Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — CLSA China Forum 2007
21 slides from Fortescue's conference presentation, May 15, 2007
Slide 1: Lodgement of Presentation – ASX cover letter
Fortescue Metals Group Ltd Telephone: + 6 1 8 6 2 1 8 8 8 8 8 ACN: 002 594 872 Facsi mile: + 6 1 8 6 2 1 8 8 8 8 0 87 Adelai de Terrace East Perth Website: w w w . f m g l . c o m . a u Western Australia 6004 PO Box 6915, East Perth, Western Australia 6892 15th May 2007 The Companies Officer Austral
Slide 2: Iron Ore Supply – A Way Forward for China
Fortescue Metals Group Ltd Iron Ore Supply – A Way Forward for China Show Desktop.scf THE NEW FORCE IN IRON ORE CLSA China Forum, Shanghai 14 -16 May 2007 Fortescue Metals Group Ltd DISCLAIMER Important Notice The purpose of this presentation is to provide general information about Fortescue Metals
Slide 3: China Requires that Australia Recover Market Share
Fortescue Metals Group Ltd THE NEW FORCE IN IRON ORE CLSA China Forum, Shanghai 14 -16 May 2007 China Requires that Australia Recover Market Share Chinese Imports by Source 80% 70% 60% Aust 50% Brazil 40% India S.Africa 30% Others 20% 10% 0% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 200
Slide 4: Iron Ore Market and why China needs the Pilbara
Iron Ore Market and why China needs the Pilbara • Australia is the most competitive supplier to Asia Australian Ore US$56.90 • Three companies globally set price and South African Ore US$65.20 dominate the seaborne market Brazilian Ore US$72.10 • Fortescue plans to be the 4th major seaborne Indian O
Slide 5: Unparalleled Assets – Significant Reserves & Resources
Unparalleled Assets – Significant Reserves & Resources • One of the largest bedrock hosted iron ore discoveries in Australia • Ore reserves of 1.053 Bt, including proved ore reserves of 121 Mt, providing sufficient ore for approximately 20 year mine life at 45Mtpa HI reserve Robe resource HI resourc
Slide 6: Unparalleled Assets – Simple Mining Methods
Unparalleled Assets – Simple Mining Methods • Superior grade control techniques • Selective mining capability – Straight forward grade prediction from model and mapping – Textures and grades clearly visible after cutting Latest Project Highlights • Project completion forecast well within allocated f
Slide 7: Unparalleled Port Assets
Unparalleled Port Assets Port Hedland, Western Australia’s iron ore coast Critical Path Contract Dredging Completed 11 May 2007 Unparalleled Port Assets Looking inland towards Cloud Break Looking seaward over BHP’s port 6
Slide 8: Port Hedland Port Operations
Port Hedland Port Operations Train Unloader on Schedule 7
Slide 9: Rail Corridor
Rail Corridor Total Rail Line Cleared (260 kms) Rail earthworks on four separate construction fronts and all bridges underway East Turner River Bridge Concrete Piers 8
Slide 10: Permanent Camp – Cloud Break Mine
Permanent Camp – Cloud Break Mine Ore preparation facilities at Cloud Break • Mine bulk earthworks for ore preparation facility, airport and access roads advanced • Caterpillar, Terex and Wirtgen selected as principal mine fleet suppliers 9
Slide 11: Straightforward Construction
Straightforward Construction Construction Risk TODAY EXTREME • Multiple sites facilitate parallel construction • Contract risk spread – no single Ship contract >10% of total capex HIGH Commission Construction • Ample power and gas supply Tender Process • Well proven technical construction risk / Eng
Slide 12: Equipment - Mine and Trains
Equipment - Mine Allow 17 days shut-down p.a. CRUSHING & SCREENING PLANT Capacity Time Hours per Hour Utilisation per Year (tonne) Efficiency Rate (348 days) 7,500 0.90 0.90 8352 X 1 = 50.7 Mtpa UNIT CAPACITY: 50.7 Million Tonnes TRAIN LOADER – 16,000 tph 200 cars train 220 cars train 240 cars train
Slide 13: Equipment – Rail Track and Port
Equipment – Rail Track TRACK DESIGN CAPACITY: 40 Tonne Axle Load Loading Capacity per Car 40 x 4 = 160 tonnes Tare Mass per Car Approx. 22 tonnes CARRYING CAPACITY: In excess of 138 tonnes per Car Unloading rail steel Foundation of bridge Equipment - Port Allow 17 days shut-down p.a. DUMPER Capacity
Slide 14: Forecast to Complete Within Allocated Funds
Equipment - Port RECLAIMER Capacity Time Hours per Hour Utilisation per Year (tonne) Efficiency Rate (348 days) 13,500 0.79 0.55 8,352 X 1 = 49 Mtpa UNIT CAPACITY: 49 Million Tonnes SHIPLOADER Capacity Time Hours per Hour Utilisation per Year (tonne) Efficiency Rate (348 days) X 1 = 60.7 Mtpa 13,500
Slide 15: Blue Chip List of Suppliers and Partners
Blue Chip List of Suppliers and Partners • Laing O’Rourke – Rail Construction • Roche Mining – Outsourced Mining Operations • BGC – Rail Earthworks • GE – Locomotives • McConnell Dowell – Marine Structures • Thyssen Krupp – design of Stackers, Reclaimers and Shiploader • China to supply Wagons, Rail
Slide 16: Business Partnering Opportunities for FMG and Chinese Suppliers
Business Partnering Opportunities for FMG and Chinese Suppliers FMG’s 45 Mtpa project has created • US$300m of manufacturing export business for Chinese companies • One of the largest single export contract for Rail Wagons • Mining industry’s largest bulk material handling equipment order from China
Slide 17: FMG and Baosteel
FMG and • Off-take agreement – up to 20 mtpa for 10 years. • T45 – sold out – 100% contracted, with 5mtpa to Baosteel. • Underwrites future expansion beyond T45. • Major product endorsement for other global steel mills. • Technical program to optimise Fortescue ore for market. • Preferentially advan
Slide 18: Why a China Australia partnership?
Why a China Australia partnership? • The deep experience of FMG and Chinese manufacturers is creating synergies for both • FMG project expansion vision encourages a long-term partnership perspective for Chinese suppliers and customers • Co-operative creativity delivers innovation for both FMG and Ch
Slide 19: Offtake Growth – Target 110mtpa; Further Options
Offtake Growth – Target 110mtpa; Further Options CLOUD B REA K TEXTURE X / CC CHRISTM A S CREEK M T LEEUWIN WHITE KNIGHT FLINDERS SOLOM ON 180 160 140 120 Target 100 MTPA 80 60 40 20 0 Expansion planned – initial construction design Stage 1 – 45 mtpa First Ore On Ship May 2008 – 1 Berth – 1 Ship loa
Slide 20: Expansion planned – initial construction design
Expansion planned – initial construction design Stage 2 – 100 Mtpa+ – 3 Berths – 2 Shiploaders – 10 mt stockpile – Double rail loop – 2 x 2 car train unloader 1Km Expansion planned – initial construction design The Port T ra in U The most time critical nl o 110 a d er 180 Mpta Mpt 45 Mpta constructi
Slide 21: Conclusion
Conclusion • Huge reserve portfolio – initial mine plan +20 years • Products extensively trialed and 100% under contract • Open access port and rail infrastructure construction advanced • Operation underway mid May 2008 • Government and project partners fully committed • Expansion plans > 100 Mtpa a