Fortescue Ltd · ASX:FMG

Fortescue — Fortescue Metals Group — Corporate Update (May 2014)

15 slides from Fortescue's corporate update, May 29, 2014

  1. Slide 1: Australia must maximise its natural gas advantage

    29 May 2014 For personal use only The Companies Officer Australian Stock Exchange Exchange Plaza 2 The Esplanade Perth WA 6000 Dear Sir AUSTRALIA MUST MAXIMISE ITS NATURAL GAS ADVANTAGE Fortescue Metals Group Ltd (ASX: FMG) has called for the enforcement of Retention Lease “Use it, or Lose it” polic

  2. Slide 2: For personal use only

     The imposition of the domestic gas reservation policy has the unintended consequence of linking the LNG export and domestic gas industries together.  Deloitte Access Economics modelling suggests some gas reserves held under Retention Leases are commercially viable now to develop for standalone do

  3. Slide 3: Unlocking Western Australia's Energy Advantage

    Unlocking Western Australia’s Energy Advantage For personal use only CEO Nev Power – 29 May 2014

  4. Slide 4: Disclaimer

    Disclaimer For personal use only Important Notice The purpose of this presentation is to provide general information about Fortescue Metals Group Limited ("Fortescue"). It is not recommended that any person makes any investment decision in relation to Fortescue based on this presentation. This prese

  5. Slide 5: WA Gas Sector Analysis

    WA Gas Sector Analysis Why Fortescue is focussed on natural gas policy For personal use only We are a large energy user Western Australia has a natural gas advantage Long term gas supply uncertainty 3

  6. Slide 6: Building a World Class Company

    Building a World Class Company Mature, reliable and competitive supplier For personal use only • Founded 2003 • First ore 2008 • Over 334mt shipped to date • Achieved 155mtpa production rate • Large and growing resource base • Unique culture drives success 4

  7. Slide 7: Sustainably delivering 155mtpa

    Sustainably delivering 155mtpa World’s fourth largest seaborne exporter For personal use only 100mt shipped in CY2013 $US3.1bn debt reduction  Infrastructure complete March 2014 155 mtpa  Ramped up across mines and processing facilities Costs efficiency focus 30% CY2013 5

  8. Slide 8: Vision to be the safest, lowest cost iron ore producer

    For personal use only 6 Million tonnes Million tonnes 10 15 20 25 30 35 40 0 5 10 0 15 20 25 30 35 40 5 Q308 Q308 Q408 Q408 Q109 Q109 Q209 Q209 Q309 Q309 Q409 Q409 Q110 Q110 Q210 Q210 Q310 Q310 Q410 Q410 Q111 Q111 Q211 Q211 Q311 Q311 Q411 Q411 Q112 Q112 Q212 Q212 Q312 Q312 Q412 Ore mined (wmt) Q412

  9. Slide 9: Moving down the global cost curve

    Moving down the global cost curve Targeting bottom quartile For personal use only China Iron Ore Supply CFR Costs – May 2014 (including royalties & freight) 200 Domestic Chinese Ore Australia Brazil India 150 South Africa Other US$/dry tonne 100 50 Fortescue 0 0 100 200 300 400 500 600 700 800 900 1

  10. Slide 10: Significant reliance on diesel fuel

    Significant reliance on diesel fuel Driven by remote power and mobile fleet consumption For personal use only Total energy spend >US$800 million Diesel (Mine Fleet) Diesel (Rail) Diesel (Electricity) Diesel (Ancillary) Gas (Port) 8

  11. Slide 11: Strategies for lower energy costs

    Strategies for lower energy costs Alternatives to Diesel For personal use only Natural Gas for Power Generation Fortescue River gas pipeline to Solomon – sized for expansion Gas for mining equipment Potential for gas to be utilised as an alternative fuel source by Fortescue’s heavy vehicle fleet Ren

  12. Slide 12: Fortescue River gas pipeline

    Fortescue River gas pipeline Stage 1 – to Solomon Hub For personal use only • 270km gas pipeline • 16 inch pipe • Built, owned, operated by DBP/TransAlta 10

  13. Slide 13: Security of Natural Gas Supply

    Security of Natural Gas Supply Unlocking Australia’s energy advantage For personal use only • “Use it, or lose it” enforced, transparent Retention Leases • Potential to unlock $3-$4/GJ reduction in gas prices • Create 2,100 extra jobs in WA by 2020 • Additional WA Gross State Product $2.5 billion in

  14. Slide 14: Competitive energy powering the future

    Competitive energy powering the future Utilising lower cost energy For personal use only • Securing long term supply certainty • Competitively priced energy for our economy • Reducing carbon emissions • Reliable energy supply to offset imports 12

  15. Slide 15: For personal use only

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