Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — Diggers and Dealers 2017
25 slides from Fortescue's conference presentation, Aug 8, 2017
Slide 1: Diggers and Dealers 2017
For personal use only Diggers and Dealers 2017
Slide 2: Forward looking statements
Forward looking statements For personal use only Important Notice Additional Information The purpose of this presentation is to provide general information about This presentation should be read in conjunction with the Annual Report at 30 Fortescue Metals Group Limited ("Fortescue"). It is not recom
Slide 3: Building a world class company
Building a world class company For personal use only Committed to supporting strong and vibrant communities Safety focus First ore Low cost Engagement Empowerment in 2008 producer Leadership Core supplier to China 170mt Shipped over Production rate 880mt Unique culture 3
Slide 4: Generating shareholder value
Generating shareholder value For personal use only Focus on safety, productivity and efficiency • Operational performance • Market strategy • Capital discipline • Long life resources • Shareholder returns 44
Slide 5: Our Vision: The safest, lowest cost, most profitable iron ore producer
Our Vision: The safest, lowest cost, most profitable iron ore producer v Fortescue i Determination The New Force in Iro! Set yourself stretch targets Enthusiasm Empowerment Generating ideas
Slide 6: Delivering on our targets in FY17
Delivering on our targets in FY17 For personal use only Sustainable cost reduction and consistent production TRIFR 170.4mt $12.16/wmt 2.9 Shipped for FY17 C1 cost for June Quarter 33% reduction 170mt for FY18 $11-12 for FY18 US$1.8bn US$2.7bn 21% Cash on hand Debt repaid Net gearing 6
Slide 7: Sustainable cost improvements
Sustainable cost improvements For personal use only Initiatives delivering long term low cost outcomes US$/wmt 60 Structural optimisation improvements 48 Solomon + Blending + Processing 50 44 40 34 Productivity + Efficiency 30 27 Utilisation, Recoveries, Maintenance 20 15 12.82 11 10 Innovation + Te
Slide 8: Maintaining position on the cost curve
Maintaining position on the cost curve For personal use only China's Iron Ore Supply CFR Costs (including royalties & ocean freight) 2012 2017 Source: Metalytics – March 2017 8
Slide 9: Innovation
For personal use only Innovation 9
Slide 10: Generating ideas for future innovation
Generating ideas for future innovation For personal use only People, processes and techniques are the catalyst for innovation • Exploration • Integrated Operations Centre • Mine planning and optimisation • Harnessing automation • Low cost, relocatable conveyor • Fortescue Ore Carriers • Data process
Slide 11: World class autonomous haulage operation
World class autonomous haulage operation For personal use only Building on our success and expanding to the Chichester Hub Improved 56 20% Increase in safety Operating at Solomon productivity +12 converted Chichester Expansion 100 trucks 390mt converted Autonomously moved at Solomon over 3 years 11
Slide 12: Market
For personal use only Market
Slide 13: Core supplier to Asia
Core supplier to Asia For personal use only Well established 17% market share of imported iron ore to China Total 2016 global steel production 1,629mt • Low impurity 58% Fe average • Competitive value in use 541 • Large diverse customer base 808 • Responsive to market needs 79 96 105 • Proximity to
Slide 14: China's 13th Five Year Plan (2016-2020)
China’s 13th Five Year Plan (2016-2020) For personal use only RMB12.5 trillion for ~ 11,000 listed projects New power 3,000km 152,000km New urban projects rail lines Roads in rural areas +480,000 MW 80% cities Pipelines Over 50 with high civilian + speed rail airports gas storage Source: China Daily
Slide 15: Developing and emerging Asia
Developing and emerging Asia For personal use only Asian economies generating two thirds of global growth Source: IMF World Economic Database Oct 2016 15
Slide 16: Iron ore inventory levels
For personal use only Mt 60 20 40 80 0 100 120 140 160 180 Jul-10 Sep-10 Nov-10 Jan-11 Source: Bloomberg and Umetal Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Iron ore inventory levels Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-
Slide 17: Reserves and resources
Reserves and resources For personal use only
Slide 18: Focus on core iron ore business
Focus on core iron ore business For personal use only Largest tenement in Pilbara with 18.3bt in mineral resources, including 6.7bt in magnetite 18
Slide 19: Active in exploration
Active in exploration For personal use only Future low cost optionality • Targeting copper and gold New South Wales • ~2,000km2 tenure South Australia • ~6,000km2 tenure South America • 32 concessions in Ecuador • Covering ~1,300km2 19
Slide 20: Building strong communities
Building strong communities For personal use only
Slide 21: Diverse workforce representing our communities
Diverse workforce representing our communities For personal use only Creating opportunities through training, employment and business development 21
Slide 22: Focussed strategy
For personal use only Focussed strategy
Slide 23: Key strategic focus
Key strategic focus For personal use only Ensuring communities benefit from the growth and development of Fortescue Debt repayment and capital flexibility Long term sustainability of iron ore Returns to shareholders Create low cost growth options - Leverage skills and culture - Exploration a
Slide 24: Together we are Fortescue
Together we are Fortescue For personal use only Our vision is to be the safest, lowest cost, most profitable iron ore producer Sustainable low cost World class producer assets & people Customer focus Unique culture Reliable drives performance Competitive 24
Slide 25: For personal use only
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