Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — Investor Presentation (October 2009)
21 slides from Fortescue's investor presentation, Oct 12, 2009
Slide 1: Onwards and Upwards: The 40 millionth tonne
12/10/2009 Onwards and Upwards The 40 millionth tonne October 2009 Fortescue Metals Group 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 decisi
Slide 2: Fortescue fact sheet and Q1 FY10 key points
12/10/2009 Fortescue fact sheet • 16 months of production • Shipments to date >40 million tonnes • O track On t k for f platform l tf off 55 mtpa t byb mid id FY11 • Second processing plant to be commissioned in 2010 • Rail committed to Christmas Creek • Strong balance sheet • Solomon project under
Slide 3: Key information
12/10/2009 Key information Q1 FY09 Q2 FY09 Q3 FY09 Q4 FY09 Q1 FY10 Ore Mined (Mt)1 7 099 7.099 8 463 8.463 6 545 6.545 8 899 8.899 10 306 10.306 Overburden Removed (Mt)1 20.234 26.770 28.366 28.706 26.421 Ore Processed (Mt)1 6.682 6.112 6.455 8.544 9.577 Ore Shipped (Mt)1 6.881 6.280 6.167 7.985 9.5
Slide 4: Cash operating cost per tonne
12/10/2009 Cash operating cost per tonne 35 30 25 20 US$ per tonne 15 10 5 0 Q1 FY09 Q2 FY09 Q3 FY09 Q4 FY09 Q1 FY10 * * Rise due primarily to exchange rate, ongoing cost focus will continue to drive efficiency Achieving operational excellence Volume: 35mtpa (Cloudbreak) Volume: 40mtpa (Cloudbreak)
Slide 5: Train loading and unloading speeds
12/10/2009 Train loading speed – accelerating 140 120 100 Seconds per 80 dual wagon pair 60 40 20 0 Q2 FY09 Q3 FY09 Q4 FY09 Q1 FY10 Train unloading speeds – accelerating 200 180 160 140 120 Seconds per dual wagon 100 pair 80 60 40 20 0 Q2 FY09 Q3 FY09 Q4 FY09 Q1 FY10 5
Slide 6: Shiploading rates
12/10/2009 Shiploading rates – accelerating 7,000 6 000 6,000 5,000 4,000 Tonnes per hour 3,000 (GLR) 2,000 1,000 0 Q4 FY08 Q1 FY09 Q2 FY09 Q3 FY09 Q4 FY09 Q1 FY10 Christmas Creek will expand total volume capacity to 55mtpa by mid FY2011 Haul 16 Rail 39 RoM tonnes CB dry de-sand CC wet de-sand Port
Slide 7: Proven skills in construction and operations
12/10/2009 Proven skills in construction and operations From concept To reality Herb Elliott Port Port 2006 2008 Fortescue Railway Rail 2007 2008 Cloudbreak Mine Minesite 2006 2008 FACT: Fortescue built its infrastructure faster than any other mining company FACT: Fortescue ramped up production fast
Slide 8: World class asset operating low on the cost curve
12/10/2009 World class asset operating low on the cost curve Iron Ore Cash Costs for 2009 - Saleable Mine and Pellet by Company 90 P t C Port Costs t 80 R oyalties US$/dry ttonne in real terms Transport LKAB: Pellets Pelletizing 70 Processing Fortescue Metals: Lumps, Fines M ining BHP Billiton: Lump
Slide 9: Exploration
12/10/2009 Exploration 6.3 billion tonnes in 5 years • Christmas Creek drilling commenced May 2004; • Cloudbreak commenced November 2004; • Solomon drilling commenced June 2007. • Reserves now1.58 billion tonnes • Resources now 5.1 billion tonnes • Additional 1.2 billion tonnes of magnetite • Discov
Slide 10: State of the art mining operations
12/10/2009 State of the art mining operations Target - Lowest cost, highest efficiency in the Pilbara Overburden trucks Excavator in action Surface miner in action OVERBURDEN ORE BODY Ore trucks ORE BODY Surface mining operations 10
Slide 11: Low cost overburden system under commissioning
12/10/2009 Low cost overburden system under commissioning Pilbara’s largest ore processing plant 11
Slide 12: State of the art rail operations
12/10/2009 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 – Aerodynamics • 40 tonne axle loads • Low centre of g gravit
Slide 13: State of the art port operations
12/10/2009 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 Two berth operation at FMG’s Herb Elliott Port 13
Slide 14: 155Mtpa Anderson Point; Strong product acceptance
12/10/2009 155Mtpa Anderson Point • 5 x Cape size • 3 x Rail Loop • 3 x Train Unloader • 155 Mtpa stock yard expandable to 200+mtpa Strong product acceptance • High calcined iron • Mills can use up to 50%, vs15% • Low in contaminants max for MAC, 35% Pilbara Blend • Coarse size with low ultrafines •
Slide 15: Rocket fines in sinter blends
12/10/2009 Rocket fines in sinter blends Rocket Fines Usage at Customer Steel Mills 30% 25% % of Fortes cue Custom ers 20% 15% 10% 5% 0% 0-10 10-20 20-30 30-40 40-50 50 - 80 >80 % Rocket Fines Used in Customer Sinter Blend (Ore Basis) Most mills using Rocket Fines at 30-45% of their sinter blend wit
Slide 16: Significant reserves and resources with upside potential
12/10/2009 Significant reserves and resources with upside potential to support long mine life Resource Tonnes (Mt) Fe (%) SiO2 (%) Al2O3 (%) P (%) LOI (%) Category Measured 151 59.4 3.78 1.94 0.054 8.20 Indicated 2,213 58.0 4.94 2.61 0.055 8.10 Inferred 2279 56.5 6.41 3.36 0.077 8.20 Total 4,643* 57
Slide 17: FMG Pilbara resources and targets; Solomon
12/10/2009 FMG Pilbara resources and targets to underpin the project pipeline Current Current Further TOTAL Area Resources g Targets Potential Chichester Hub 2.81 1.8 1.3 6.0 Solomon Hub 2.27 1.1 1.5 4.9 Jeerinah Anticline 1.5 1.1 2.6 Western CID 1.0 1.0 2.0 Southern Pilbara 0.4 0.8 1.2 Eastern Pilb
Slide 18: Expansion plans – Solomon project
12/10/2009 Expansion plans – Solomon project Investigator Firetail Solomon East Serenity Cloudbreak Christmas Creek Firetail prospect • Firetail north (including Joffre) and Firetail south all within close proximity • Additional BID targets in region from drilling of mapped mineralisation 18
Slide 19: Solomon East (CID); Current port infrastructure
12/10/2009 Solomon East (CID) • More than 30 km strike length of CID in valleys • Additional tonnages to be gained by exploring other valleys and infill some areas Current port infrastructure 2 Berths 1 Shiploader 2 Stackers 1 Reclaimer 1 Train Unloader 19
Slide 20: Port infrastructure; Expansion risk considerations
12/10/2009 Port infrastructure Capacity (mtpa) 55 95 155 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 Expansion risk considerations Risk Mitigant • Proven management g expertise p and capability p y across al
Slide 21: www.fmgl.com.au
12/10/2009 F regular For l emailil alerts l t register i t online li www.fmgl.com.au 21
Fortescue Metals Group — Investor Presentation (October 2009) on 6ix