Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — China Iron Ore 2006
31 slides from Fortescue's conference presentation, Mar 28, 2006
Slide 1: Fortescue Metals Group Ltd - China Iron Ore 2006
Fortescue Metals Group Ltd China Iron Ore 2006 The New Force in Iron Ore 28 Marek 2006 s of Fortescue Metals ‘absent registration rom:-registratign undeérsuch laws. tion in the United States,
Slide 2: Project overview
Project overview Developing world class Chichester Iron Ore and Infrastructure Project * ASX listed -2,470 Mt of Resources (incl. 1,100 Mt of Reserves) * First Major project underway: >AU$1bn EBITDA p.a. + Dominant landholder of the worlds richest iron ore region — The Pilbara * Highly experienced e
Slide 3: Project Underway
Project Underway * The “CSD Leonardo Da Vinci” one of the world’s largest dredge ships has been contracted to commence dredging in early June * Major earthworks to prepare for dredge spoils commenced on February 8, 2006 The CSD Leonardo Da Vinci is experienced in the Pilbara — the North West Shelf +
Slide 4: CSD Leonardo Da Vinci — one of the world's largest dredge ships
I CSD Leonardo Da Vinci — one of the world’s largest dredge ships
Slide 5: Fortescue Ownership
Fortescue Ownership Major Institutions dominate register after management (with 30%) * Global Institutions * Major American Institutions * Australian Institutions * Asian Institutions + 2 Major European Institutions Management with equity commitment + Experienced, committed team * 43% ownership (aft
Slide 6: The largest bedrock hosted iron ore discovery in Australia
The largest bedrock hosted iron ore discovery Hi reserve in Australia Robe resource HI resource: x Co 9 2 cc DQ € 3 a Notes + fotal resources are exclusive of total reserves + data derived or calculated from best available company, technical and government public reports. + refer to relevant ASX rel
Slide 7: BHP Billiton
BHP Billiton (Pilbara contributes around 25% of BHPB’s market cap) Location te wn Sf gare Paraburdoo LEGEND Borthediand Ei jouth Hedland Source: BHPB / Rio Sector Analysis
Slide 8: BHP and Rio Tinto
BHP and Rio Tinto (Pilbara contributes about 50% of Rio’s market cap) Location ae ‘Port Hedland Ff: Mount Goldswort hy a, EB g jouth Hedland “a Set Battier WA &, a eval ae ws LEGEND Town @ Highway @ oy 0 eeg {eac4 zA sjom Price, 7 Source: BHPB / Rio Sector Analysis
Slide 9: Fortescue has largest iron ore holdings in the Pilbara
Fortescue has largest iron ore holdings in the Pilbara Location : eS m oe Goldeworthy LEGEND Sq km Holdings BHPB — 5,500 Rio — 9,100 FMG — 33,800 33,800 square kms of tenements / 2.4 bn tonnes of iron ore from less than 10% of these holdings
Slide 10: The Pilbara is one of the most profitable mineral regions in the world
The Pilbara is one of the most profitable mineral regions in the world aa LEGEND Location a jount Goldsworthy varie south Hediand arralla; lori ese La Temata
Slide 11: Risks managed
Risks managed Risk Mitigant Market v | 36.4 Mtpa contracts Ore Body v | Huge, 2.47 Bt Resource, 1.1 Bt Reserve Approvals ¥ |All pre-requisites in place Construction ¥ | Infrastructure DFS complete * EPCM underway * Critical contracts ready to be awarded Operations vY Experienced management team esta
Slide 12: Australia's iron ore is cheaper than Brazil's.
Australia’s iron ore is cheaper than Brazil’s.
Slide 13: Australian ore is reliable and the most competitive
Australian ore is reliable and the most competitive Australian Ore $US 54.94 South Africa Ore $US 66.77 Brazilian Ore $US 70.91 Indian Ore $US 76.23 “In iron ore, you can’t compete with the Pilbara” - Grant Samuel Source: China Metallurgical News — 2005 average landed price
Slide 14: Demand outlook
Demand outlook * CRU (leading iron ore commentator) forecasts global iron ore demand to reach 2 Billion tonnes (Bt) by 2015 and 2.275Bt in 2020 - Anew Fortescue Project needs to be added every year * Continuing demand growth out of Asia demonstrates need for a number of Fortescue’s projects * Timing
Slide 15: Fortescue — developing Australia's largest iron ore landholding
Fortescue — developing Australia’s largest iron ore Landholding
Slide 16: Two high grade (HG) product streams initially
Two high grade (HG) product streams initially Two High Grade + 60% Fe Products Lump and Fines Greater demand than availability . . | Chemical Analysis dry weil 4 7 Moictu Product Target Grade) Fe LO, L (8 (G0 Te wr Me KO Ne fee Sie ee High Grade Lump 61.1 7.6 28 41.3 | 0,050 | 0.025 | 0.04 | 0.04 |
Slide 17: Fines only product
— Fines only product — Cost effective choice for mills — Convert to a higher grade product as production allows — Direct relationship with supplier aa | facined ~—~—=— Mojsture Chemical Analysis dry weight % ProductTaodtGrde Fe Ola, SI ALG, «=P S CaO Th ee bie AL Super Value Fines 0.12 | 0.54 | 0.09
Slide 18: 2004 Iron ore comparison
2004 Iron ore comparison — Fe content of Australian shipped ores * Rio and BHP sold 84 Mt of ores with Fe less than Fortescue HG * Rio and BHP sold 62 Mt of ores with Fe less than Fortescue SV * Fortescue’s ore is very attractive to Asian mills with 36.4Mt under contract * We believe Asian steel mil
Slide 19: China Central South University Test Results
China Central South University Test Results 1. Sintering Performance . Productivity is excellent compared to similar products of competitors due to: Ultra fines is relatively low Consistent size distribution . = Superior throughput * Superior tumble strength * High permeability 2. Blast Furnace Perf
Slide 20: Continuous Miner cutting iron ore and stockpiling
Continuous Miner cutting iron ore and stockpiling eeu “ y y
Slide 21: Fortescue November 2005 — Unparalleled progress
777» Fortescue 14 November 2005 — Unparalleled progress Iron Ore ready to be shipped
Slide 22: Fortescue Trial Pit - November 2005
Fortescue Trial Pit - 25 November 2005
Slide 23: Mining Definitive Feasibility Study
sv HG O Mining Definitive Feasibility Study PLANT HG Stockpile SV Stockpile O © TRUNK CONVEYOR OO D Interim Stockpiles __| CO Feeder Hopper O Truck Cat 777 Truck Cat 777 SM SM Mining Pane! Mining Panel
Slide 24: Open Pit Mining, simple, smart
Open Pit Mining, simple, smart Continuous miners for ore, conveyors for waste Mi
Slide 25: Project locations and proposed railway
Goldsworthy” Neoerorog? Fogt racustes, / Port Hedland Enlargement: Fin ait ‘Lose a Nuilagine Cloud Break. ® Christmas Creek SS SeccTom Prive 2 FMG Proposed Railway Sen 2¢ BHPB Newman Railway > ak BO aon | 400 @© FMG Projects og ES kilometers
Slide 26: Te
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Slide 27: Project Establishment Capital secured - US$200m
Step 1 — Project Establishment Capital secured - US$200m Amount initially sought was three times over-subscribed Secured Facility to be repaid from permanent capital when concluded 2 year senior secured debt facility with a review event after 12 months Facility in place to ensure rapid development o
Slide 28: Project underway
Project underway AREA SUPPLIER CURRENT STATUS Dredging D| ™ Contract Awarded Wharfs P// CLOUGH | Final selection & contract close Q1 06 Ore Cars y 4 i EDI wueoconinan lee detailed design and/or 4 o See construction of prototype = Engineering capability review Locos ad EDi completed : UNITED GONINAN
Slide 29: Project underway
Project underway AREA SUPPLIER CURRENT STATUS Competitive tendering Port Bulk Material = completed Handling Equipment WAE oe Selection of preferred supplier & final negotiations Competitive tendering Mine Material Handling Final negotiations EPCM WorleyParsons FEED Contract signed resources 8 energy
Slide 30: Summary
Summary * Long Life Ore Reserves — 20++ Year Mine life * Low operating cost / high margin /very high quality earning stream + Ore Quality is competitive with market leaders BHP and Rio Tinto * No Technology Risk — Open Pit Mine, Rail, Port Loading
Slide 31: Fortescue Metals Group Ltd
Fortescue Metals Group Ltd LEGEND Location bk i ; The New Force in Iron Ore Fortescue House 50 Kings Park Road West Perth Western Australia wearw fing! corm .au (eens J