Slide 1: Pilbara Operations Site Tour Presentation
For personal use only 6 October 2022 PILBARA OPERATIONS SITE TOUR PRESENTATION Fortescue Metals Group Ltd (Fortescue, ASX: FMG) hosts an investor and analyst site tour of its Pilbara operations on 6-7 October 2022, including a tour of the Solomon Hub and the Eliwana Operation. A copy of the Executiv
Slide 2: Pilbara Operations Site Tour
For personal use only Pilbara Operations Site tour We are Fortescue OCTOBER 2022 © 2022 FORTESCUE FORTESCUE | 1
Slide 3: Important Notice and Forward Looking Statements Disclaimer
Forward Looking For personal use only Important Notice Statements The purpose of this presentation is to provide general information about Fortescue Metals Group Ltd (“Fortescue”), including general information in relation to Fortescue’s wholly owned subsidiary Fortescue Future Industries Pty Ltd an
Slide 4: Safety and unique culture
For personal use only Safety and unique culture Total Recordable Injury Frequency Rate 7.6 6.0 1.8 TRIFR 10% 5.1 4.3 2.9 3.7 2.8 2.4 Total Recordable Improvement 2.0 1.8 Injury Frequency compared to Rate at 30 June 2022 30 June 2021 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FORTESCUE | 3
Slide 5: Mining and processing operations
Mining and processing operations For personal use only 3 mining hubs Hematite 4th under development Magnetite 6 OPFs Ore Processing Facilities FORTESCUE | 4
Slide 6: World leading infrastructure
World leading infrastructure For personal use only 760km rail Fast heavy haul railway 16 train sets 70 operating locomotives 5 berths 3 shiploaders – configuration optimises loadout FORTESCUE | 5
Slide 7: Energy independence underway (zero carbon)
Energy independence underway (zero carbon) For personal use only FORTESCUE | 6
Slide 8: Production and costs
Production and costs For personal use only Track record of operating excellence Iron ore shipments, mt C1 cost, US$wmt 189 178 182 44.10 169 170 170 168 165 33.84 124 27.15 81 15.43 15.91 12.82 13.11 12.94 13.93 12.36 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY13 FY14 FY15 FY16 FY17 FY18 FY
Slide 9: Optimising ore body
Optimising Extending mine life, ore body For personal use only increasing product grade Single source products West Pilbara Fines Kings Fines Fortescue Lump Blended products Fortescue Blend Fines Super Special Fines Iron Bridge Magnetite concentrate in FY23 FORTESCUE | 8
Slide 10: Iron Bridge
Iron Bridge For personal use only Huge differentiator in the Pilbara US$3.6 – US$3.8bn Capital estimate 67% Fe High grade magnetite concentrate 22mtpa First production in March 2023 quarter FORTESCUE | 9
Slide 11: Iron Bridge
Iron Bridge September 2022 For personal use only FORTESCUE | 10
Slide 12: Iron Bridge
Iron Bridge September 2022 For personal use only FORTESCUE | 11
Slide 13: World leading decarbonisation plan
World leading decarbonisation plan For personal use only • Achieve real zero (scope 1 and 2) across iron ore operations by 2030 • Announced at United Nations roundtable with the Secretary General • Science Based Targets Initiative (SBTi) to verify and audit • Estimated cumulative operating cost savi
Slide 14: Iron ore operations emissions
Iron ore operations emissions For personal use only FY30 projected Scope 1 and 2 emissions under business as usual (no decarbonisation strategy) OTHER 10% HAUL TRUCKS SCOPE 2 26% 11% ~3mt CO2-e RAIL – LOCOMOTIVES STATIONARY POWER 9% 25% OTHER HEAVY MACHINERY FY22 Scope 1 and 2 emissions excluding sh
Slide 15: Decarbonisation roadmap
Decarbonisation roadmap For personal use only Scope 1 and 2 emissions GREEN POWER GREEN FLEET GROSS CARBON EMISSIONS DEMAND RESPONSE 2022 2025 2026 2027 2029 2030 Pilbara Energy Connect Zero emission Battery/ammonia Upgrade to plant Electric/hydrogen Chichester Solar Gas Hybrid battery/hydrogen trai
Slide 16: Extremely competitive capital cost
Extremely competitive capital cost For personal use only Generating our own fuel source Maximum annual expenditure – US$1.5bn Capital investment – US$6.2bn Renewables, battery storage and infrastructure US$3.2bn Site based infrastructure US$0.9bn Demand response US$0.8bn Green fleet US$1.3 bn FY23 F
Slide 17: Attractive operating cost savings
Attractive operating cost savings For personal use only US$818m* cost savings from elimination of: Carbon offsets • Displacement of approximately 700 million 7% Gas litres of diesel 9% Diesel 84% • Displacement of approximately 15 million GJ of gas • Elimination of carbon offset purchases wherever p
Slide 18: Our approach to sustainability
Our For personal use only approach to sustainability People Building sustainable communities Planet Safeguarding natural systems Process Operating with integrity FORTESCUE | 17
Slide 19: Sustainability reporting suite
Sustainability reporting suite For personal use only FORTESCUE | 18
Slide 20: Reporting and ESG assessments
Reporting and ESG For personal use only Voluntary standards and principles for transparent reporting assessments ESG performance measures and benchmarking FORTESCUE | 19
Slide 21: Driving down costs with green energy
Driving down costs with For personal use only green energy Real zero by 2030 Decarbonising our operations Net zero scope 3 emissions by 2040 Science based Commitment to SBTi FORTESCUE | 20
Slide 22: Native Title land areas
Native Title land areas For personal use only FORTESCUE || 21 FORTESCUE
Slide 23: Protecting Aboriginal heritage
Protecting For personal use only Aboriginal heritage Seven agreements with Native Title groups in the Pilbara region Co-management framework with the Wintawari Guruma Aboriginal Corporation >6,100 heritage sites protected and avoided FORTESCUE | 22
Slide 24: For personal use only
For personal use only FORTESCUE | 23
Slide 25: Creating positive social change
Creating positive social For personal use only change Creating opportunities through training, employment and business development >A$4bn in contracts to Aboriginal businesses and joint ventures through Billion Opportunities since 2011 1,100 Aboriginal people employed since 2006 through VTEC FORTESC
Slide 26: Disciplined capital allocation
Disciplined capital allocation For personal use only Fortescue’s capital allocation is based on four key pillars FORTESCUE | 25
Slide 27: Robust balance sheet
Robust balance sheet For personal use only Future capacity to support growth Gross debt (US$m) Debt maturity profile excluding leases (US$m) 6,103 Syndicated Term Loan Senior Unsecured Notes 5,113 Green Senior Unsecured Notes 1,500 4,252 3,975 3,952 1,000 800 750 700 600 FY18 FY19 FY20 FY21 FY22 FY2
Slide 28: Robust balance sheet: credit metrics
Robust balance sheet For personal use only Credit metrics below target range Gross debt to EBITDA (x) Gross gearing (%) Target: 1-2x Target: 30-40% 1.2 29 27 28 26 19 0.7 0.6 0.6 0.3 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 FORTESCUE | 27
Slide 29: Delivering returns to our shareholders
Delivering returns to our For personal use only shareholders FY22 fully franked dividends of A$2.07 per share, representing a 75% payout of NPAT Dividends (A$/share) and payout ratio (%) 4.50 78% 80% 85% 77% 75% 4.00 75% 3.58 3.50 62% 65% 52% 3.00 55% 2.50 38% 45% 36% 2.07 2.00 1.76 35% 1.50 21% 21%
Slide 30: FFI capital allocation
FFI capital allocation For personal use only US$500 – US$600m FY23 anticipated operating expenditure US$230m FY23 anticipated capital expenditure 10% of NPAT Capital allocation US$1.1bn Capital commitment unutilised FORTESCUE | 29 FORTESCUE | 29
Slide 31: FFI strategy overview: green technology
FFI strategy overview For personal use only A global green energy, technology and development company Green technology • Key enabler of iron ore operations decarbonisation • Developing zero emission haul truck power system technologies • Developing infinity train • >250 patents and applications FORT
Slide 32: FFI strategy overview: green manufacturing
FFI strategy overview For personal use only A global green energy, technology and development company Green manufacturing • Green Energy Manufacturing centre, Queensland • Stage 1: 2GW capacity electrolyser manufacturing facility • Future capability to manufacture renewables equipment, systems and i
Slide 33: FFI strategy overview: green energy projects
FFI strategy overview For personal use only A global green energy, technology and development company Green energy projects • Project identification and development • 120 development projects across 40 countries • Wind, solar, hydro and geothermal resources • Gibson Island progressing to FEED FORTES
Slide 34: FFI strategy overview: green market development
FFI strategy overview For personal use only A global green energy, technology and development company Green market development • Supplying green energy and products globally • Agreement with E.ON to deliver up to 5mtpa of green hydrogen • Developing world leading green hydrogen energy import facilit
Slide 35: FY23 guidance
FY23 guidance For personal use only US$2.7 – US$3.1 bn Capital expenditure, excluding FFI 187 – 192mt Iron ore shipments US$18.00 – US$18.75/wmt C1 cost for hematite Guidance is based on an assumed FY23 average exchange rate of FORTESCUE | 34 AUD:USD 0.70
Slide 36: Solomon Hub
For personal use only Solomon Hub FORTESCUE | 35
Slide 37: Solomon Hub site tour overview
Solomon Hub site tour overview For personal use only FORTESCUE | 36
Slide 38: Solomon Hub overview
Solomon Hub For personal use only overview 70mtpa Two Ore Processing Facilities and three mining areas Product mix Super Special Fines, Fortescue Blend, Kings Fines 27km Mining footprint FORTESCUE | 37
Slide 39: Solomon Hub overview
Solomon Hub For personal use only overview Queens conveyor 8.7km long, equivalent to using 12 trucks 78 autonomous haul trucks Largest autonomous haul truck deployment 0.8 million km/month Distance travelled by the autonomous fleet FORTESCUE | 38
Slide 40: Solomon Hub safety performance
Solomon Hub For personal use only safety performance 1.1 TRIFR Total Recordable Injury Frequency Rate at 30 June 2022 26% Exposure reduction improvement compared to 30 June 2021 16 months Total Recordable injury free for shutdowns FORTESCUE | 39
Slide 41: Solomon Hub building a diverse workplace
Solomon Hub building For personal use only a diverse workplace Championing diversity 16% 13% 24 Female employment Aboriginal people VTEC trainees employed in employment FY22 FORTESCUE | 40
Slide 42: Solomon Hub mining overview
Solomon Hub mining overview For personal use only Mine locations and major projects Queens FTN09 & Diversion Barrier Wall KFR ROM FTN10 Ramps West Stage 2 Project Relocation Queens Firetail Diversion East North Trinity Firetail South FTS Joffre Access Cut FTS04 Ramps Kings TSF Wall Stage 1 Pinnacle
Slide 43: Solomon Hub operations
Solomon Hub For personal use only operations Mobile maintenance facility >200 HME assets, >620 ancillary assets Queens hydraulic barrier wall Protection of cultural heritage and environment FORTESCUE | 42
Slide 44: Solomon Power Station
Solomon For personal use only Power Station 160MW gas engine Designed for hybrid and renewable energy integration Battery Energy Storage Systems Two units across operations totalling 57.5MVA Additional grid reserve Continuous power solutions FORTESCUE | 43
Slide 45: Eliwana Operations
For personal use only Eliwana Operations FORTESCUE | 44
Slide 46: Eliwana site tour overview
Eliwana site tour overview For personal use only FORTESCUE | 45
Slide 47: Eliwana overview
Eliwana For personal use only overview 30mtpa Dry Ore Processing Facility Product mix West Pilbara Fines and Fortescue Blend 70km Eliwana mine footprint FORTESCUE | 46
Slide 48: Eliwana overview
Eliwana For personal use only overview ~250m Proposed depth of West End pit 143km Rail connecting Eliwana to Solomon Hub Flying Fish Development underway FORTESCUE | 47
Slide 49: Eliwana safety performance
Eliwana For personal use only safety performance 3.7 TRIFR Total Recordable Injury Frequency Rate at 30 June 2022 16% Exposure reduction improvement compared to 30 June 2021 14 months Total Recordable injury free for Mobile Maintenance FORTESCUE | 48
Slide 50: Eliwana building a diverse workplace
Eliwana building a For personal use only diverse workplace Championing diversity 23% 14% 8 Female employment Aboriginal people VTEC trainees employed in employment FY22 FORTESCUE | 49
Slide 51: Eliwana mining overview
Eliwana mining overview For personal use only FORTESCUE | 50
Slide 52: Eliwana operations
Eliwana For personal use only operations Low capital intensity US$46/tonne for mine and rail Low profile design Capacity to direct load onto trains up to 10,300 tonnes per hour Plant reliability Average OPF daily available time of 22.6 hours FORTESCUE | 51
Slide 53: Eliwana OPF ramp up
Eliwana OPF For personal use only ramp up Production and nameplate capacity (mtpa) (A$/wmt) 40 75 35 30 50 25 20 15 25 10 5 0 0 Mar-21 Mar-22 Feb-21 Nov-21 Dec-21 Feb-22 Jun-21 Jul-21 Jan-22 Jun-22 May-21 Aug-21 Sep-21 May-22 Apr-21 Oct-21 Apr-22 Annualised production Nameplate capacity Unit Cost Ra
Slide 54: We are Fortescue
For personal use only We are Safety Integrity Fortescue Family Enthusiasm Empowerment Courage and determination Frugality Generating ideas Stretch targets Humility FORTESCUE | 53