Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — Diggers & Dealers Conference 2007
33 slides from Fortescue's conference presentation, Aug 8, 2007
Slide 1: ASX lodgement letter for presentation
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 For personal use only 8 August 2007 The Com
Slide 2: The New Force in Iron Ore
Fortescue Metals Group Ltd THE NEW FORCE IN IRON ORE For personal use only T ra in U nl o a d er Fortescue Port Footprint – 5km Diggers & Dealers Conference 8 August 2007 Fortescue Metals Group Ltd DISCLAIMER Important Notice The purpose of this presentation is to provide general information about F
Slide 3: “Isations” and the Perfect Storm
Fortescue Metals Group Ltd For personal use only “Isations” and the Perfect Storm Driving China’s Unprecedented Demand for Iron ore • Urbanisation • Industrialisation • Globalisation and now… • Privatisation Simultaneous macro-economic create the “PERFECT STORM” – larger and stronger than anything s
Slide 4: China’s Turning Point
China’s Turning Point For personal use only • Economy has reached turning point where consumer demand takes off • Under 40’s strong growth in use of credit, happy spenders! • Over 40’s saving like mad as no welfare safety net • This new Consumer demand will add a new layer of demand for steel • Appr
Slide 5: China needs the Pilbara
China needs the Pilbara For personal use only Australian ore US$66.10 • Australia is the most competitive supplier to Asia • Three companies globally set price and Brazilian Ore US$82.32 dominate the seaborne market • Fortescue plans to be the 4th major seaborne Source: CRU – 2007 Jan to May average
Slide 6: Massive Pilbara holdings
Massive Pilbara holdings 40,000 square kilometres For personal use only Unparalleled Assets – Significant Reserves & Resources • One of the largest bedrock hosted iron ore discoveries in Australia • Ore reserves of 1.1 Bt, including proved ore reserves of 120 Mt, providing sufficient ore for approxi
Slide 7: Unparalleled Assets – Shallow & Extensive Ore Body
Unparalleled Assets – Shallow & Extensive Ore Body For personal use only Ore Body Characteristics • More than 2.4Bt of high quality hematite resource, 1.1Bt reserve • Free digging over burden low cost removal • Mineralisation gently undulating - typical dip at 2° to 5° • Mineralised thickness varies
Slide 8: Unparalleled Assets – Competitive Cost
Unparalleled Assets – Competitive Cost For personal use only 60 Australian mines US cents/dmtu 50 Brazilian mines FMG mine 40 30 20 10 0 0 200 400 600 800 1000 Cumulative Production (mn wmt) (1) Site Operating Costs are those costs used to determine free cashflow and include raw material costs and c
Slide 9: The Old v The New
The Old v The New For personal use only OLD NEW The Telex Machine The Blackberry The Old v The New OLD NEW The Gramophone The iPod 8
Slide 10: The Old v The New – Mining Techniques
The Old v The New OLD For personal use only Mining Techniques The Old v The New NEW The Surface Miner 9
Slide 11: Mining Operations
Mining Operations For personal use only Surface Miners deliver more revenue at a lower mining cost per tonne First of 14 Surface Miners at work Fortescue Port Footprint – 5km 10
Slide 12: Why FMG chose Surface Miners over conventional equipment
Why FMG chose Surface Miners over conventional Pilbara equipment? For personal use only Surface Miner Drill / blast / shovel Benefits to bottom line Selective mining reduces More dilution from thin • Higher Fe grade and iron making quality dilution caused by thin waste waste seams product attracting
Slide 13: Why Surface Miners? Recruitment Update
Why Surface Miners? For personal use only • Super-hard and abrasive-resistant tungsten carbide picks in a rotating drum cut the ore • Surface miners weigh more than 100 tonnes and generate more than 1000 horsepower • Provides enormous breakout forces that easily “snap” the Chichester ore bodies Recr
Slide 14: Airport and Permanent Camp – Cloud Break Mine
Airport complete – Cloud Break Mine For personal use only Permanent Camp – Cloud Break Mine 13
Slide 15: Vibrating screens and Crushing Plant
First of 11 vibrating screens on way to Site For personal use only Crushing Plant Artist’s Impression 14
Slide 16: Crushing Plant and Screening Plant
Crushing Plant For personal use only Screening Plant Artist’s Impression 15
Slide 17: Screening Plant and Loading Vault
Screening Plant For personal use only Loading Vault Artist’s Impression 16
Slide 18: Mine construction at full speed
Mine construction at full speed For personal use only Rail Corridor Total Rail Line Cleared (260 kms) Rail earthworks on four separate construction fronts and all bridges underway 17
Slide 19: East Turner River Bridge
East Turner River Bridge Concrete Piers For personal use only East Turner Girder placement 18
Slide 20: Girder placement and locomotives
Girder placement For personal use only Fortescue’s construction locos at welding depot 19
Slide 21: Locomotives and rail track laying
Fortescue’s new locomotives exceed performance tests For personal use only Fortescue’s rail track laying underway 20
Slide 22: The Port
Fortescue’s rail track laying underway For personal use only The Port Port construction +45=100 ahead of schedule 100-200 mtpa mtpa with reclaim area of 55 mtpa 200+ mtpa capacity T55 train unloader 21
Slide 23: Port Hedland Port Operations
Port Hedland Port Operations For personal use only Unparalleled Port Assets Port Hedland, Western Australia’s iron ore coast Critical Path Contract Dredging Completed 11 May 2007 22
Slide 24: Wharf construction
Close-up of Fortescue’s wharf construction with BHPB Ship turning in the background For personal use only BHPB ship enjoying the dredged turning circle (as we will soon be enjoying theirs) 23
Slide 25: Train Unloader on Schedule; Marketing – Sold out
Train Unloader on Schedule For personal use only Marketing – Sold out • 55Mtpa contracted for minimum of 10 years • Approximately 40Mtpa contracted for “Fortescue Expansion” tonnage • All “top 10” Chinese Mills have agreements • The focus has been on agreements directly with mills who have approval
Slide 26: Major Market Developments since August 2006
Major Market Developments since August 2006 For personal use only • Price up 9.5% in 2007 and forecast to rise by 25% in 2008 • Indian export tax on 100mtpa China iron ore exports • Chinese Government evaluating domestic iron ore mining restructures • Major expansions from Rio, BHPB and CVRD all lat
Slide 27: Significant Project Liquidity
Significant Project Liquidity For personal use only 4,000 F.O.O.S. M illions Equity Raising 15/05/2008 (AUD) Cost Over-run & Back-up Reserve 3,500 Infrastructure Contingency Mining & Working Capital Infrastructure Costs Actual / Forecast 3,000 2,500 Instutional Equity raising of $500mAUD 2,000 1,500
Slide 28: Expansion program is being driven by demand
Expansion program is being driven by demand. For personal use only • All first phase 45mtpa contracted for 10 years + • Further 50mtpa contracted for expansion tonnage • Baosteel, Tangshan and several others FMG’s China Headquarters in Shanghai Progressive Growth Trajectory • Fortescue has built a t
Slide 29: Targeted Mineralisation; Optimising Project – 55mtpa
Targeted Mineralisation, all categories For personal use only CHICHESTER RANGE Targeted, Mt - Cloud Break ~ 1000 - Christmas Creek ~ 1570 - Mt Lewin Area ~ 300 - Mt Nicholas, Tongololo, Springo ~ 250 TOTAL 3,120 CENTRAL PILBARA - Flinders/White Knight ~150 - Solomon CID ~ 800 - Solomon Brockman ~150
Slide 30: Optimise Project; Port Expansion to 100 mtpa
Optimise Project – 55 mtpa First Ore on Ship For personal use only May 2008 2 Loading Berths 1 Ship loader 2.5mt stockpile Single loop 1 x 2 car train unloader Lumpcircuit 1Km Port Expansion to 100 mtpa 100 mtpa Anderson Point 3 berths 5mt stockpile Double loop 2x 2 car train unloaders 1Km 29
Slide 31: Expansion plan – 200 mtpa
Expansion plan – 200 mtpa For personal use only • From Targets to Resource Definition – Target in Chichesters (Eastern Pilbara) ~3.3 Bt. – Target in Central Pilbara > 1 Bt. • Expansion Target for Port Hedland is 200 mtpa – Port capacity for FMG, Cape and Panamax size vessels – Maximises port footpri
Slide 32: Railway expansion – Kennedy Line
Railway expansion – Kennedy Line For personal use only • Rail route to service FMG tenements with outstanding resource potential • S91 LAA Investigation licence has been granted • Finalising Native Title agreements • Investigating environmental approvals Port Hedland Point Samson Dampier Glacier Gla
Slide 33: The New Force in Iron Ore
& The New Force tn Iron Ore v 32
Fortescue Metals Group — Diggers & Dealers Conference 2007 on 6ix