Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — J.P. Morgan Global High Yield & Leveraged Finance Conference 2011
16 slides from Fortescue's conference presentation, Mar 2, 2011
Slide 1: J.P. Morgan Global High Yield & Leveraged Finance Conference
For personal use only J.P. Morgan Global High Yield & Leveraged Finance 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 de
Slide 2: Integrated Business ~ 100mt shipped
Integrated Business ~ 100mt shipped For personal use only Ownership of infrastructure is the key Growth 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 rail s
Slide 3: Fortescue has the dominant Pilbara position
Fortescue has the dominant Pilbara position For personal use only Fortescue: >85,000km2 Rio: 14,230km2 BHP: 8,195km2 5 Reserves and Resources (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 Christ
Slide 4: Proven project development skills - records
Proven project development skills - records For personal use only From concept To reality Herb Elliott Port Port 2006 2008 Fortescue Rail Railway 2007 2008 Cloudbreak Mining g Minesite 2006 2008 FACT: Fortescue built its infrastructure faster than any other Australian mining company FACT: Fortescue
Slide 5: Unparalleled production ramp up
Unparalled production ramp up For personal use only Fortescue – forging ahead
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: Debt maturity profile
Debt maturity profile For personal use only Pre October 2010 profile: Post October 2010 profile: • Majority of debt due by 2016 • Extended repayment p y p profile • Lack of flexibility • Unsecured debt includes call option flexibility $1,080 $2,147 Unsecured Notes $2,040 $2,040 $900 Unsecured Notes:
Slide 10: Marketing – index pricing transition
Marketing – index pricing transition For personal use only Benchmark regime - FOB Index pricing - CFR 160 150 140 130 120 Average CFR selling price per dry tonne 125 US$ 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 Mar-10 Jun-10 Sep-10 Dec
Slide 11: Rocket Fines Fe with Pilbara competitor fines
Rocket Fines Fe with Pilbara competitor fines For personal use only Uncalcined Fine Iron Ores Calcined Fine Iron Ores Iron Iron 68.0 70.0 67.0 69.0 66 0 66.0 68.0 65.0 64.0 67.0 63.0 66.0 <2.6% Fe diff erence 7.0% Fe difference 62.0 65.0 61.0 64.0 % Fe % Fe 60.0 63.0 59.0 FMG - Rocket Fines Rio-Pilb
Slide 12: Capturing the opportunity - 155mtpa
Forging Ahead For personal use only Development Capturing the opportunity - 155mtpa • Rapid growth: • Now: Chichester 55mtpa on schedule for March Qtr 2011 commissioning • Short S o t term: te 155mtpa 55 tpa Port ota and d Rail a e expansion pa s o uunderway de ay aand d So Solomon o o ad advancing
Slide 13: Nyidinghu – latest 1 billion tonne discovery
FMG is the Pilbara’s most successful explorer Nyidinghu – latest 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 BI
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: Port infrastructure
Port infrastructure Capacity (mtpa) 55 95 155 For personal use only Berths 2 3 5 Shiploaders 1 2 3 Capacity (mtpa) 55 95 155 Stackers 2 2 4 Reclaimers 1 2 3 Capacity (mtpa) 55 95 155 Train Unloaders 1 2 3 Designed for future expansion BHP Fortescue
Slide 16: Short to medium term value catalysts
Short to medium term value catalysts For personal use only • Delivering the 55mpta ramp-up • Rapid progress to 155mtpa • Solomon and Western Hub resource statements • Major new discoveries • Supply lag, rising minimum price expectations • Analyst comparison to BHP / Rio Iron ore of FMG in 2 years Fo
Fortescue Metals Group — J.P. Morgan Global High Yield & Leveraged Finance Conference 2011 on 6ix