Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — Corporate Update (June 2008)
42 slides from Fortescue's corporate update, Jun 20, 2008
Slide 1: Fortescue Metals Group Site Trip - 20 June 2008
Fortescue Metals Group For personal use only Site Trip - 20 June 2008 Fortescue Metals Group Ltd 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 d
Slide 2: Executive Summary: Multi-decade market growth drives strategy
Wearing the Fortescue Colours For personal use only 3 Executive Summary Multi-decade market growth drives strategy • Permanent growth in China, India and Asia drives FMG strategy • FMG has major reserves and resources with very strong exploration upside • World class production assets commencing in
Slide 3: Executive Summary: Emerging Iron Ore Major
Executive Summary For personal use only Emerging Iron Ore Major • Construction on time and on budget with very strong team still in place • Production underway – 55mtpa platform nearly complete • Near term opportunities for expansion • Project pipeline Fortescue’s raw material role in developing wor
Slide 4: The growth engines of Asia need the Pilbara
History remains the best guide to the future For personal use only The growth engines of Asia need the Pilbara • No iron ore major has the expansion leverage of Fortescue • Australia is the most competitive supplier to Asia Sovereign Risk Location • Three companies globally set price and dominate th
Slide 5: Iron Ore Cash Costs for 2009
For personal use only • US$/dry tonne in real terms 0 10 20 30 40 50 60 70 80 90 0 Kumba Iron Ore non-Agglomerated CSN non-Agglomerated Fuel 100 Labour Royalty Supplies Electricity Transport Port Loading Maintenance CVRD non-Agglomerated 200 300 Fortescue Metals non-Agglomerated y 400 Iron Ore Cash
Slide 6: Marketing – Sold Out
Marketing – Sold Out For personal use only • Base Production Target – “Sold Out” • First Stage Expansion to 100 Mtpa already committed • Long Term Relationships with Key Chinese Mills • Technical Focus on Product Performance Traits • Chemical and physical properties of product well tested and unders
Slide 7: Construction Milestones
Construction Milestones For personal use only Executed by a joint venture with Fortescue Metals Group and WorleyParsons called Team 45 FMG capital raised, or raised and repaid. • <A$4billion Total man-hours worked to date • >9 million Total man-hours lost due to industrial disputation • <1,700 hrs T
Slide 8: Construction Milestones
Construction Milestones For personal use only Orders placed with suppliers • 4,500 Largest Contract • McConnell Dowell at $181m Smallest Contract • $5,000 (sub contractor on Safety) Total number of Contracts • 332 Number of individual project control documents • >260,000 Projects that made Fortescue
Slide 9: Fortescue growth strategy (since 2004)
Fortescue growth strategy (since 2004) For personal use only Open Access Infrastructure • Initially built to support Chichester Range Project • Easy expansion options Production Strategy • Underway - 55mtpa; First ore on ship on time, on budget – May 2008 • Next steps – up to 200 million tonnes per
Slide 10: Geology
Geology For personal use only Eamon Hannon Head of Exploration BHPB Hamersley Group Stratigraphy – Regional reference section Mt Whaleback Macroband Lateral Continuity Type outcrop – Wittenoom Gorge Hamersley Iron Brockman 2 reference section Tom Price km 190 50km 75km 17 0k 4W Gorge Ophthalmia Rang
Slide 11: Hamersley Group Stratigraphy – Regional
Hamersley Group Stratigraphy – Regional For personal use only A B C Microband Lateral Continuity • A to B – 10m apart (adjacent holes at 5 cm Wittenoom Gorge) • B to C – 130 km apart (Wittenoom to Paraburdoo) (Ewers and Morris 1981) Channel Iron Deposits
Slide 12: Geology of the Chichester Range
Geology of the Chichester Range For personal use only THE REWARD EXTRA TONNES OF MARTITE - GOETHITE ORE AND THE DISCOVERY OF MICROPLATY HEMATITE ORE DK Exploration due diligence SUMMARY WE KNOW WHAT WE ARE DOING! • FMG has used Industry Best-practice Quality Control and Assurance practices to ensure
Slide 13: Near and mid term opportunities underpinned by geology
Near and mid term opportunities underpinned by geology For personal use only • The largest bedrock hosted iron ore discovery in Australia • Ore reserves of 1.1 Bt, resources and reserves (Chichester only) 2.5 Bt • New exploration (Chichester only) 1.8 Bt – target only • Total reserves, resources and
Slide 14: FMG Pilbara resources and targets to underpin the project pipeline
FMG Pilbara resources and targets to underpin the project pipeline For personal use only Current Current Further Total Area Resources Targets Potential Upside Chichester Range 2.46 1.8 1 5.26 Solomon 1.7 2 2 5.7 Jeerinah Anticline 1 1.5 2.5 Western CID 1 1 2 Southern Pilbara 0.5 0.5 1 Eastern Pilbar
Slide 15: Comparison of Rocket with Competitor Fines
Comparison of Rocket with Competitor Fines For personal use only Uncalcined (Wt %) Calcined (Wt %) LOI SiO2+ SiO2 Al2O3 P Mn Brand Fe Total Fe SiO2 Al2O3 P Mn Al2O3 Rio - Mesa J 57.04 5.69 2.69 0.040 0.08 9.17 62.80 6.26 2.96 0.044 0.09 9.23 BHPB - Yandi 58.50 5.10 1.34 0.037 0.03 8.40 64.70 5.65 1.
Slide 16: Product Quality Control Between Mine and Ship
Product Quality Control Between Mine and Ship For personal use only FMG’s Pit to Customer Philosophy It’s not all just about iron grade (Fe)! Quality Control Stages from Pit to Customer: 1. RC grade control drilling and geology provides initial estimate of plant feed 2. Plant feed blended from 4 pit
Slide 17: Mining
Mining For personal use only Surface Miners at work
Slide 18: Cloudbreak mine conveyor and screening plant
Ore on Cloudbreak mine conveyor from Surface Miner shuttle dump point For personal use only Screening plant ramping up
Slide 19: Crushing plant ramping up
Crushing plant ramping up For personal use only Cloudbreak - OPF
Slide 20: Cloudbreak – Scalper Screens
Cloudbreak – Scalper Screens – AI32 For personal use only Train Loader commencing operations
Slide 21: Cloudbreak – Loading Trains; Mine Plan Snap Shots
Cloudbreak – Loading Trains For personal use only Mine Plan – Snap Shots • December 2008 • June 2009 • December 2009 June 2008 THE NEW FORCE IN IRON ORE
Slide 22: Mine plan snapshot
For personal use only June 2008 THE NEW FORCE IN IRON ORE June 2008 THE NEW FORCE IN IRON ORE
Slide 23: Mine plan snapshot
For personal use only June 2008 THE NEW FORCE IN IRON ORE
Slide 24: Mine plan snapshot
For personal use only June 2008 THE NEW FORCE IN IRON ORE
Slide 25: TTMS Tandem Move
TTMS Tandem Move For personal use only The story only gets better Test 1 The past v the present • K19 after pick failure • WSM22 pick after K19 pick failure Test 2 The present v the future • WSM22 after pick failure • FMG pick after WSM22 pick failure
Slide 26: Main Issues
Main Issues For personal use only • Wirtgen Surface Miners – New Contract with Chinese Supplier 120,000ppa. – $20US/Pick Vs $26/Pick Other Chinese Vs $45/Pick German – Wirtgen SM4200, Arrives in March 2009 • Dozer Push – Up to 14 X D11 Machines – $0.92/BCM up to $2.0/BCM • Overburden Mobile Conveyin
Slide 27: FY09 Mining Production
FY09 Mining Production - Overburden For personal use only Waste Mined (BCM's) 7,000,000 70,000,000 6,000,000 60,000,000 5,000,000 50,000,000 Cum. BCM's 4,000,000 40,000,000 BCM's 3,000,000 30,000,000 2,000,000 20,000,000 1,000,000 10,000,000 0 0 Aug-08 Apr-09 Jul-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-0
Slide 28: Cloudbreak Christmas Creek Mine Life of Mine Plan
For personal use only Cloudbreak Christmas Creek Mine Life of Mine Plan for 10Years – each colour represents one years operation – based June 2008 on current information THE NEW FORCE IN IRON ORE The Three Delivery Systems – Mine, Port & Rail
Slide 29: Mine construction and operations
For personal use only Mine construction and operations Fortescue has Australia’s leading iron ore and infrastructure construction team From Concept To Reality Fortescue Mine Site - 2007 Fortescue Mine Site - 2008
Slide 30: Cloudbreak Village
Cloudbreak Village – a new standard in Pilbara accommodation For personal use only Pilbara’s longest corporate airfield
Slide 31: Delivery System: Rail construction and operations
For personal use only Delivery System: Rail construction and operations Fortescue’s operations team is proven From Concept To Reality Fortescue Rail Site - 2007 Fortescue Rail Site - 2008
Slide 32: The world’s heaviest haul rail system
The world’s heaviest haul rail system For personal use only State of the art rail operations Target - Lowest cost transport in the Pilbara Rail • Clean sheet design captures best of existing technology and takes it to the next step: – Bigger carrying capacity – Electronic braking system – Aerodynami
Slide 33: Railway includes major bridges
Railway includes 8 major bridges For personal use only And the BHPB bridge 17 October 2007 3 March 2008
Slide 34: Famous last words….
For personal use only Famous last words…. “I’m happy to be chained to the tracks somewhere between Cloud Break and Port Hedland in May next year because I know that I will not be killed by a train.” Fund Manager (Name withheld), 2007 First Ore on Train – 8 April 2008
Slide 35: Delivery system: Port construction and operations
For personal use only Delivery system: Port construction and operations Port and loading systems From Concept To Reality Fortescue Port Site - 2006 Fortescue Herb Elliott Port - 2008
Slide 36: The Myth….. The Reality…..
The Myth….. For personal use only The Reality…..
Slide 37: Port Operations
Port Operations For personal use only State of the art port operations Target - Lowest cost transport in the Pilbara Port • Significant expansion area • Highly automated • Extensive use of conveyors • Largest shiploaders in Australia
Slide 38: Train unloader operating at design
Train unloader operating at design For personal use only Reclaimer, commissioned
Slide 39: Stacker stockpiling at Port
Stacker stockpiling at Port For personal use only Stacker & Reclaimer – commissioned
Slide 40: First Ore On Ship – May 2008
First Ore On Ship – 15 May 2008 For personal use only Premier Alan Carpenter lends a hand loading…
Slide 41: First commercial shipment arrives in China
Fortescue’s first commercial shipment arrives in China – 29 May 2008 For personal use only Existing Project – 55mtpa First Ore on Ship May 2008 2 Loading Berths 1 Ship loader 3.2mt stockpile Single loop 1 x 2 car train unloader Lump circuit 1Km
Slide 42: The New Force in Iron Ore
& The New Force tn Iron Ore v
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