Fortescue Ltd · ASX:FMG
Fortescue — Corporate Update (October 2023)
55 slides from Fortescue's corporate update, Oct 12, 2023
Slide 1: Pilbara Operations Site Tour Presentation
12 October 2023 PILBARA OPERATIONS SITE TOUR PRESENTATION Fortescue Metals Group Ltd (Fortescue, ASX: FMG) is hosting an institutional investor and analyst tour of its Pilbara Operations on 12-13 October, including a visit to Christmas Creek, Iron Bridge and Hedland Operations. A copy of the present
Slide 2: Pilbara operations site tour
Pilbara operations site tour OCTOBER 2023 © 2023 FORTESCUE FORTESCUE | 1
Slide 3: Forward Looking Statements Important Notice
Forward Looking Important Notice The purpose of this presentation is to provide general information about Fortescue Metals Group Statements Ltd and its subsidiaries (“Fortescue”). It is not recommended that any person makes any investment decision in relation to Fortescue based on this presentation.
Slide 4: Acknowledgement of Country
Acknowledgement of Country We would like to acknowledge the Traditional Custodians of the land on which we meet today and pay our respects to Elders past, present and emerging. We also wish to extend this respect to other Aboriginal people and Torres Strait Islanders who are present. FORTESCUE | 3
Slide 5: Presenters
Presenters Dino Otranto Vivienne Tieu Graham Howard Katie Valentine Chief Executive Officer Director Sales, Marketing General Manager Head of Decarbonisation, Metals and Shipping Iron Bridge Integration and Execution FORTESCUE | 4
Slide 6: Itinerary
Itinerary Christmas Creek • Green Energy Hub Iron Bridge • Site tour • Management presentation • Japal village Port Hedland • Concentrate Handling Facility • Stockyard and shiploader FORTESCUE | 5
Slide 7: Focused on becoming the number 1 integrated green technology, energy and metals company
Focused on becoming the number 1 integrated green technology, energy and metals company FORTESCUE | 6
Slide 8: We are Fortescue
We are Fortescue Unique culture Proven track record Robust balance sheet Focus on shareholder returns FORTESCUE | 7
Slide 9: Safety: Total Recordable Injury Frequency Rate
Safety Total Recordable Injury Frequency Rate (TRIFR) 7.6 1.8 TRIFR 6.0 5.1 4.3 3.7 2.9 2.8 Total Recordable 2.4 2.0 1.8 1.8 Injury Frequency Rate at 30 June 2023 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FORTESCUE | 8
Slide 10: Diversity, inclusion and equity
Diversity, inclusion and equity Fortescue Family Diversity Plan A safe and inclusive workplace for all Workplace Integrity Review Initiatives implemented to enhance safety 30% female employment in senior leadership roles FORTESCUE | 9
Slide 11: FY24 guidance
FY24 guidance 192 - 197mt US$2.8 - US$3.2bn Iron ore shipments Fortescue Metals capital expenditure US$18.00 - US$19.00/wmt US$800m C1 cost for Pilbara hematite Fortescue Energy net operating expenditure US$400m Fortescue Energy capital expenditure Guidance is based on an assumed FY24 exchange rate
Slide 12: Iron Bridge guidance
Iron Bridge guidance 22mtpa Within 24 months 5mt Production capacity Ramp up to full capacity FY24 shipments US$45/wmt US$7/wmt US$400m Life of mine attributable C1 Life of mine sustaining capital FY24 operating expenditure1 cost expenditure 1 Excluding royalties and shipping, Fortescue's share. FOR
Slide 13: Iron Bridge
Iron Bridge Fortescue. FORTESCUE | 12 Pee
Slide 14: Safety at Iron Bridge
Safety at Iron Bridge TRIFR of 1.51 Safety is our number one priority Risk reduction campaigns Ongoing safety programs Psychosocial safety Focus on mental health and wellbeing 1 Iron Bridge operations September Quarter 2023. FORTESCUE | 13
Slide 15: People and culture
People and culture 1,017 people Operations team (including contractors) 18% Female employment rate 12% First Nations employment rate FORTESCUE | 14
Slide 16: Community contribution
Community contribution A$3.6bn goods and services sourced in Western Australia A$331m in contracts Awarded to Nyamal businesses since 2019 8 VTEC trainees1 Employed at Iron Bridge 1 Vocational Training and Employment Centre. FORTESCUE | 15
Slide 17: Project milestones
Project milestones August 2013 April 2019 October 2022 July 2023 Joint Venture Agreement Final Investment First ore into the First ore Formosa Steel IB Decision processing plant on ship 1 2 3 4 5 6 7 June 2014 October 2019 May 2023 Stage 1 Construction First wet concentrate Pilot Plant started throu
Slide 18: March 2019
March 2019 FORTESCUE | 17
Slide 19: September 2023
September 2023 FORTESCUE | 18
Slide 20: Unlocking value at Iron Bridge
Unlocking value at Iron Bridge Unique process flow Four international and national patents High grade product New market segment Decarbonisation Targeting Real Zero by 2030 FORTESCUE | 19
Slide 21: Commissioning and ramp up
Commissioning and ramp up Successful Technical commissioning Staged Mechanical commissioning 24 months Ramp up to full production (from August 2023) FORTESCUE | 20
Slide 22: Commissioning and ramp up
Commissioning and ramp up Complete Monthly concentrate production (%) (million wmt) Commissioning update Production ramp up (as at September 2023) 2.0 100 FY24 FY25 FY26 1.8 FY25 1.6 80 1.4 1.2 60 1.0 40 0.8 0.6 20 0.4 0.2 0 0.0 Jul 22 Jan 23 Jul 23 Jan 23 Jul 23 Jan 24 Jul 24 Jan 25 Jul 25 Dry Plan
Slide 23: Iron Bridge value chain
Iron Bridge value chain Heritage and Water Mining Dry Plant Energy environmental management approvals Sales and Port CHF Concentrate pipeline Wet Plant Water marketing and return water FORTESCUE | 22
Slide 24: West Canning Basin
West Canning Basin Drawing from the Wallal Aquifer 10 bores at West Canning Basin Promoting water balance Flow sheet recycles water FORTESCUE | 23
Slide 25: Raw water pipeline
Raw water pipeline 160km Canning Basin pump station to Iron Bridge Glass reinforced plastic 1,000mm average diameter Commissioning Ongoing, focused on reliability FORTESCUE | 24
Slide 26: Iron Bridge mining operations
Iron Mining Bridge mining operations 6.5bn tonnes Large Mineral Resource1 110mtpa Total material moved Expected pit depth (m) 0 - Surface 0.7x 230 - Glacier Valley North 320 - Glacier Valley South Low strip ratio 340 - Eastern Limb Central 410 - Eastern Limb North 450 - North Star 1 Fortescue's Ore
Slide 27: Iron Bridge OPF process flow
Iron Bridge OPF process flow Million tonnes, dry metric tonne (dmt), wet metric tonne (wmt). FORTESCUE | 26
Slide 28: Process plant footprint
D Dry processing A B Wet processing Process plant footprint C Tailing thickeners A to B = 900m C to D = 1,500m FORTESCUE | 27
Slide 29: Dry Plant
Dry Plant Two dry crushing circuits Continuous feed and blending Air classification Innovative energy efficient design Dry rejects Early rejection of waste material FORTESCUE | 28
Slide 30: Wet Plant
Wet Plant Reduced fine grinding Energy efficiency HIG mills High Intensity Grinding Hydro separation Remove impurities without chemicals FORTESCUE | 29
Slide 31: Tailings storage facility
Tailings storage facility 32mtpa Tailings (dmt equivalent) Natural valley Downstream construction design Recycled water Extracted through embankment FORTESCUE | 30
Slide 32: Concentrate and return water pipelines
Concentrate and return water pipelines 135km Twin pipelines to Port Hedland 650mm diameter Steel pipe with liner Flow management Continuous monitoring FORTESCUE | 31
Slide 33: Concentrate Handling Facility
Concentrate Handling Facility Dewatering process From 38% moisture level 10Gl per annum Water recovered and recycled Integrated infrastructure Fortescue stockyard and outload FORTESCUE | 32
Slide 34: Port operations
Port operations Inload Outload Hematite 5 live canyons 3 stackers 3 reclaimers 3 shiploaders 5 berths Railway 3 car dumpers FY23 191mt Magnetite 22mtpa 200-205mtpa FY24 guidance current outload 192-197mt capacity Canyon G 1 stacker Concentrate pipeline CHF 1 reclaimer 210mtpa throughput license FORT
Slide 35: C1 cost breakdown
C1 cost breakdown Iron Bridge attributable C1 cost Pilbara Hematite C1 cost (LOM estimate) (FY23 actual) 2% 8% 7% 15% Mining 37% Processing Transportation and port 19% 59% Other 53% C1: Operating costs of mining, processing, transportation and port on a per tonne basis, including allocation of FORTE
Slide 36: First ore on ship
First ore on ship FORTESCUE | 35
Slide 37: Sales and Marketing
Sales and Marketing FORTESCUE | 36
Slide 38: Fortescue marketing strategy
Fortescue marketing strategy Direct stakeholder engagement Valuable products to our customers Long term relationships Deep understanding of customer needs Responsive to dynamic markets Innovative products and logistics offerings Technical engagement Addressing emerging industry trends FORTESCUE | 37
Slide 39: Strengthening Fortescue's portfolio: product positioning
Strengthening Fortescue’s portfolio Product positioning natural Fe vs. gangue (SiO2 + Al2O3) 12 Fortescue Producer 1 58 segment Producer 2 Producer 3 10 Mid-grade segment 8 Gangue (%) Premium segment Iron Bridge Conc. 6 4 2 Fe (%) 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 Source: Seaborne supply
Slide 40: Iron Bridge product is high grade and suitable for pelletisation
Iron Bridge product is high grade and suitable for pelletisation Strong demand Primarily as a pellet feed BF and DRI interest1 From steelmakers across the globe Lower carbon intensity Contributing to decarbonising steel production Optionality to blend Optimising value 1 Blast Furnace (BF), Direct Re
Slide 41: Pellet demand forecast to increase with decarbonisation
Pellet demand forecast to increase with decarbonisation Iron ore pellet demand, BF and DRI (mt) Pellet plant capacity growth (mt) 2022 – 2027 2022 – 2025 200 38 180 160 140 Additional growth 120 anticipated 2025 - 2030 100 80 12 60 6 40 3 2 20 0 Asia (Ex- Middle East North America China Europe 2020
Slide 42: Emerging gap in pellet feed supply
Emerging gap in pellet feed supply Supporting future demand for Iron Bridge product Forecast pellet feed supply shortfall (mt) 2022 – 2027 200 180 43 25 160 140 120 100 80 60 40 20 0 2020 2021 2022 2023 2024 2025 2026 2027 Global Pellet Feed Supply Supply - Demand Gap Source: Wood Mackenzie, CRU, Co
Slide 43: Iron Bridge product positioning
Iron Bridge product positioning Benefits from global market structural changes Conceptual Iron Bridge pricing US$/dmt 65% 65%Fe Index Fe Index Adjustment Adjustment to 67%FeFe to 67% Concentrate Concentrate //pellet Pellet IB Product Premium Iron Bridge Total Total IB $/dmt US$/dmt feed premium prod
Slide 44: Decarbonisation Update
Decarbonisation Update FORTESCUE | 43
Slide 45: Real Zero by 2030
Real Zero by 2030 Projected emissions pathway for Australian iron ore operations Scope 1 and 2 terrestrial emissions (mt CO2-eq) *Fortescue’s emissions are forecast to fall within the shaded range based on our current decarbonisation plan and modelling. It is subject to various FORTESCUE | 44 factor
Slide 46: Energy infrastructure
Energy infrastructure Integrated mine to market infrastructure Solar locations Wind location Anticipated infrastructure > 1GW ~ 1GW ~ 4GWh storage > 750 km Chichester Solar Transmission lines Gas Hybrid Operational Commissioned Under development Future development Solar and wind locations are subjec
Slide 47: Mobile asset overview
Mobile asset overview Green Heavy Mobile Equipment to replace: Powered by ~350 ~80 ~80 Haul trucks Excavators Fast chargers ~220 ~70 ~120 Other HME Drills Locomotives and tender cars Fortescue’s anticipated Pilbara Operations mobile assets in FY30. FORTESCUE | 46
Slide 48: Developing a portfolio of products to support zero emission mining
Developing a portfolio of products to support zero emission mining Battery electric Fast charger H2 fuel cell H2 fuel cell Battery electric Ammonia truck with for HME electric truck offboard locomotive locomotive Liebherr/WAE prototype power unit with WAE conversion kit FORTESCUE | 47
Slide 49: Decarbonisation program animation
Decarbonisation program animation FORTESCUE | 48
Slide 50: Green Fleet
Green Fleet Prototype battery system FORTESCUE | 49
Slide 51: Modular battery design
Modular battery design Flexible cell chemistry which is scalable and upgradable Cell Module Subpack cast layer Subpack Pack 1.25V – 1.47V 36 cells 2 modules per layer Stacked casting 8 subpacks in vehicle 45V – 52.8V (excluding top layer) 15 modules per subpack 1,350V – 1,584V 675V – 792V FORTESCUE
Slide 52: T264 – Power system solution
T264 – Power system solution External low level exchangeable parts to maximise safety and uptime FORTESCUE | 51
Slide 53: Roadrunner at Christmas Creek
Roadrunner at Christmas Creek FORTESCUE | 52
Slide 54: Fortescue Hive
Fortescue Hive The journey to a fully integrated mine to market facility Chichester Hub Downstream supply Smart operating Perth rail control control in Perth chain integration systems 2009 2012 2016 2020 2021 2022 2023+ Integrated port All site integrated Fully integrated and rail control operationa
Slide 55: We are Fortescue
We are Safety Integrity Fortescue Family Enthusiasm Empowerment Courage and determination Frugality Generating ideas Stretch targets Humility FORTESCUE | 54