Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — Global Iron Ore and Steel Forecast Conference (March 2019)
25 slides from Fortescue's conference presentation, Mar 20, 2019
Slide 1: Fortescue Metals Group March 2019
For personal use only Fortescue Metals Group March 2019 Together we are Fortescue
Slide 2: Forward looking statements Disclaimer
Forward looking For personal use only statements Disclaimer Important Notice Additional Information The purpose of this presentation is to provide general information about Fortescue This presentation should be read in conjunction with the Annual Report at Metals Group Limited ("Fortescue"). It is n
Slide 3: Safety and unique culture
Safety and unique culture For personal use only Looking out TRIFR 4.0 for our mates (12MMA) Targeted safety improvement TRIFR 3.5 (Dec YTD) initiatives 3
Slide 4: Building strong communities
Building strong communities For personal use only Female Aboriginal Trained and participation rate participation rate employed via VTEC 18% 13% 824 Aboriginal team members Australian workforce Over A$2.2bn Paid over GHG emissions contracts A$3bn Corporate Tax intensity reduced with Aboriginal A$4.8b
Slide 5: Automated mining
Automated mining For personal use only Delivering productivity and efficiency improvements 26 million 109 Relocatable kilometres AHS trucks conveyor safely travelled in operation Operating at full capacity Autonomous Remote Data analytics drills integrated Driving productivity operations centre and
Slide 6: Sustainable cost improvements
Sustainable cost improvements For personal use only C1 US$/wmt 48 44 Structural improvements Solomon + blending + processing 34 27 Productivity and efficiency Utilisation, recoveries, maintenance 15 13 12 13 Innovation and technology Autonomy, conveyor, ore carriers, data analysis FY12 FY13 FY14 FY1
Slide 7: HY19 highlights
HY19 highlights For personal use only US$1.6bn A$0.30/share NPAT Underlying US$644m dividends EBITDA US$13.11/wmt West Pilbara 82.7mt Fines shipped C1 cost Shipments commenced 7
Slide 8: Market
For personal use only Market 8
Slide 9: Integrated operations and marketing
Integrated operations and marketing For personal use only Direct customer Collaborative engagement operations and driving deep market marketing insights to capitalise on market opportunities Co-location of key Margin decision makers optimisation enabling rapid response to through rapid product marke
Slide 10: Strong demand for Fortescue products in China and other regions
Strong demand for Fortescue products in China and other regions For personal use only China steel production increased 12% in 2018 to 928mt • Proximity to high growth region • Responsive to market needs • Diverse customer base • Half year sales outside China 10 per cent • Maiden shipments to new Ind
Slide 11: Chinese steel mill profits moderating
Chinese steel mill profits moderating For personal use only 250 90% 225 85% China steel 200 Steel Product Margin (US$/t) 80% margins moderating 175 75% % of profitable mills 75% 150 Focus moved to 125 70% 100 input costs 66 65% 75 60% Increasing demand 50 55% 25 for lower Fe products 0 34 50% HRC Ma
Slide 12: Strong demand for Fortescue products
Strong demand for Fortescue products For personal use only Higher stocks of Brazilian iron ore at China ports FMG stocks at major China ports have declined further since December 30 155 25 140 China 45 Port Stocks (Mt) 20 125 Mt 15 110 10 95 5 80 65 0 12 Australia Brazil Others Source: Mysteel; Fort
Slide 13: Iron ore price
Iron ore price For personal use only Price spreads have narrowed due to lower steel margins 160% 140% % Mysteel 62 Port Index 120% 100% 80% 60% 40% 13 FBF - Mysteel SSF - Mysteel Mysteel 65% Port Index Mysteel 62% Port Index
Slide 14: West Pilbara Fines
West For personal use only Pilbara Fines Typical grade WPF Platts First shipments in Dec 2018 IODEX 62 Iron content (Fe) 60.1 62.0 8-10mt in FY19 Alumina (Al2O3) 2.3 2.25 Growing to ~40mtpa for 20+ years Silica (SiO2) 4.7 4.0 on completion of Eliwana Phosphorous (P) 0.075 0.09 Offtake commitments wi
Slide 15: WPF further strengthens the product portfolio
WPF further strengthens For personal use only the product portfolio • Can be used to replace other mid-grade products • Strong customer interest • Competitively priced • Allocated primarily under contract 15
Slide 16: Growth and Development
For personal use only Growth and Development 16
Slide 17: Significant Pilbara footprint for long life production
Significant Pilbara footprint for long life production For personal use only Underpinning strategic mine plan to 2050 17
Slide 18: Eliwana mine and rail project
Eliwana mine For personal use only and rail project US$1.275bn capital investment Underpins the future of West 143km rail Pilbara Fines 30mtpa dry OPF First ore on train Dec 2020
Slide 19: Eliwana Development progress
Eliwana For personal use only Development progress Majority of major equipment tendered and in line with budget On target for delivery on time Detailed design well progressed and budget using in-house integrated team 200 person fly camp mobilised Construction tenders early 2019 19
Slide 20: OPF Overview
OPF For personal use only Overview Fortescue integrated design team 30mtpa dry processing Significantly smaller footprint Low height structure designed to support onsite construction compared to Firetail Optimised, highly efficient design Low capital intensity Modular plant design 20
Slide 21: Iron Bridge
Iron Bridge For personal use only Under active assessment +67% Fe magnetite concentrate product Process test work positive Project scale to optimise value Non-recourse financing options 21
Slide 22: Key strategic focus
Key strategic focus For personal use only Balance sheet Long term strength sustainability Growth and Returns to development shareholders options 22
Slide 23: Fortescue's values
Fortescue’s values For personal use only Our Vision: The safest, lowest cost, most profitable mining company 23
Slide 24: Fortescue The New Force in Iron Ore
For personal use only ¢; Fortescue The New Force in Iron Ore www.fmgl.com.au Ww FortescueNews
Slide 25: Glossary
Glossary For personal use only C1 - Operating costs of mining, processing, rail and port on a per tonne basis, Underlying EBITDA - Earnings before interest, tax, depreciation and amortisation, including allocation of direct administration charges and production overheads. exploration, development an
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