Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — Diggers and Dealers 2008
31 slides from Fortescue's conference presentation, Aug 5, 2008
Slide 1: Fortescue Metals Group – Diggers and Dealers
Fortescue Metals Group For personal use only Diggers and Dealers 4 August 2008 Why do we exist? • To generate shareholder value by opening the Pilbara and breaking the duopoly • To create a new global iron ore supply and resource major Proving, once and for all, the efficiency of third party infrast
Slide 2: Production Report to 31 July 2008
Production Report to 31 July 2008 For personal use only Project formally certified as complete 18 July 2008 • 4.2mt shipped • US$390m gross revenues including shipping • 229 rail journeys • 26 vessels loaded • All cargoes accepted Fortescue Metals Group Ltd DISCLAIMER Important Notice The purpose of
Slide 3: Executive Summary
Executive Summary For personal use only Multi-decade market growth drives strategy • Permanent growth in China, India and Asia drives FMG strategy • FMG has major reserves and resources with very strong exploration upside • World class production assets commencing g in the bottom q quartile of cost
Slide 4: Project Completion – July 2008
Project Completion – 18 July 2008 Mined Preparation Railed Loaded For personal use only Last 4 Weeks 2,035,400 t 2,334,020 t 2,017,309 t 2,007,368 t (21/06/08 – 18/07/08) TARGET EXCEEDED TARGET Actual 887,315 t EXCEEDED TARGET Actual 821,806 t TARGET EXCEEDED EXCEEDED Actual 671,238 t Actual 613,851
Slide 5: Surface miners hard at work
Surface miners hard at work For personal use only Heavy haul fast trains keep stockpiles working 5
Slide 6: Rolling stock exceeded expectations
Rolling stock (particularly wagons) have exceeded expectations For personal use only Train unloader step from Rail to Port working well 6
Slide 7: The Herb Elliot Port
The Herb Elliot Port, an iconic part of Australian Infrastructure For personal use only A massive footprint with built in expansion capacity 7
Slide 8: FMG: Australians working smart, working hard
FMG: Australians working smart, working hard For personal use only 8
Slide 9: Our raw material role in developing prosperity
Our raw material role in developing prosperity For personal use only Wearing the Fortescue Colours 18 9
Slide 10: China requires that Australia recover market share
Actual & Project Chinese Iron Ore Imports For personal use only China requires that Australia recover Market Share Chinese Im ports by Source 80.00% Infrastructure constraints limits 70.00% Australia, leads to falling market share 60.00% 50.00% Aust Brazil 40.00% India S.Africa 30.00% Others 20 00%
Slide 11: History remains the best guide to the future
History remains the best guide to the future For personal use only The growth engines of Asia need the Pilbara • No iron ore major has the expansion leverage of Fortescue • Australia is the most competitive supplier to Asia Sovereign Risk Location • Three companies globally set price and dominate th
Slide 12: Analysts prediction for relative operating costs
Analysts prediction for relative operating costs Iron Ore Cash Costs for 2009 - y p Mine y and Pellet by Company For personal use only • Saleable 90 Port Loading 80 Royalty Pellets Transport p ArcelorMittal P US$/dry tonne in real terms Cleveland-Cliffs Pellets Maintenance 70 US Steel Pellets Rio Ti
Slide 13: Hamersley Group Stratigraphy – Regional
Hamersley Group Stratigraphy – Regional For personal use only A B C Microband Lateral Continuity • A to B – 10m apart (adjacent holes 5 cm at Wittenoom Gorge) • B to C – 130 km apart (Wittenoom to Paraburdoo) (Ewers and Morris 1981) Project pipeline underpinned by geology • The largest bedrock hoste
Slide 14: FMG Pilbara Holdings Dwarfs Others
FMG Pilbara Holdings Dwarfs Others FMG – 52,000 sq. km, Rio – 11,000 sq. km, (Robe 5,000 sq.km) BHP – 6,500 sq. km For personal use only FMG Pilbara resources and targets to underpin the project pipeline Current Current Further Total Area Resources* Targets Potential Upside Chi h t Range Chichester
Slide 15: Product Quality Forecast
Product Quality Forecast For personal use only • Actual shipments for 2008: – 4.2mt shipped to 21 customers – Fe and SiO2 on target – Higher calcined Fe – More Rocket Fines produced than HG The FMG Mining Systems 15
Slide 16: Cloudbreak timelapse of construction
Cloudbreak timelapse of construction For personal use only 4 June 2007 to 18 July 2008 Mining operations Excavator in Overburden action trucks Surface miner in action OVERBURDEN ORE BODY Ore trucks ORE BODY 16
Slide 17: Surface miners well proven in operations
Surface miners well proven in operations For personal use only Daydream Pit Hayman Pit Note the flat, clean, tyre friendly pit floor 17
Slide 18: FY09 Mining Production – Overburden and Ore
FY09 Mining Production - Overburden For personal use only Waste Mined (BCM's) 7,000,000 70,000,000 6 000 000 6,000,000 60 000 000 60,000,000 5,000,000 50,000,000 Cum. BCM's 4,000,000 40,000,000 BCM's 3,000,000 30,000,000 2 000 000 2,000,000 20 000 000 20,000,000 1,000,000 10,000,000 0 0 Aug-08 Apr-0
Slide 19: Australia's leading iron ore and infrastructure construction team
Fortescue has Australia’s leading iron ore and infrastructure construction team For personal use only From Concept p y To Reality Fortescue Mine Site - 2007 Fortescue Mine Site - 2008 Cloudbreak Village – a new standard in Pilbara accommodation 19
Slide 20: Pilbara's longest corporate airfield
Pilbara’s longest corporate airfield For personal use only Major equipment maintenance shed 20
Slide 21: Ore on Cloudbreak mine conveyor
Ore on Cloudbreak mine conveyor from Surface Miner shuttle dump point For personal use only Screening plant 21
Slide 22: World's largest radial stacker commences operations
World’s largest radial stacker commences first operations For personal use only Stockpiles at Cloudbreak 22
Slide 23: The Delivery Systems – Port & Rail
The Delivery Systems – Port & Rail For personal use only Train Loader in operation 23
Slide 24: Cloudbreak – Loading Trains
Cloudbreak – Loading Trains For personal use only Fortescue’s operations team is proven From Concept To Reality Fortescue Rail Site - 2007 Fortescue Rail Site - 2008 24
Slide 25: 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 takes it to the next step: – Bigger carrying capacity – Electronic braking system – Aerodynamics • 40 tonne axle loads • Low centre
Slide 26: Port and loading systems
Port and loading systems For personal use only From Concept To Reality Fortescue Port Site - 2006 Fortescue Herb Elliott Port - 2008 Port Operations 26
Slide 27: State of the art port operations
State of the art port operations For personal use only Target - Lowest cost transport in the Pilbara Port • Significant expansion area • Highly automated • Extensive use of conveyors • Largest shiploaders in Australia Train unloader operating at design 27
Slide 28: Stacker & Reclaimer, ramping up
Stacker & Reclaimer, ramping up For personal use only First Ore On Ship – 15 May 2008 28
Slide 29: First commercial shipment arrives in China
Fortescue’s first commercial shipment arrives in China – 29 May 2008 For personal use only Advanced Expansion Planning 29
Slide 30: Expansion plan – Mine and Rail
55 - 120 - 160 mtpa – Mine For personal use only • Place mine material handling detailed design contract • Place mine processing detailed design contract • Mobilise construction camp at mine • Complete construction camp build at Christmas Creek mine • Start mine and port site construction • Complete
Slide 31: Expansion plan – Port
55 - 120 - 160 mtpa - Port For personal use only • Start dredging 3rd berth • Start dredging of 4th berth at port • Install 3rd wharf at port • Install 3rd stacker • Install 4th wharf at port • Commission Power Generation plant at port • Install and commission, conveyors, 2nd shiploader and 2nd recl