Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — Macquarie Conference 2008
35 slides from Fortescue's conference presentation, May 8, 2008
Slide 1: Fortescue's first fully loaded iron ore train leaves Cloudbreak
Fortescue’s first fully loaded iron ore train leaves Cloudbreak For personal use only Macquarie Conference 8 May 2008 Fortescue Metals Group Ltd DISCLAIMER Important Notice The purpose of this presentation is to provide general information about Fortescue Metals Group Ltd ("Fortescue"). It is not re
Slide 2: Executive Summary
May 15 – the last piece of the jig-saw For personal use only • The Vision • Team Work • FOOS – 15 MAY 2008 Executive Summary Multi-decade strong market • Demand driving commodity prices and FMG’s FMG s multiple expansion program • Massive economic growth in China and India is here to stay – and so i
Slide 3: Fortescue's raw material role in developing world prosperity
Fortescue’s raw material role in developing world prosperity For personal use only China needs the Pilbara • Australia is the most competitive supplier to Asia • Three companies globally set price and dominate the seaborne market • Fortescue plans to be the 4th major seaborne supplier 3
Slide 4: Iron ore cash costs and analysts' prediction of relative operating costs
For personal use only • US$/dry tonne in real terms 0 10 20 30 40 50 60 70 80 90 0 Kumba Iron Ore non-Agglomerated CSN no on-Agglomerated Fuel p 100 Labour Royalty Supplies Electricity Transport Port Loading Maintenance CVRD non-Agglomerated 200 300 Fortesscue Metals non-Agglomerated y 400 Iron Ore
Slide 5: History remains the best guide to the future
History remains the best guide to the future For personal use only Project Liquidity 3,500 Equity Raised allocated to Project F.O.O.S. Millions 15/05/2008 (AUD) Cost Over-run & Back-up Reserve Infrastructure Contingency 3,000 , Mining & Working Capital Infrastructure Costs Actual / Forecast 2,500 2,
Slide 6: Marketing – Sold Out
Marketing – Sold Out For personal use only • Base Production Target – “Sold Out” • First Stage Expansion to 100 Mta already Committed • Long Term Relationships with Key Chinese Mills • Technical Focus on Product Performance Traits • Chemical and physical properties of product well tested and underst
Slide 7: Facts about the Pilbara Iron Ore and Infrastructure Project
Facts about the Pilbara Iron Ore and Infrastructure Project For personal use only Executed by a joint venture with Fortescue Metals Group and WorleyParsons called Team 45 FMG capital raised, or raised and repaid. • <A$4billion Total man-hours worked to date • >9 million Total man-hours lost due to i
Slide 8: Facts about… major projects that make Fortescue
Facts about… For personal use only Orders placed with suppliers • 4,500 4 500 Largest Contracts • McConnell Dowell at $181m Smallest Contract • $5,000 (sub contractor on Safety) Total number of Contracts • 332 Number of individual project control documents • >260,000 Major Projects that make Fortesc
Slide 9: Fortescue will meet the challenge
Fortescue will meet the challenge For personal use only Open Access Infrastructure • Initiallyy built to support pp Chichester Range g Project j • Easy expansion Aggressive expansion plans • 55mtpa – FOOS: May 2008 • July 2008 FMG will consider a further expansion Fortescue: not missing the boat to
Slide 10: The Myth.... The Reality with FMG's tenements included
The Myth.... For personal use only The Reality with FMG’s tenements included 10
Slide 11: FMG Pilbara Holdings Dwarfs Others
FMG Pilbara Holdings Dwarfs Others For personal use only FMG – 40,000 sq. km, Rio – 11,000 sq. km, BHP – 7,000 sq. km 11
Slide 12: The Delivery Systems: Mine construction and operations
The Delivery Systems For personal use only Delivery D li System S t Mine construction and operations 12
Slide 13: Mine and ore preparation
Mine and ore preparation For personal use only From Concept p y To Reality Fortescue Mine Site - 2007 •Fortescue Mine Site - 2008 Surface miners prove themselves in commercial operations Daydream Pit Hayman Pit 13
Slide 14: Easy free dig shallow & extensive ore bodies
Easy free dig shallow & extensive ore bodies For personal use only Ore Body Characteristics • Free digging over burden low cost removal • Mineralisation gently undulating - typical dip at 2° to 5° • Mineralised thickness varies between 3 metres and 20 metres • Multiple mining faces facilitate high p
Slide 15: Cloudbreak Village – a new standard in remote accommodation
Cloudbreak Village – a new standard in remote accommodation For personal use only Regular charter flights to Cloudbreak airport 15
Slide 16: Daydream Pit
Daydream Pit For personal use only Note the flat, clean, tyre friendly pit floor 16
Slide 17: First ore on mine conveyor (Cloudbreak)
First ore on mine conveyor (Cloudbreak) from Surface Miner shuttle dump point For personal use only Screening plant powered up and commissioned 17
Slide 18: Crushing plant commissioning
Crushing plant commissioning For personal use only World’s largest radial stacker commences first operations 18
Slide 19: Delivery System: Rail construction and operations
Train Loader commencing operations For personal use only Delivery D li System S t Rail construction and operations 19
Slide 20: Rail Site – From Concept To Reality
Rail Site For personal use only From Concept To Reality Fortescue Rail Site - 2007 Fortescue Rail Site- 2008 The world’s heaviest haul rail system 20
Slide 21: State of the art rail operations
State of the art rail operations For personal use only Target - Lowest cost transport in the Pilbara Rail • Clean sheet design captures best of existing technology and moves it on: – Bigger carrying capacity – Electronic braking system – Aerodynamics • 40 tonne axle loads • Low centre of gravity, lo
Slide 22: And the BHPB bridge
And the BHPB bridge For personal use only 17 October 2007 3 March 2008 First Ore on Train – 8 April 2008 22
Slide 23: Famous last words…. Port construction and operations
For personal use only Famous last words…. “I’m happy to be chained to the tracks somewhere between Cloud Break and Port Hedland in May next year because I know th t I will that ill nott be b killed kill d b by a ttrain.” i ” Fund Manager (Name withheld), 2007 Delivery systems Port construction and o
Slide 24: Port and loading systems – From Concept To Reality
Port and loading systems For personal use only From Concept To Reality Fortescue Port Site - 2006 Fortescue Herb Elliot Port - 2008 The Myth….. 24
Slide 25: State of the art port operations
The Reality….. For personal use only 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 25
Slide 26: Train unloader fully commissioned
Train unloader fully commissioned For personal use only Stacker & Reclaimer – commissioning now 26
Slide 27: Reclaimer, commissioning now
Reclaimer, commissioning now For personal use only Stacker stockpiling at Port First 2 ships stockpiled, third ship underway 27
Slide 28: Major equipment maintenance shed
Major equipment maintenance shed For personal use only Wharf and shiploader now commissioning 28
Slide 29: Forward into operations
Forward into operations • New Surface Miners outstrip expectations For personal use only • First Ore On Ship (FOOS) expected May 2008 Existing Project – 55mtpa First Ore on Ship May 2008 2 Loading Berths 1 Ship loader 3.2mt stockpile Single loop 1 x 2 car train unloader Lump circuit 1Km 29
Slide 30: Port Operations
Port Operations For personal use only • July y 18, 2003 Fortescue announced a major iron ore development strategy (50mtpa) • July 18, 2008 Fortescue will consider a major, major well-planned well planned project expansion 30
Slide 31: Was July 2003 to now, high risk?
Was July 2003 to now, high risk? For personal use only Certainly. However the risks were very well calculated and mitigated from start to fi i h finish. There was no Plan A without a Plan B Like in 2003, in July 2008… We will have a coherent and detailed plan The risks will be very well calculated a
Slide 32: Project Locations that will support an expansion
Project Locations that will support an expansion For personal use only •WEST PILBARA PRODUCTION HUB •EAST PILBARA PRODUCTION HUB Port – planning for expansion •200+ mtpa •110 •60 mtpa mtpa •Train Unloader 32
Slide 33: Port Expansion under consideration
Port Expansion under consideration For personal use only 3 berths 6.5mt stockpile Double loop 2x 2 car train unloaders 1Km Port Expansion under consideration 6 x Cape size + 1 x Panamax berth) 4xR Rail il Loop L 4 x Train Unloader 200+Mtpa stock yard 07_038_0521_COR 33
Slide 34: Australian heritage, an Anzac dawn at Cloudbreak
Australian heritage, an Anzac dawn at Cloudbreak For personal use only FMG – an example of never, ever,, giving up. 34
Slide 35: The New Force in Iron Ore
& The New Force in Iron Ore 35