Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — G100 Conference (May 2015)
29 slides from Fortescue's conference presentation, May 20, 2015
Slide 1: G100 Conference
G100 Conference For personal use only Nev Power, May 2015
Slide 2: Disclaimer
Disclaimer For personal use only Important Notice The purpose of this presentation is to provide general information about Fortescue Metals Group Limited ("Fortescue"). It is not recommended that any person makes any investment decision in relation to Fortescue based on this presentation. This prese
Slide 3: Building a world class company
Building a world class company Reliable and competitive supplier to Asia For personal use only • Founded in 2003 • First ore 2008 • Low cost producer • Over 500mt shipped • 165mt production rate • Unique culture 3
Slide 4: For personal use only
For personal use only
Slide 5: For personal use only
For personal use only
Slide 6: The safest, lowest cost, most profitable iron ore producer
ee @} UJ R VIS I @) The safest, lowest cost, Fortescue most profitable iron ore producer Our Values Family e fy, Frugality 5 = . Empowerment Rn] a . Ke oO (e) & Integrity wv D Fortescue Ps Enthusiasm Dy Generating ideas Determination Set yourself stretch targets
Slide 7: Safety is at the heart of Fortescue's family values
Safety is at the heart of Fortescue’s family values “My brothers’ / sisters’ keeper” For personal use only • Safety Priorities 1 Look after yourself 2 Look after your mates • Engagement active participation • Empowerment to make decisions • Encouragement to speak up • Leadership strong and visible 1
Slide 8: Operating performance – March Quarterly
Operating performance – March Quarterly Cost and efficiency focus For personal use only 40.4mt C1 $25.90/t Shipped 9% improvement 160-165 mtpa US$1.8bn cash on hand Annualised run rate C1 $18/t US$39/dmt FY16 Guidance Breakeven price 23
Slide 9: Costs reduction journey
Costs reduction journey Delivering reduction in the total cost of operations For personal use only 90 8 9 6 60 9 7 18 5 6 6 18 4 20 16 2 All in cost per wmt, inc 4 interest + sustaining capex 13 2 30 10 4 50 2 Delivered cost 39 7 33 34 30 25 C1 – mining processing rail 18 and port - 1HY13 2HY13 1HY1
Slide 10: Break-even Price
Break-even Price Continuing to reduce breakeven price on 62% Platts equivalent basis For personal use only US$ 50 USD:AUD of 0.77 5 39 40 3 2 31 30 4 2 0.5 25 5 20 18 10 - C1 Shipping Royalty Admin Delivered cost Interest Sustaining Total wmt cost Moisture Price Breakeven to China capex adjustments
Slide 11: Completion of US$2.3bn refinancing
Completion of US$2.3bn refinancing No repayments until June 2019 with flexibility for early repayments For personal use only 5,000 4,500 4,876 4,000 3,500 3,000 US$m 2,500 2,000 Extended runway to first maturity 1,500 2,300 1,000 1,050 1,000 500 0 CY2015 CY2016 0 CY2017 CY2018 CY2019 CY2020 CY2021 C
Slide 12: Iron ore market
For personal use only Iron ore market
Slide 13: Core supplier to China
Core supplier to China China GDP growth 7%+ For personal use only • Optimised product range • High value in use low impurity product • Large diverse customer base • Strong long term growth • 300 million people to urbanise 19
Slide 14: Iron ore supply in balance…sentiment driving price
For personal use only Days Coverage 10 20 30 40 50 0 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Source: Bloomberg and Umetal Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Port stocks at lowest level s
Slide 15: Iron ore futures trading
Iron ore futures trading For personal use only 16
Slide 16: Iron ore price fall is damaging Australia's economy
Iron ore price fall is damaging Australia’s economy For personal use only • 17% fall in iron ore price in March 2015 $8 billion in Australian export receipts • For every dollar the price falls $910 million in the economy $300 million in federal taxes $56 million in State royalties
Slide 17: Moving down the global cost curve
Moving down the global cost curve China's 2015 Iron Ore Supply CFR Costs (including royalties & ocean freight) For personal use only 150 China Domestic concentrate Australia Brazil India South Africa Other 100 US$/dry tonne Brazil Pellets *China Domestic 66% Fe *Pellet 65% Fe 50 *Fines 65% Fe Other
Slide 18: Global cost curve - 2012
Global cost curve - 2012 For personal use only 200 Domestic Chinese Ore Australia Brazil US$/dry tonne CFR equivalent India 150 South Africa Other 100 Current 62 Fe index price Fortescue 50 0 0 100 200 300 400 500 600 700 800 900 1,000 Cumulative mt (wet, as delivered) Source: Metalytics prepared Ma
Slide 19: Market power in seaborne iron ore
Market power in seaborne iron ore The most concentrated global commodities market For personal use only 51% of iron ore Market is more Rio and BHP supply is from concentrated combined have Australia than OPEC 37% of market Market concentration percentage in seaborne iron ore based on 2014 trade data
Slide 20: Building an innovative culture
Building an innovative culture For personal use only
Slide 21: Our Vision and Values
> OUR VISION testes Fortescue most profitable iron ore producer Our Values ‘ Safety + Working together to be global safety leaders + We care about the health and wellbeing of people oaialgat fie adhiale DARTS + lam my brothers’ and sisters’ keeper - not just your part + Be committed as one + Celebra
Slide 22: Innovation focus on key projects & processes
Innovation focus on key projects & processes For personal use only • AP5 berth adds flexibility and future growth • Autonomous haulage • Fortescue River Gas Pipeline lowers energy costs • Iron Bridge Magnetite a new innovative process • ”Have A Crack” tapping our full potential 23
Slide 23: Port – flexible design for future growth
Port – flexible design for future growth For personal use only 24
Slide 24: Solomon Autonomous Trucks
Solomon Autonomous Trucks For personal use only • Increased safety • Increased productivity • Greater asset utilisation • Planned for future growth • Extending to full haulage fleet 25
Slide 25: Fortescue River Gas Pipeline
Fortescue River Gas Pipeline Stage 1 – to Solomon Hub For personal use only 26
Slide 26: Iron Bridge North Star Magnetite Project
Iron Bridge North Star Magnetite Project For personal use only • Developing magnetite project • JV Partners Formosa and Baosteel • Innovative processes to reduce energy • Australia can develop cost effective and viable magnetite projects, borrowing technologies from other industries 27
Slide 27: Have a Crack Initiative
Have a Crack Initiative For personal use only
Slide 28: The New Force in Iron Ore
The New Force in Iron Ore For personal use only • Low cost producer 165mtpa • World class hardware + software • Innovation in delivery of projects and processes • Unique culture drives performance 29
Slide 29: For personal use only
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