing the deficiencies identified by the U.S. 9^th Circuit Court of Appeals through the U.S. Bureau of Land Management (“BLM”). This decision could adversely impact the viability of the Landfill Project and the agreement to sell the Landfill Project to the District, including termination of the agreement. As of June 30, 2010 and March 31, 2011, the Company has written-down the MRC investment in the Eagle Mountain Landfill Project. (See Note 56 above.)

MRC Financing. Since Kaiser became an owner of MRC in 1995, MRC has been financed through a series of private placements to its existing equity owners. As a result of our investments in MRC our ownership interest in MRC is currently 83.13%. Additional funding will be required to finance ongoing operations and any “fix” strategy that may be undertaken as a result of the U.S. 9^th Circuit Court of Appeals decision. It is anticipated that a private placement of approximately $1.3 million will be undertaken by MRC in the secondthird quarter of 2011.

Contingent Distributions on Class B, C and D Units. Upon the sale of certain of the Company’s assets at a price equal to or greater than certain minimum sales prices, distributions will be made on the Class B, C and D Units in accordance with their respective terms.

Note 8. RECENT ACCOUNTING PRONOUNCEMENTS

From time to time, new accounting pronouncements are issued by the FASBFinancial Accounting Standards Board that are adopted by the company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the company’s consolidated financial statements upon adoption.

KAISER VENTURES LLC AND SUBSIDIARIES

In January 2010,June 2011, the Financial Accounting Standards Board, or FASB, issued revised authoritative guidance thatregarding the presentation of comprehensive income. The new standard requires more robust disclosures about the different classespresentation of assets and liabilities measured at fair value,comprehensive income, the valuation techniques and inputs used, the activity in Level 3 fair value measurements,components of net income and the transfers between Levels 1, 2components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The new standard also requires presentation of adjustments for items that are reclassified from other comprehensive income to net income in the statement where the components of net income and 3. Thisthe components of other comprehensive income are presented. The updated guidance is effective on a retrospective basis for financial statements issued for fiscal years, and interim and annual reporting periods beginning after December 15, 2009 (which is January 1, 2010 for the Company) except for the disclosures about purchases, sales, issuances, and settlements in the roll forward activity in Level 3 fair value measurements. Those disclosures are effective forwithin those fiscal years, beginning after December 15, 2010,2011. The adoption of this guidance will not have a material impact on our financial statements.

In May 2011, the FASB issued additional guidance on fair value measurements that clarifies the application of existing guidance and disclosure requirements, changes certain fair value measurement principles and requires additional disclosures about fair value measurements. The updated guidance is effective on a prospective basis for financial statements issued for fiscal years, and interim periods within those fiscal years, (which is January 1, 2011 for the Company). Early application is encouraged. The revised guidance was adopted as of January 1, 2010.beginning after December 15, 2011. The adoption of this guidance didwill not have a material impact on the Company’s consolidatedour financial position, results of operations and cash flows.statements.

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KAISER VENTURES LLC AND SUBSIDIARIES

PART II

As discussed in our Annual Report on Form 10-K for 2010, we are engaged in certain claims and litigation. As of the date of the filing of this Report on Form 10-Q, there have not been any material developments in the legal proceedings involving the Company from the date of the filing of our Report on Form 10-K for the period ended December 31, 2010, except as noted below.

As extensively discussed under “Part I—Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS—BUSINESS UPDATE—Eagle Mountain Landfill Project—Current Landfill Litigation,” in March 2011, the U.S. Supreme Court elected not to accept our petition requesting review of the adverse decision by the U.S. 9^th Circuit Court of Appeals regarding the completed land exchange that is necessary for the Landfill Project. Thus, we are currently evaluating pursuing a fix through the BLM.

Not applicable. However, MRC is conducting a private placement to its existing members.

Not applicable.

Not applicable.

As discussed and disclosed in our 2010 Annual Reportpreviously reported, on Form 10-K and our Report on Form 8-K dated December 3, 2010, effective as of the close of business on December 31, 2010, the Company sold its Business Staffing, Inc. (“BSI”) subsidiary to Richard Stoddard, James Verhey and to Tri-C, LLC, a limited liability company controlled by Terry Cook. Messrs. Stoddard, Verhey and Cook are the executive officers of the Company. The Board of Managers of the Company, with Mr. Stoddard abstaining, unanimously approved the sale transaction. The purchase price for all of the stock of BSI was $3.00 plus the assumption of certain liabilities such as the deferred compensation obligations to those employees or prior employees that are currently participants in the supplemental executive retirement plans. BSI will be responsible for such plans going forward and will become the sponsor for each plan. Additionally, upon completion of their transfer to BSI, BSI will not be reimbursed for certain expenses associated with these plans that were or are being paid by the Company such as any taxes associated with these plans. No gain or loss was realized on the transaction.

On May 11, 2011, the Board of Managers took the following actions, among others:

KAISER VENTURES LLC AND SUBSIDIARIES

KAISER VENTURES LLC AND SUBSIDIARIES

Exhibits for the foregoing items, as appropriate, were filed with the Company’s Report on Form 10-Q for the quarter ended March 31, 2011.

Exhibit 3.1* - Fourth Amendment to the Amended and Restated Operating Agreement of the Company dated May 11, 2011.**

Exhibit 10.1* - Second Amendment to the Employment Agreement of Richard E. Stoddard dated May 11, 2011.**

Exhibit 10.2* - Second Amendment to the Employment Agreement of James F. Verhey dated May 11, 2011.**

Exhibit 10.3* - Second Amendment to the Employment Agreement of Terry L. Cook dated May 11, 2011.**

Exhibit 10.4* - First Amendment to the Employment Letter Agreement of Gerald A. Fawcett dated May 11, 2011.**

Exhibit 10.5* - First Amendment to the Amended and Restated Administration Service Agreement between the Company and Business Staffing, Inc. dated May 11, 2011.**

KAISER VENTURES LLC AND SUBSIDIARIES

Exhibit 31.1 - Certificate of Richard E. Stoddard, Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a).**

Exhibit 31.2 - Certificate of James F. Verhey, Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a). ***

Exhibit 32 - Certificate of Richard E. Stoddard, Chief Executive Officer, and James F. Verhey, Chief Financial Officer, pursuant to Section 1350. ***

Exhibit 101 - The following materials from Kaiser Ventures LLC Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Income; (iii) Condensed Consolidated Statements of Cash Flows; (iv) Condensed Consolidated Statements of Shareholders’ Equity; and (v) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text.

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KAISER VENTURES LLC AND SUBSIDIARIES

SIGNATURES

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

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