Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — BMO Capital Markets 2011 Global Metals & Mining Conference
19 slides from Fortescue's conference presentation, Mar 2, 2011
Slide 1: The BMO Capital Markets 2011 Global Metals & Mining Conference
For personal use only The BMO Capital Markets 2011 Global Metals & Mining Conference 1 March 2011 Disclaimer Important Notice The purpose of this presentation is to provide general information about Fortescue Metals Group Ltd ("Fortescue"). It is not recommended that any person makes any investment
Slide 2: Integrated Business ~ 100mt shipped
Integrated Business ~ 100mt shipped For personal use only Ownership of infrastructure is the key Growth story without parallel Innovation at all levels • Fastest ramp up of any Pilbara mine • Surface miners optimise grade control • Largest ore processing plant in the Pilbara • Fastest Heaviest haul
Slide 3: Fortescue has a dominant Pilbara land position
Fortescue – forging ahead For personal use only Fortescue has a dominant Pilbara land position Fortescue: >85,000km2 Rio: 14,230km2 BHP: 8,195km2 6
Slide 4: Reserves and Resources
Reserves and Resources For personal use only (Mt) Reserves Resources Proved Probable Total Measured Indicated Inferred Total Cloudbreak / 98 1 441 1,441 1 540 1,540 167 1 588 1,588 389 2 143 2,143 Christmas Creek Chichester Other -- -- -- -- 222 473 695 Nyidinghu -- -- -- -- -- 1,032 1,032 Solomon S
Slide 5: Proven project development skills - records
Proven project development skills - records For personal use only From concept To reality Christmas Mining Creek 2010 Minesite 2011 Solomon Mining Minesite 2011 2013 Nyidinghu Mining g Mi Minesite it 2011 2013 FACT: Fortescue built its infrastructure faster than any other Australian mining company F
Slide 6: Forging Ahead: Operations & Finance
Forging Ahead For personal use only Operations & Finance Recent milestones • Record half earnings - $1.3bn EBITDA • Refinance of original $2bn bonds plus $1 5bn of expansion funding $1.5bn • 100mtpa $8.4bn expansion tracking budget and schedule • First ore on ship for three customers, with a further
Slide 7: Operational outperformance
Operational outperformance For personal use only Mining Rail Port Ore Processed (Mt) Ore Railed (Mt) Ore Shipped (Mt) 25 25 25 20 20 20 15 15 15 10 10 10 5 5 5 0 0 0 2H08 1H09 2H09 1H10 2H10 1H11 2H08 1H09 2H09 1H10 2H10 1H11 2H08 1H09 2H09 1H10 2H10 1H11 3rd Party Ore FMG Ore 1H 2011 Highlights • R
Slide 8: Strengthening financial position
Strengthening financial position For personal use only • Strong earnings deliver period Cash on Hand (US$m) on period growth in cash flow $2,382 • Improvement in credit metrics $1,236 and balance sheet strength $655 • Measured approach to expansion funding FY09 FY10 CY10 EBITDA Interest Coverage x D
Slide 9: Marketing – index pricing transition
Forging Ahead For personal use only The Market Marketing – index pricing transition Benchmark regime - FOB Index pricing - CFR 160 150 140 130 120 Average CFR selling price per dry tonne 125 US$ per dry tonne 100 Average C1 costs per dry tonne 80 83 72 69 70 60 66 40 20 0 Mar-09 Jun-09 Sep-09 Dec-09
Slide 10: Fortescue product overview
Fortescue product overview • High value in use due to fast sintering and high calcined Fe For personal use only • Can be used in large percent of customer blends - used at 20-45% level in many Chinese customer sinter blends (vs. 12% for other similar fines) • 64.5% Fe calcined – competitive with Bra
Slide 11: Rocket Fines has favourable coarse size
Rocket Fines has favourable coarse size Fine Ore Size - % >1.0 mm For personal use only 70.0% 60.0% 50.0% % Retained 40.0% BHPBIO - Premium ndicoogina 30.0% bara Blend cket Fines BHPBIO - Yandi BHPBIO arajas 20.0% FSC FCJ JF HG Indian n Rio - Yan Vale - Ca FMG Roc Vale - SF Rio - Pilb Vale - PF Vale
Slide 12: Capturing the opportunity
Capturing the opportunity For personal use only • Project pipeline positioned for growth: • Short term: Chichester 55mtpa on schedule for March Qtr 2011 commissioning • Medium term: Port and Rail expansion underway and Solomon advancing rapidly • Long term: Remaining Solomon and Anketell Port approv
Slide 13: Nyidinghu - new billion tonne discovery
Three Hubs - Two Ports expansion strategy Nyidinghu - new 1 billion tonne discovery For personal use only Nyidinghu Inferred Mineral Resource Host Tonnes (mt) Fe % SiO2 % Al2O3 % P% LOI % Stratigraphy BID Dales Gorge 354 59.1 4.30 2.38 0.164 8.01 BID Whaleback 235 56.3 5.45 4.29 0.169 8.73 BID Joffr
Slide 14: The Path to 155Mtpa
The Path to 155Mtpa For personal use only Outloader Solomon Production Solomon CID avail Dec. CC1 add’l at Capacity screen OPF’s Comp. Outload BID / DID / Solomon Brockman Circuit CID Limited to BCI JV 55Mtpa Solomon Rail Chichester BCI inc Production Prod to arrives at Capacity 3mtpa CC2 Start up O
Slide 15: Designed for future expansion
Designed for future expansion For personal use only BHP Fortescue Cloudbreak – medium term mine plan PORT HEDLAND (256 km) Fortescue Dave Forrest Aerodrome Cloudbreak rail line Cloudbreak Village Train Loader Ore Processing Facility (OPF) Site Offices BRAMPTON LINDERMAN Christmas Creek rail line HAM
Slide 16: Christmas Creek – medium term mine plan
For personal use only Christmas Creek – medium term mine plan Christmas Creek Village VASSE MOKARE FLINDERS BAUDIN WINDICH EYRE Christmas Creek rail line Ore Processing Facility (OPF) PORT HEDLAND (291km) CLOUDBREAK (35km) Rail loop Forging Ahead
Slide 17: Short to medium term catalysts
For personal use only Short to medium term catalysts • Delivery of the 55mpta ramp up • Solomon and Western Hub resource statements • Continuing project approvals & contract commitments • Major new discoveries • Supply lag, pricing strength Value proposition – stronger for longer? 150Mtpa run rate b
Slide 18: Value proposition – stronger for longer?
Value proposition – stronger for longer? 350Mtpa run rate by 2020 For personal use only 350 350 300 300 250 Value Growth 250 Opportunity 350Mtpa 200 Value Growth 200 Sales in Opportunity Spot Price tonnes US$/dmt 150 150 100 Consensus – 100 150Mpa 50 Consensus Value 50 0 0 2009 2010 2011 2012 2013 2
Slide 19: Sign up to alerts online
For personal use only Sign up to alerts online www.fmgl.com.au
Fortescue Metals Group — BMO Capital Markets 2011 Global Metals & Mining Conference on 6ix