<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549


                                   FORM 10-Q


              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934


For the Quarter Ended March 31, 2001              Commission File Number 0-18858


                             KAISER VENTURES INC.
                             --------------------
            (Exact name of registrant as specified in its charter)


              DELAWARE                                  94-0594733
   -------------------------------                  -------------------
   (State or other jurisdiction of                   (I.R.S. Employer
    incorporation or organization)                  Identification No.)


                   3633 East Inland Empire Blvd., Suite 850
                          Ontario, California  91764
             -----------------------------------------------------
             (Address of principal executive offices and zip code)


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

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 registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court.

                               Yes  X   No
                                   ---

On May 5, 2001, the Company had 6,552,687 shares of Common Stock, $.03 par
value, outstanding (including 136,919 shares deemed outstanding and held in
reserve by the Company for issuance to the former general unsecured creditors of
Kaiser Steel Corporation pursuant to its Plan of Reorganization).
<PAGE>

                        TABLE OF CONTENTS TO FORM 10-Q

                                                                            PAGE
PART I

  FORWARD-LOOKING STATEMENTS...............................................  1

  Item 1.      FINANCIAL STATEMENTS........................................ 2/13

  Item 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                CONDITION AND RESULTS OF OPERATIONS........................  2

  FINANCIAL STATEMENTS

               CONSOLIDATED BALANCE SHEETS................................. 13

               CONSOLIDATED STATEMENTS OF INCOME........................... 15

               CONSOLIDATED STATEMENTS OF CASH FLOWS....................... 16

               CONSOLIDATED STATEMENT OF CHANGES IN
                STOCKHOLDERS' EQUITY....................................... 17

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.................. 18

PART II

  Item 1.      LEGAL PROCEEDINGS........................................... 19

  Item 2.      CHANGES IN SECURITIES....................................... 19

  Item 3.      DEFAULTS UPON SENIOR SECURITIES............................. 19

  Item 4.      SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS........... 19

  Item 5.      OTHER INFORMATION........................................... 19

  Item 6.      EXHIBITS AND REPORTS ON FORM 8-K............................ 20

SIGNATURES................................................................. 21


                       AVAILABILITY OF PREVIOUS REPORTS
                       --------------------------------

  The Company will furnish without charge, to each stockholder, upon written
request of any such person, a copy of the Company's annual report on Form 10-K
for the year ended December 31, 2000, as filed with the Securities and Exchange
Commission, including the financial statement schedules thereto. Those
requesting a copy of the 10-K Report that are not currently stockholders of the
Company may also obtain a copy directly from the Company. Requests for a copy of
the 10-K Report should be directed to Executive Vice President-Administration,
at 3633 East Inland Empire Boulevard, Suite 850, Ontario, California 91764.

  The reader is encouraged to read this Form 10-Q Report in conjunction with
the Company's 10-K Report for the period ended December 31, 2000, since the
information contained herein is often an update of the information in the 10-K
Report.

                                       i
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                     KAISER VENTURES INC. AND SUBSIDIARIES

                                    PART I

                          Forward-Looking Statements

  Except for the historical statements and discussions contained herein,
statements contained in this 10-Q 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 press
release, 10-K, Annual Report to Stockholders, 10-Q or 8-K Report of the Company
or the Company's website, 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. Forward-looking
statements include, without limitation, any statement that forecasts, indicate,
anticipate or imply future results, performance, events or achievements. When
used or incorporated by reference in this 10-Q Report or in other written or
oral statements, the words "anticipate," "believe," "estimate," "expect,"
"project" and similar expressions are intended to identify forward-looking
statements. Such statements are subject to certain risks, uncertainties and
assumptions. 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, actual results could materially differ from those projected as a result
of factors such as, but not limited to, general economic conditions in the
United States and Southern California; the impact of federal, state, and local
laws and regulations on the Company's activities; the failure of the bankruptcy
discharge granted to the Company to address claims and litigation that relate to
the pre-bankruptcy activities of Kaiser Steel Corporation; the failure, in whole
or in part, of the Company's business plans to, develop, sell or otherwise deal
with any major asset of the Company; the failure for any reason of CCG Ontario,
LLC to honor the terms of its agreements with the Company in connection with the
sale of the Mill Site real estate to CCG Ontario, LLC, including its assumption
of liability and responsibility for certain environmental obligations and duties
associated with the Mill Site; the success of any material litigation involving
the Company and its projects such as legal challenges to the completed federal
land exchange for the proposed Eagle Mountain landfill project; and/or the risks
and contingencies associated with the planned sale of the Eagle Mountain project
to the Los Angeles County Sanitation District. The risks included herein are not
exhaustive. Other sections of this 10-Q Report include additional factors that
could adversely impact the Company and its projects. Readers are cautioned not
to put undue reliance on forward-looking statements as a prediction of future
actual results. 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 10-Q Report is strongly encouraged to read the entire
report, together with the Company's 2000 10-K Report for background information
and a complete understanding as to material developments concerning the Company.

                                       1
<PAGE>

                     KAISER VENTURES INC. AND SUBSIDIARIES

Item 1.  FINANCIAL STATEMENTS

  The Financial Statements are located at the end of Item 2., beginning on
Page 13 of this Report and are incorporated herein by this reference.


Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS


                                BUSINESS UPDATE

General

  Kaiser Ventures Inc. ("Kaiser" or the "Company", including its wholly-owned
subsidiaries unless otherwise provided herein) is an asset development company
based in Southern California. The Company is the reorganized successor to
several of the assets of Kaiser Steel Corporation which was an integrated steel
manufacturer that filed for bankruptcy in 1987. The Company's current emphasis
is on its remaining principal assets: (i) an 80% interest in Mine Reclamation,
LLC ("MRC"), the developer of the Eagle Mountain Landfill Project (the "Landfill
Project"), with the Landfill Project under contract to be sold to Los Angeles
County Sanitation District No. 2 (the "District") for $41 million; (ii) the
approximately 9,144 acre idle iron ore mine in the California desert (the "Eagle
Mountain Site"), which includes the associated 1,100 acre town of Eagle Mountain
("Eagle Mountain Townsite") and the land leased to MRC for the Landfill Project;
and (iii) a 50% joint venture interest in the West Valley MRF ("West Valley
MRF"), a transfer station and recycling facility located on land acquired from
the Company. In addition, the Company has a substantial cash position as a
result of the sale of its interest in Fontana Union Water Company ("FUWC") on
March 6, 2001, for $87.5 million. The Company, as of December 31, 2000, had
approximately $43 million in regular federal net operating loss ("NOLs")
carryforwards, however due to the Company's sale of its FUWC stock in March
2001, it is anticipated that all of the existing NOLs will be utilized in the
current year.

Future Plans

  The Company has been developing the assets it received out of the Kaiser
Steel Corporation bankruptcy and then selling them at such time as the Company
believes that it can achieve maximum stockholder value for a particular project
or asset. During 2000, the Company: (i) sold the balance of all of the
Company's real estate at the former Kaiser Steel Corporation mill site near
Fontana, California, except for an approximate five acre parcel; (ii) entered
into an agreement to sell the Landfill Project to the District, with the Company
and the District working toward a closing on such transaction; (iii) entered
into an agreement for the sale of the Company's interest in FUWC to Cucamonga
County Water District ("Cucamonga"), which transaction was completed on March 6,
2001; and (iv) paid a $2.00 cash distribution to its stockholders.

  As a result of the items outlined above, the Company has been evaluating
and continues to evaluate its future strategy and business plan, as well as the
timing and alternative means of making its excess cash available to
stockholders. The alternatives being considered by the Company's Board of
Directors include, but are not limited to, a plan of reorganization or
dissolution, dividends, stock repurchases, a reformulation of the Company into a
different business form, one or more mergers, a sale of the Company, and/or
other similar transactions. In evaluating any alternative, the Board is
considering and

                                       2
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                     KAISER VENTURES INC. AND SUBSIDIARIES

will consider, among other factors: (i) the Company's current and anticipated
future contingent liabilities and cash needs; (ii) tax planning opportunities
and their timing, with the goal of reasonably minimizing taxes paid by the
Company and its stockholders; (iii) the anticipated timing of achieving maximum
value for the Company's remaining assets which may be several years in the
future; (iv) expenses, including general administrative and ongoing expenses,
related to any particular alternative; (v) the legal and other risks that may be
associated with any particular alternative; (vi) the timing of initiating and
completing any particular alternative; and (vii) the possible impacts of any
particular alternative may have on the trading in the Company's stock. The
foregoing listing of factors is not intended to list every point that is or will
be considered by the Company and its Board of Directors. During the first
quarter, the Board of Directors continued its evaluation of various
alternatives. It is currently anticipated that the Company's Board of Directors
will make a final determination on the appropriate alternative or series of
alternatives by the end of the second quarter of 2001.

Investment in Fontana Union Water Company

  Effective March 6, 2001, the Company completed the sale of its
approximately 53.71% ownership interest in the capital stock of FUWC, a mutual
water company, to Cucamonga for $87.5 million. In addition, the Company received
approximately $2.5 million in payments under the lease of FUWC shares to
Cucamonga. Stockholder approval for the sale was obtained. With the sale of the
FUWC interest, the lease with Cucamonga was effectively terminated and the rate
dispute litigation between the Company and Cucamonga was settled.

  In connection with the sale of the Company's ownership interest in FUWC, the
Company terminated its $30 million credit facility with Union Bank that was
secured by FUWC stock and the Cucamonga Lease.

The 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. This parcel's
environmental contamination is to be remediated by CCG Ontario, LLC. CCG
Ontario, LLC purchased approximately 588 acres of the mill site property from
the Company in August 2000 and assumed substantially all of the Company's
environmental liabilities associated with the property it purchased and it also
assumed certain other environmental liabilities and risks associated with the
former Kaiser Steel Corporation mill site.

Lake Tamarisk and Mining Properties

  Lake Tamarisk is an incorporated community located two mile northwest of
Desert Center, California and approximately 8 miles from the Eagle Mountain
Project. The Company, through its wholly owned subsidiary, owns 77 improved lots
including one residential structure, and a 240 acre parcel of unimproved land
across the highway from the main entrance to Lake Tamarisk (the "Lake Tamarisk
Properties"). On November 9, 2000, the Company entered into a Purchase and Sale
Agreement and Joint Escrow Instructions to sell the Lake Tamarisk Properties for
a gross purchase price of $1.75 million in cash. In the first quarter of 2001,
the potential buyer elected to terminate the purchase contract. The Company is
again marketing this property.

  Effective February 1, 2001, the Company sold approximately 190 acres near
Afton Canyon, California known as the Dunn Siding, the Silver Lake Mine west of
Baker, California which is a small producing iron ore mine, and some mining
claims and properties known as the Bessemer and Morris

                                       3
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                     KAISER VENTURES INC. AND SUBSIDIARIES

Lode properties. The Company received a gross sales price of approximately $2
million with $700,000 paid in cash and the balance represented by buyer's
secured promissory note payable over five years at 8% per annum.

Waste Management

West Valley Materials Recovery Facility

  The Company, through a wholly-owned subsidiary, and Burrtec Waste Industries,
Inc., also through a wholly-owned subsidiary, each own a fifty percent (50%)
interest in West Valley MRF, LLC, a limited liability company that owns the West
Valley MRF. A materials recovery facility or "MRF" sorts through municipal solid
waste to recover items that may sold into a commercial market such as paper,
cardboard, glass and aluminum cans. Phase 1 of the West Valley MRF includes a
62,000 square foot building, sorting equipment, and related facilities for waste
transfer and recycling services capable of process approximately 2,000 tons per
day of non-hazardous commercial and municipal solid waste.

  Given the level of demand for the services of the West Valley MRF, Burrtec and
the Company decided to expand the West Valley MRF. Construction of Phase 2 of
the West Valley MRF is nearly complete and it is expected to be fully
operational by the end of the second quarter of 2001. Phase 2 expands the
processing capacity of the West Valley MRF from approximately 2,000 tons per day
to 3,500 tons per day. Phase 2 involves constructing an approximately 80,000
square foot addition to the existing facilities, the purchase and installation
of certain related equipment, including rolling stock, and the rehabilitation
and relocation of certain existing equipment. The estimated cost of the
expansion is approximately $10 million.

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 80% 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 a maximum of 20,000 tons
per day of municipal solid waste for up to 88 years.

  Sale of Landfill Project.  Effective August 9, 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 the Company's royalty payments
under the MRC Lease) is being sold for $41 million, with an initial closing
currently anticipated to occur in the third quarter of 2001. However, payment of
the purchase price will be delayed as described in more detail below. The sale
of the Landfill Project is subject to the results of the District's due
diligence and satisfaction of numerous contingencies. 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. The
Company agreed to vote its interest in MRC in favor of the sale of the Landfill
Project to the District on its current terms.

                                       4
<PAGE>

                     KAISER VENTURES INC. AND SUBSIDIARIES

  Upon closing, $39 million of the total purchase price will be deposited into
an escrow account and will be released when litigation contingencies are fully
resolved.  The litigation contingencies are the federal litigation challenging
the completed federal land exchange.  Interest will accrue on this portion of
the purchase price and will be paid out to MRC on a quarterly basis beginning
with a successful outcome of the federal litigation at the Federal District
Court level. The remaining $2 million of the purchase price will also be placed
into an escrow account upon closing and will be released upon the later of (1)
the release of the $39 million as described above or (2) the permitting
approvals of the District's Puente Hills landfill for its remaining 10 years of
capacity. Receipt of the purchase price, in whole or in part, if at all, could
be delayed for a substantial period of time pending satisfactory resolution of
these contingencies.

  The District has been undertaking extensive due diligence on the Landfill
Project and is waiting for receipt of several items, including final land and
right-of-way surveys.  In addition, the parties are negotiating the terms of
various ancillary agreements such as joint use agreements for access, utilities,
and the Eagle Mountain railroad.  With the sale of the Landfill Project, the
Company will continue to own more than 4,000 acres in the Eagle Mountain area,
including the Eagle Mountain town site.  The parties agreed to extend the
closing date to no later than August 31, 2001.  Interest began to accrue on $39
million of the purchase price effective May 3, 2001.

  The foregoing summary of the Landfill Purchase Agreement is qualified in its
entirety by the Landfill Purchase Agreement filed as an exhibit to the Company's
second quarter 2000 10-Q Report and by Exhibit 10.1 to this 10-Q Report.

  Landfill Project Litigation.  Currently, the only pending litigation involving
the Landfill Project concerns two lawsuits filed in Federal District Court
located in Riverside County challenging the completed federal land exchange and
requesting its reversal.  To date, no immediate injunctive relief has been
sought.  These two lawsuits generally involve the same parties that were the
plaintiffs in the unsuccessful state environmental impact report litigation and
the unsuccessful appeals before the Interior Board of Land Appeals.

  A decision in an unrelated case has the potential of having a material adverse
impact on the federal land exchange litigation and thus, the Landfill Project
and its pending sale.  In November 2000, the Ninth Circuit U.S. Court of Appeals
issued a decision which required the reversal of the completed federal land
exchange for the competing Mesquite rail-haul landfill project.  In the case,
Desert Citizens Against Pollution v Bisson, (9th Circuit Court of Appeals, Case
No. 97-55429), the Court of Appeals, among other things, determined that the
U.S. Bureau of Land Management ("BLM") did not properly value the land being
acquired by the developer of the landfill project.  The Court concluded that the
appraisal should have considered the value of the land being acquired as a
potential landfill.  The court did not establish what it thought should be the
proper value of the exchanged lands. The plaintiffs in the Company's federal
land exchange litigation have amended their respective complaints to now assert
that the appraisal used to complete the federal land exchange between the BLM
and the Company is similarly defective.  As a result of the amended complaints
and several pending motions, the original trial schedule has been significantly
delayed.  Perhaps of most importance are the issues surrounding the procedures,
time, and additional investment that may be needed to implement an appraisal
review and possibly a new appraisal.

  Risks.  As is discussed in this 10-Q Report and in more detail in the
Company's 2000 Form 10-K Report, there are numerous risks associated with MRC
and the Landfill Project.  There are also numerous risks and contingencies
associated with the pending sale of the Landfill Project to the

                                       5
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                     KAISER VENTURES INC. AND SUBSIDIARIES

District. There can be no assurance that the sale to the District will occur or
that the current terms of the pending transaction may not be modified as a
result of future discussions with the District or as to the timing of the
receipt of the purchase price. In addition, there are litigation risks
associated with the current federal land exchange litigation, including reversal
of the completed land exchange which risks have increased as a result of the
Ninth Circuit Courts of Appeals' recent decision as more fully discussed above.

                               Operating Results

Primary Revenue Sources

Ongoing Operations

  The Company's revenues from ongoing operations are generally derived from the
development of the Company's long-term projects.  Revenues from water resources
represent payments under the lease of the Company's interest in FUWC to
Cucamonga. However, the lease with Cucamonga terminated effective March 6, 2001,
with the sale of the Company's interest in FUWC to Cucamonga. Income from equity
method investments reflect Kaiser's share of income related to its investment in
the West Valley MRF.

Interim Activities (net)

  Revenues from interim activities are generated from various sources.
Significant components of interim activities include water and waste water
treatment revenues, rentals under short-term tenant lease arrangements, royalty
revenues from the sale of slag to outside contractors, royalty revenues from the
sale of recyclable revert materials and other miscellaneous short-term
activities at the Mill Site; housing rental income, aggregate and rock sales and
lease payments for the minimum security prison at the Eagle Mountain Townsite;
royalty revenues from iron ore shipments from the Company's iron ore mine in
California (the "Silver Lake Mine") rentals under short-term tenant lease
arrangements, royalty revenues from the sale of slag to outside contractors,
royalty revenues from the sale of recyclable revert materials and other
miscellaneous short-term activities.  Due to the interim nature of these
activities the Company is presenting these revenues net of their related
expenses.  No revenues and expenses associated with the Mill Site Property and
only $39,000 of net revenues associated with the Silver Lake Mine were recorded
during 2001 due to the sales of these properties.

Summary of Revenue Sources

  Due to the developmental nature of certain Company 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 I, Item 1.  BUSINESS" for a discussion of
recent material events affecting the Company's revenue sources.

                                       6
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                     KAISER VENTURES INC. AND SUBSIDIARIES

Results of Operations

Analysis of Results for the Quarters Ended March 31, 2001 and 2000

  An analysis of the significant components of the Company's resource revenues
for the quarters ended March 31, 2001 and 2000 follows:

<TABLE>
<CAPTION>
                                                2001          2000      % Inc. (Dec)
                                             -----------   ----------   ------------
<S>                                          <C>           <C>          <C>
Ongoing Operations
 Gain on Sale of FUWC Stock...............   $65,171,000   $       --        100%
 Water Resource...........................       295,000    1,155,000        (74%)
 Gain on sale of California Mines.........     1,756,000           --        100%
 Deferred gain on Mill Site land sales....        27,000           --        100%
 Income from equity method investment in
  West Valley MRF, LLC....................       257,000      329,000        (22%)
                                             -----------   ----------      -----

  Total ongoing operations................    67,506,000    1,484,000      4,449%
                                             -----------   ----------      -----

Interim Activities (net)
 Lease, service and other.................       (31,000)     (75,000)        59%
                                             -----------   ----------      -----

  Total resource revenues.................   $67,475,000   $1,409,000      4,692%
                                             -----------   ----------      -----
</TABLE>

  Resource Revenues.  Total resource revenues for the first quarter of 2001 were
$67,475,000, compared to $1,409,000 for 2000.  Revenues from ongoing operations
increased 44 fold for the quarter to $67,506,000 from $1,484,000 in 2000, while
the loss from interim activities (net of related expenses) declined 59% to
$31,000 from $75,000 in 2000.

  Ongoing Operations.  During the first quarter of 2001, the Company sold its
investment in FUWC to Cucamonga (to whom the shares were leased under a 102 year
lease) for $87.5 million, resulting in a gain of $65.2 million.  Included in the
net gain of $65.2 million was the payment of $1.0 million to management pursuant
to the Company's Long-Term Transaction Incentive Program.  Water lease revenues
under the Company's 102-year take-or-pay lease with Cucamonga were $295,000
during the first quarter of 2001 compared to $1,155,000 for 2000.  The 74%
decrease in water lease revenues during the quarter reflects the sale of the
Company's investment in its FUWC stock which closed March 6, 2001.

  During the first quarter of 2001, the Company sold its California Mine
properties for $2.0 million, resulting in a gain of $1,756,000.  The Company
also recognized deferred gain of $27,000 from the sales of certain Mill Site
properties in 1997 and 1999.

  Income from equity method investments decreased by $72,000 to $257,000 due to
lower equity income from the WVMRF during the first quarter of 2001 compared to
$329,000 recorded for the same period 2000.

  Interim Activities (net).  Interim activities net of expenses for the first
quarter of 2001 were a net expense of $31,000 compared to a net expense of
$75,000 for the same period in 2000.  The 59% decrease in net interim expense in
2001 is primarily attributable to the termination of interim activities at the
Mill Site Property due to the sale to CCG in August 2000 ($67,000), and lower
net interim

                                       7
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                     KAISER VENTURES INC. AND SUBSIDIARIES

expense at Eagle Mountain ($16,000) being partially offset by lower net
operating revenue at the California Mines which were sold in early February
($37,000).

  Resource Operating Costs.  Resource operating costs are those costs directly
related to the resource revenue.  Total resource operating costs for the first
quarter of 2001 decreased to $42,000 from $173,000 in 2000.  This decrease was
due to a decrease in the lease commission and outside legal costs associated
with the CCWD lease and CCWD lease rate dispute ($130,000) due to the sale of
the Company's investment in its FUWC stock.

  Corporate General and Administrative Expenses.  Corporate general and
administrative expenses for the first quarter of 2001 increased 178% to
$2,349,000 from $843,000 for 2000.  The increase is primarily due to non-cash
variable stock option accounting ($1,155,000), the exercise of nonqualified
stock options ($195,000) and higher professional and outside consulting expenses
($145,000).

  Net Interest Income.  Net interest income for the first quarter of 2001 was
$386,000 compared to $108,000 in 2000.  The change was due primarily to: (a) an
increase in interest income ($263,000) due to higher cash and investment
balances and a decrease in interest expense ($15,000) associated with the
Company's $30,000,000 revolving-to-term credit facility with Union Bank which
was terminated prior to the Company's sale of its FUWC stock (the collateral for
the debt).

  Pre-Tax Loss and Income Tax Provision.  The Company recorded income before
income tax provision of $65,470,000 for the first quarter of 2001, versus
$501,000 recorded in 2000.  An income tax provision of $17,461,000 was recorded
in the first quarter of 2001 compared to $201,000 for 2000.

  Net Income.  For first quarter of 2001, the Company reported a net income of
$48,009,000, or $7.35 per share, versus $300,000, or $.05 per share, reported
for 2000.

                               Financial Position

  Cash, 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 increased $83,138,000 to $93,235,000 at
March 31, 2001 from $10,097,000 at December 31, 2000.  Included in cash and cash
equivalents is $2,899,000 and $3,247,000 held solely for the benefit of MRC at
March 31, 2001 and December 31, 2000, respectively.  The increase in cash and
cash equivalents is primarily due to:  (a) the sale of the Company's FUWC Stock
($81,783,000); (b) the sale of the California Mines for $2.0 million of which
$726,000 was cash at the closing; and (c) the issuance of common stock relating
to the exercise of stock options of $119,000.

  Working Capital.  During the first quarter of 2001, current assets increased
$70.6 million to $94 million, while current liabilities increased $4.1 million
to $8.2 million.  The increase in current assets resulted primarily from the
$83.1 million increase in cash and cash equivalents and a $10.7 million decline
in current deferred tax assets.  The increase in current liabilities resulted
primarily from the recording of $4.4 million income taxes payable and an
increase in accounts payable ($600,000) being partially offset by the payment of
year-end accruals ($1.0 million).  Included in current liabilities as of March
31, 2001 is $701,000 in accounts payable and accrued liabilities relating to
MRC.  As a result, working capital increased during the first quarter of 2001 by
$66.5 million to $85.8 million at March 31, 2001.

                                       8
<PAGE>

                     KAISER VENTURES INC. AND SUBSIDIARIES

  Real Estate.  Real Estate decreased $240,000 during the first quarter of 2001
due to the sale of the Company's California Mine properties.

  Investments.  There was a $257,000 increase in the Company's investment in the
WVMRF during the first quarter of 2001 due to the Company's recording of its
equity share of income during the period.  The $16,612,000 decrease in the
Company's investment in FUWC is due to the sale of that investment during the
first quarter of 2001.

  Other Assets.  The decrease in other assets ($730,000) is primarily related to
the Company's utilization of its long-term deferred tax assets ($2.2 million)
and an increase in accumulated depreciation as of March 31, 2001 ($69,000) being
partially offset by increases in notes receivable due to the sale of the
California Mine Property ($1.0 million long term portion) and capitalized
landfill permitting and development costs incurred by MRC ($500,000).

  Environmental Remediation.  As of March 31, 2001, the Company estimates, based
upon current information, that its future environmental liability related to
certain matters not assumed by CCG Ontario, LLC, a subsidiary of Catellus
Development Corporation, a New York Stock Exchange company CCG in its purchase
of the Mill Site Property (August 2000), including groundwater and other
possible third party claims, would be approximately $4.5 million. Among other
things, the Company remains contingently liable for any impacts the elevated
total dissolved solid groundwater plume may have on previously existing water
wells owned by third parties.

  Long-term Liabilities.  The decrease in other long-term liabilities is
primarily due to a decrease in accrued liabilities and environmental reserves
($133,000) and the recognition of deferred gains on real estate sales ($27,000).

  Minority Interest and Other Liabilities. As of March 31, 2000, the Company has
recorded $5,280,000 of minority interest relating to the approximately 19%
ownership interest in MRC the Company does not own.

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

                                Business Outlook

  The statements contained in this Business Outlook, as well as in the Business
Update, are based upon current operations and expectations.  In addition to the
forward-looking statements and information contained elsewhere in this 10-Q
Report, these statements are forward-looking and, therefore, actual results may
differ materially.

  Ongoing Operations.  As noted above, the Company's revenues from ongoing
operations have, in the past, been generally derived from the development of the
Company's major long-term projects and investments.  The development of a number
of these projects and investments, such as the 102-year take-or-pay lease with
Cucamonga, and the 50% equity ownership of the West Valley MRF, are essentially
complete and the Company has been recognizing significant revenues and income
from these investments.  However, the revenues from ongoing operations will be
significantly reduced in 2001 as a result of the Company completing the sale of
its ownership interest in FUWC to Cucamonga. In addition, the Company continues
to evaluate its remaining assets and investments in light of how to best provide
maximum value to its stockholders.

                                       9
<PAGE>

                     KAISER VENTURES INC. AND SUBSIDIARIES

  In regard to the West Valley MRF, the most significant factor affecting the
Company's future equity income from the West Valley MRF is the expansion of the
facility's capacity from 2,000 to 3,500 tons per day.  This expansion, which
will cost approximately $10 million and is anticipated to be completed and in
operation in early 2001, will increase the processing facility by an additional
80,000 square feet and will provide for additional materials recovery sorting
capacity.  The ultimate success of this expansion will continue to depend on the
ability of the West Valley MRF to attract new customers and waste volumes from
the closure of local landfills such as the Spadra Landfill, which closed in
April 2000, and on the future construction of any competing facilities.

  Pending Sale of Eagle Mountain Landfill Project.  Effective August 9, 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
County Sanitation District No. 2 of Los Angeles County (the "District").  In
summary, the Landfill Project (which includes the Company's royalty payments
under the MRC Lease) is being sold for $41 million with an initial closing
currently anticipated to occur by the end of August 2001, and assuming the
transaction actually closes.  However, payment of the purchase price will be
delayed as described in more detail below.  Interest began to accrue on $39
million of the purchase price effective May 3, 2001.  The sale of the Landfill
Project is subject to the results of the District's due diligence and
satisfaction of numerous contingencies.  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.

  Upon closing, $39 million of the total purchase price will be deposited into
an escrow account and will be released when litigation contingencies are fully
resolved. The litigation contingencies are the federal litigation over the
completed federal land exchange. Interest will accrue on this portion of the
purchase price and interest will be paid out to Mine Reclamation, LLC on a
quarterly basis beginning with a successful outcome of the federal litigation at
the Federal District Court level. The remaining $2 million of the purchase price
will also be placed into an escrow account upon closing and will be released
upon the later of (i) the release of the $39 million as described above, or (2)
the permitting approval of the District's Puente Hills landfill for its
remaining 10 years of capacity. Receipt of the purchase price, in whole or in
part, if at all, could be delayed for a substantial period of time pending
satisfactory resolution of these contingencies.

  The District has been undertaking significant due diligence on the Landfill
Project and has the right to terminate the Landfill Purchase Agreement if it is
not satisfied with the results of its due diligence.  Due diligence is
continuing with respect to certain title matters and the parties are negotiating
various ancillary agreements.  In addition, a recently announced decision in an
unrelated case does have the potential of having a material adverse impact on
the Landfill Project and its pending sale.  For additional information see "Part
I, Item 1.  BUSINESS - Waste Management - Eagle Mountain Landfill Project -
Landfill Project Litigation."

  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.
This parcel's environmental contamination is to be remediated by CCG Ontario,
LLC.  CCG Ontario, LLC purchased approximately 588 acres of the mill site
property from the Company in August 2000 and assumed substantially all of the
Company's environmental liabilities associated with the property it purchased
and it also assumed certain other environmental liabilities and risks associated
with the former Kaiser Steel Corporation mill site.

                                       10
<PAGE>

                     KAISER VENTURES INC. AND SUBSIDIARIES

  Sale of Miscellaneous Properties.  The Company, on February 1, 2001, completed
its sale of its Silver Lake Mine property, several other mining claims and
properties and a 190 acre parcel near Afton Canyon, California.  The gross sales
price was $2 million with $700,000 to be received as a down payment and the
balance is to be represented by buyer's secured promissory note.  The note is
payable over five years and accrues interest at the rate of 8% per annum.

Cash Maximization Strategy

  The Company has been developing the assets it received out of the Kaiser Steel
Corporation bankruptcy and then selling them at such time as the Company
believes that it can achieve maximum stockholder value for a particular project
or asset. During 2000, the Company:  (i) sold the balance of all of the
Company's real estate at the former Kaiser Steel Corporation mill site near
Fontana, California, except for an approximate five acre parcel; (ii) entered
into an agreement to sell the Landfill Project to the District, with the Company
and the District working toward a closing on such transaction; (iii) entered
into an agreement for the Company's interest in FUWC to Cucamonga which
transaction was completed on March 6, 2001; and (iv) paid a $2.00 cash
distribution to its stockholders.

  As a result of the items outlined above, the Company has been evaluating and
continues to evaluate its future strategy and business plan, as well as the
timing and alternative means of making its excess cash available to
stockholders.  The alternatives being considered by the Company's Board of
Directors include, but are not limited to, a plan of reorganization or
dissolution, dividends, stock repurchases, a reformulation of the Company into a
different business form, one or more mergers, a sale of the Company, and/or
other similar transactions.  In evaluating any alternative, the Board is
considering and will consider, among other factors:  (i) the Company's current
and anticipated future contingent liabilities and cash needs; (ii) tax planning
opportunities and their timing, with the goal of reasonably minimizing taxes
paid by the Company and its stockholders; (iii) the anticipated timing of
achieving maximum value for the Company's remaining assets which may be several
years in the future; (iv) expenses, including general administrative and ongoing
expenses, related to any particular alternative; (v) the legal and other risks
that may be associated with any particular alternative; (vi) the timing of
initiating and completing any particular alternative; and (vii) the possible
impacts of any particular alternative may have on the trading in the Company's
stock.  The foregoing listing of factors is not intended to list every point
that is or will be considered by the Company and its Board of Directors.  During
the first quarter, the Board of Directors continued its evaluation of various
alternatives.  It is currently anticipated that the Company's Board of Directors
will make a final determination on the appropriate alternative or series of
alternatives by the end of the second quarter of 2001.

  Corporate Overhead.  As future transactions are completed, the Company intends
to further reduce its corporate staffing and overhead to reflect the reduced
requirements of its remaining operations and projects.

  Capital Resources.  The Company expects that its current cash balances and
short-term investments together with:  (a) cash provided from operating
activities; and (b) reserves set aside from the Company's sale of its investment
in FUWC will be sufficient to satisfy the Company's operating cash requirements.

  Improved Cash Flow from Use of Net Operating Loss Tax Carryforwards.  Due to
the Company's status as successor to KSC for tax purposes and its use of KSC-
related NOLs, income taxes actually

                                       11
<PAGE>

                     KAISER VENTURES INC. AND SUBSIDIARIES

paid by the Company are substantially less than the income tax provision
reported in its financial statements. The tax benefit associated with the
utilization of NOLs, if any, has historically been reflected as an increase to
stockholders' equity rather than as an increase to net income. The Company
expects that its use of these NOLs will substantially reduce the cash paid for
income taxes until these NOLs are fully utilized. The total NOLs as of December
31, 2000, are estimated to be approximately $43 million for federal purposes and
$1 million for state purposes. Due to the sale of the FUWC stock in March, the
Company anticipates utilizing all of these NOLs in the current year. These
federal NOLs expire in varying amounts over a period from year 2006 to 2013. In
addition, the Company expects that the closing of the sale of MRC to the Los
Angeles Sanitation District will result in a taxable loss in the range of $15-
$20 million. Such a loss would increase the Company's federal NOLs by the amount
of the loss and create a state NOL equal to 55% of the loss.

  If within a three-year period, 50% or more of the stock of the Company changes
ownership, the future annual use of NOLs may be limited.  The annual limitation
would be calculated as the product of:  (i) the highest long-term tax-exempt
rate for a designated period prior to the ownership change; and (ii) the market
value of the Company at such time.


Item 2.  FINANCIAL STATEMENTS



               (Remainder of this Page Intentionally Left Blank)


                                       12
<PAGE>

                     KAISER VENTURES INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                                     as of



<TABLE>
<CAPTION>
                                                           March 31,     December 31,
                                                             2001            2000
                                                         ------------    ------------
                                                          (Unaudited)
<S>                                                      <C>             <C>

ASSETS

Current Assets
   Cash and cash equivalents...........................  $ 93,235,000    $10,097,000
   Accounts receivable and other, net of allowance for
    doubtful accounts of $83,000.......................       487,000      2,497,000
   Deferred tax assets.................................           ---     10,699,000
   Note receivable.....................................       323,000        107,000
                                                         ------------    -----------

                                                           94,045,000     23,400,000
                                                         ------------    -----------

Investment in Fontana Union Water Company..............           ---     16,612,000
                                                         ------------    -----------

Investment in West Valley MRF..........................     3,917,000      3,660,000
                                                         ------------    -----------

Real Estate
   Land and improvements...............................     8,303,000      8,543,000
                                                         ------------    -----------

Other Assets
   Note Receivable.....................................     1,603,000        589,000
   Deferred tax assets.................................           ---      2,161,000
   Landfill permitting and development.................    18,839,000     18,354,000
   Buildings and equipment (net).......................     1,401,000      1,463,000
   Other assets........................................           ---          6,000
                                                         ------------    -----------

                                                           21,843,000     22,573,000
                                                         ------------    -----------

Total Assets...........................................  $128,108,000    $74,788,000
                                                         ============    ===========
</TABLE>

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

                                       13
<PAGE>

                     KAISER VENTURES INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                                     as of



<TABLE>
<CAPTION>
                                                            March 31,     December 31,
                                                              2001            2000
                                                          ------------    ------------
                                                           (Unaudited)
<S>                                                       <C>             <C>
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
   Accounts payable....................................   $    901,000    $   302,000
   Income taxes payable................................      4,379,000            ---
   Accrued liabilities.................................      2,885,000      3,824,000
                                                          ------------    -----------

                                                             8,165,000      4,126,000
                                                          ------------    -----------

Long-term Liabilities
   Deferred gain on sale of real estate................        669,000        696,000
   Accrued liabilities.................................        598,000        722,000
   Environmental remediation...........................      4,481,000      4,490,000
                                                          ------------    -----------

                                                             5,748,000      5,908,000
                                                          ------------    -----------

Total Liabilities......................................     13,913,000     10,034,000
                                                          ------------    -----------

Minority Interest......................................      5,280,000      5,280,000
                                                          ------------    -----------

Commitments and Contingencies

Stockholders' Equity
   Common stock, par value $.03 per share, authorized
    13,333,333 shares; issued and outstanding
    6,552,100 and 6,522,700 respectively...............        196,000        195,000
   Capital in excess of par value......................     53,107,000     51,676,000
   Retained earnings...................................     55,612,000      7,603,000
                                                          ------------    -----------

Total Stockholders' Equity.............................    108,915,000     59,474,000
                                                          ------------    -----------

Total Liabilities and Stockholders' Equity.............   $128,108,000    $74,788,000
                                                          ============    ===========
</TABLE>

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

                                       14
<PAGE>

                     KAISER VENTURES INC. AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF INCOME
                      for the Three Months Ended March 31
                                  (Unaudited)


<TABLE>
<CAPTION>
                                                               2001          2000
                                                           -----------    ----------
<S>                                                        <C>            <C>
Resource Revenues
 Ongoing Operations
  Gain on sale of FUWC..................................   $65,171,000    $      ---
  Water resource........................................       295,000     1,155,000
  Gain on Sale of California Mines......................     1,756,000           ---
  Deferred gain on Mill Site land sales.................        27,000           ---
  Income (loss) from equity method investment in the
   West Valley MRF, LLC.................................       257,000       329,000
                                                           -----------    ----------

     Total ongoing operations...........................    67,506,000     1,484,000
                                                           -----------    ----------

 Interim Activities Net Loss............................       (31,000)      (75,000)
                                                           -----------    ----------

     Total resource revenues............................    67,475,000     1,409,000
                                                           -----------    ----------

Resource Operating Costs................................        42,000       173,000
                                                           -----------    ----------

Income from Resources...................................    67,433,000     1,236,000

Corporate General and Administrative Expenses
 Corporate overhead expenses, excluding stock based
  compensation and stock option repricing expenses......       999,000       843,000
 Stock based compensation expense.......................       195,000           ---
 Stock option repricing expense.........................     1,155,000           ---
                                                           -----------    ----------

                                                             2,349,000       843,000
                                                           -----------    ----------

Income from Operations..................................    65,084,000       393,000

Net interest income.....................................      (386,000)     (108,000)
                                                           -----------    ----------

Income before Income Tax Provision......................    65,470,000       501,000

Income tax provision....................................    17,461,000       201,000
                                                           -----------    ----------

Net Income..............................................   $48,009,000    $  300,000
                                                           ===========    ==========

Basic Income Per Share..................................   $      7.35    $      .05
                                                           ===========    ==========

Diluted Income Per Share................................   $      7.26    $      .04
                                                           ===========    ==========

Basic Weighted Average Number of Shares Outstanding.....     6,535,000     6,346,000

Diluted Weighted Average Number of Shares Outstanding...     6,612,000     6,747,000
</TABLE>


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


                                       15
<PAGE>

                     KAISER VENTURES INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                      for the Three Months Ended March 31
                                  (Unaudited)


<TABLE>
<CAPTION>
                                                         2001            2000
                                                     ------------    -----------
<S>                                                  <C>             <C>
Cash Flows from Operating Activities
 Net income.......................................   $ 48,009,000    $   300,000
 (Income) from equity method investments..........       (257,000)      (329,000)
 Gain on sale of FUWC Stock.......................    (65,171,000)           ---
 Gain on sale of California Mines.................     (1,756,000)           ---
 Deferred tax expense.............................     12,860,000            ---
 Stock based compensation expense.................        159,000            ---
 Stock option repricing...........................      1,155,000            ---
 Depreciation and amortization....................         69,000        127,000
 Allowance for doubtful accounts..................            ---         (7,000)
 Mill Site deferred gain realized.................        (27,000)           ---
 Changes in assets:
   Receivables and other..........................      2,010,000        637,000
 Changes in liabilities:
   Current liabilities............................       (461,000)      (851,000)
   Income taxes payable...........................      4,379,000     (3,501,000)
   Long-term accrued liabilities..................       (124,000)       (92,000)
                                                     ------------    -----------

 Net cash flows from operating activities.........        845,000     (3,716,000)
                                                     ------------    -----------

Cash Flows from Investing Activities
 Proceeds from the sale of FUWC Stock.............     81,783,000            ---
 Proceeds from the sale of the California Mines...        726,000            ---
 Minority interest and other liabilities..........            ---        416,000
 Note receivable collections......................         39,000         27,000
 Investment in Fontana Union Water Co.............            ---       (654,000)
 Capital expenditures.............................       (365,000)    (1,150,000)
 Environmental remediation expenditures...........         (9,000)      (249,000)
                                                     ------------    -----------

 Net cash flows from investing activities.........     82,174,000     (1,610,000)
                                                     ------------    -----------

Cash Flows from Financing Activities
 Issuance of common stock.........................        119,000        455,000
                                                     ------------    -----------

 Net cash flows from financing activities.........        119,000        455,000
                                                     ------------    -----------

Net Changes in Cash and Cash Equivalents..........     83,138,000     (4,871,000)

Cash and Cash Equivalents at Beginning of Year....     10,097,000     14,686,000
                                                     ------------    -----------

Cash and Cash Equivalents at End of Quarter.......   $ 93,235,000    $ 9,815,000
                                                     ============    ===========
</TABLE>

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

                                       16
<PAGE>

                     KAISER VENTURES INC. AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                   for the Three Months Ended March 31, 2001
                                  (Unaudited)

<TABLE>
<CAPTION>
                                       Common Stock          Capital In
                                  ----------------------     Excess of      Retained
                                   Shares       Amount       Par Value      Earnings         Total
                                  --------------------------------------------------------------------
<S>                               <C>          <C>          <C>            <C>            <C>
Balance at December 31, 2000      6,522,700    $195,000     $51,676,000    $ 7,603,000    $ 59,474,000

   Issuance of shares of
       Common stock..........        29,387       1,000       1,431,000            ---       1,432,000

   Net Income................           ---         ---             ---     48,009,000      48,009,000
                                  ---------    --------     -----------    -----------    ------------

Balance at March 31, 2001         6,552,087    $196,000     $53,107,000    $55,612,000    $108,915,000
                                  =========    ========     ===========    ===========    ============
</TABLE>

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

                                       17
<PAGE>

                     KAISER VENTURES INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

Note 1.  BASIS OF PRESENTATION

  The unaudited, consolidated financial statements as of March 31, 2001 and for
the three month periods ended March 31, 2001 and 2000, as well as related notes,
should be read in conjunction with the audited consolidated financial statements
and related notes as of and for the year ended December 31, 2000.  In the
opinion of management, the accompanying unaudited financial statements contain
all adjustments necessary (all of which are normal and/or recurring in nature)
to present fairly the Company's financial position at March 31, 2001, and
results of operations and cash flows for the three month periods ended March 31,
2001 and 2000.

Reclassification

  Certain amounts in the prior year have been reclassified to conform to the
current year financial statement presentation.

Note 2.  CUCAMONGA LEASE

  Effective March 6, 2001, the Company completed the sale of its approximately
53.71% ownership interest in the capital stock of Fontana Union Water Company
("FUWC") a mutual water company, to Cucamonga for $87.5 million.  Included in
the net gain of $65.2 million was the payment of $1.0 million to management
pursuant to the Company's Long-Term Transaction Incentive Program.  In addition,
the Company received approximately $2.5 million in payments under the lease of
FUWC shares to Cucamonga.  Stockholder approval for the sale was obtained.  With
the sale of the FUWC interest, the lease with Cucamonga was effectively
terminated and the rate dispute litigation between the Company and Cucamonga was
settled.

  In connection with the sale of the Company's ownership interest in Fontana
Union, the Company terminated its $30 million credit facility with Union Bank
that was secured by Fontana Union stock and the Cucamonga Lease.


Note 3.  SUPPLEMENTAL CASH FLOW INFORMATION

  During the three months ended March 31, 2001, the Company sold its California
Mine Property to $2 million, $700,000 down and $1.3 million on a note receivable
secured by the real estate.

  During the three months ended March 31, 2001 the Company had 44,833 stock
options exercised on a net basis.  These transactions resulted in the Company
receiving 30,146 shares of its own common stock as payment for the purchase
price of the options and for the payment of income taxes.

                                       18
<PAGE>

                     KAISER VENTURES INC. AND SUBSIDIARIES

Note 4.  COMMITMENTS AND CONTINGENCIES

  Environmental Contingencies.  As of March 31, 2001, the Company estimates,
based upon current information, that its future environmental liability related
to certain matters not assumed by CCG Ontario, LLC in its purchase of the mill
site property, including groundwater and other possible third party claims,
would be approximately $4.5 million.  The Company remains contingently liable
for any impacts the elevated total dissolved solid groundwater plume may have on
water wells owned by third parties.


                                    PART II

Item 1.  LEGAL PROCEEDINGS

  As discussed in the Company's Form 10-K Report for 2000, the Company is
engaged in certain claims and litigation.  Except as noted below, there were no
material developments in any legal proceeding in the first quarter.

  Cucamonga Rate Litigation.  With the completion of the sale of the Company's
interest in FUWC to Cucamonga on March 6, 2001, the rate dispute litigation
between the Company and Cucamonga was settled.


Item 2.  CHANGES IN SECURITIES

  Not applicable


Item 3.  DEFAULTS UPON SENIOR SECURITIES

  Not applicable.


Item 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

  The Company solicited written consents of its stockholders with respect to
approving the sale of all the Company's stock in Fontana Union for $87.5 million
to Cucamonga.  The consent solicitation was made pursuant to that certain Notice
of Consent Solicitation dated January 5, 2001, and the Company's Consent
Solicitation Statement dated January 5, 2001.  There were a total of 6,385,781
shares, issued, outstanding and entitled to vote as of December 28, 2000, the
stockholder record date.  The Company extended the time by which consents were
to be returned from January 26, 2001, to February 7, 2001.  Accordingly, the
Fontana Union Stock Sale to Cucamonga was approved.  The final tally of the
written consents was as follows:  FOR - 4,550,421; AGAINST - 16,234; ABSTAIN -
3,986.


Item 5.  OTHER INFORMATION

  None.

                                       19
<PAGE>

                     KAISER VENTURES INC. AND SUBSIDIARIES

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

      A.  Exhibits
          --------

      Exhibit 10.1 - Letter Agreement dated April 5, 2001, between Mine
      Reclamation, LLC, and Los Angeles Sanitation District No. 2

      B.  Reports on Form 8-K.
          --------------------

      On March 20, 2001, the Company filed an 8-K Report with the Securities and
      Commission Exchange regarding the sale of all of its ownership interest in
      Fontana Union Water Company to Cucamonga for $87.5 million on March 6,
      2001.



               (Remainder of this Page Intentionally Left Blank)

                                       20
<PAGE>

                     KAISER VENTURES INC. 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.

                                         KAISER VENTURES INC.


Dated:  May 11, 2001                     /s/ James F. Verhey
                                         --------------------------------
                                         James F. Verhey
                                         Principal Financial Officer

                                       21