Fortescue (company) — BrandWiki

Fortescue (company)

Overview

Fortescue

type	Public
traded as	asx: FMG
foundation	2003
location	Perth, Western Australia
area served	Worldwide
key people	Dino Otranto (CEO, Metals) Agustìn Pichot (CEO, Growth & Energy) Andrew Forrest (executive chairman) (majority shareholder)
isin	isin: AU000000FMG4
industry	Metals, mining and energy
products

Fortescue is a global metal mining company headquartered in Australia. Fortescue focused on iron ore mining under the name of Fortescue Metals Group (FMG) until July 2023.[2] As of 2017, Fortescue is the fourth-largest iron ore producer in the world.[3] The company has holdings of more than 87000 km2 in the Pilbara region of Western Australia, making it the largest tenement holder in the state,[4] larger than both BHP and Rio Tinto.[5]

Governance

As of Andrew Forrest is executive chairman and owns a third of the company.

subsid	Fortescue Energy Fortescue Metals FMG Resources Pty Ltd Ncz Investments Pty Ltd Pilbara Gas Pipeline Pty Ltd The Nullagine Joint Venture FMG Resources (August 2006) Pty Ltd Chichester Metals Pty Limited FMG Magnetite Pty Ltd Pilbara Marine Pty Ltd FMG Pilbara Pty Ltd Karribi Developments Pty Ltd FMG Solomon Pty Ltd FMG Iron Bridge Limited Fmg Pacific Limited

Mining projects

The group has two main areas of operation located within the Pilbara region of Western Australia, the Chichester Hub and Solomon Hub. Plans to develop a third, Western Hub were as of 2017 in developmental stage. In 2017 Fortescue started exploration of possible mining tenements in South America and other parts of Australia.[11] FMG engages professional lobbyists to represent their interests to parliaments in multiple jurisdictions. In South Australia, they are represented by Spring Street Advisory Pty Ltd.[12]

Chichester Hub

Located in the heart of the Pilbara, the Chichester Hub is made up of Fortescue's flagship minesite Cloudbreak and the second minesite Christmas Creek. The total Chichester Hub produces 90 million tonnes per annum (mtpa) of iron ore plus an additional five mtpa from a joint venture with BC Iron.[13]

Cloudbreak

Fortescue's first minesite Cloudbreak in 2013 mined 40 million tonnes of iron ore a year.[13] The horizontal nature of the deposits at Cloudbreak called for a new mining approach to those used at other mines which operate on vertical deposits of ore. Overburden removal is done using conventional blast, truck and shovel methods while specially designed surface miners cut and load the ore into trucks for transport to the run of mine stockpiles. Screening, crushing and desand plants at the Cloudbreak ore processing facility prepare and refine the product before the ore is stockpiled ahead of transport to port. The train loadout facility at Cloudbreak is capable of feeding 16,000 tonnes of ore per hour on the 2.7 km trains ready for the journey along the 256 km heavy-haul railway to the facilities at Herb Elliott Port.

Christmas Creek

Mining began at Christmas Creek, 50 km to the east of Cloudbreak, in May 2009. Subsequent expansion projects have lifted production capacity to 50 million tonnes per annum.[13] The operations at Christmas Creek are undergoing expansion and in late 2010 a fifty-kilometre extension to the existing Port Hedland to Cloudbreak rail line was completed to transport the ore to Cloudbreak. The first ore-processing facility (OPF) was commissioned at Christmas Creek in April 2011 with a second OPF commissioned in 2012. As part of the second expansion, a number of additional infrastructure projects were completed, including a 6.3 km overland conveyor, a new airstrip, an expansion of the power plant and increasing capacity at the operations village to 1,600 rooms.[13]

In January 2013, Fortescue awarded Macmahon Holdings a $1.8 billion mining services contract for its Christmas Creek mine expansion. The Christmas Creek expansion increases the capacity of the Chichester operations to 95 million tons a year, and was a key component of the company's 155-million-tonne-a-year expansion plans.[14]

Cloudbreak

Fortescue's first minesite Cloudbreak in 2013 mined 40 million tonnes of iron ore a year.[13] The horizontal nature of the deposits at Cloudbreak called for a new mining approach to those used at other mines which operate on vertical deposits of ore. Overburden removal is done using conventional blast, truck and shovel methods while specially designed surface miners cut and load the ore into trucks for transport to the run of mine stockpiles. Screening, crushing and desand plants at the Cloudbreak ore processing facility prepare and refine the product before the ore is stockpiled ahead of transport to port. The train loadout facility at Cloudbreak is capable of feeding 16,000 tonnes of ore per hour on the 2.7 km trains ready for the journey along the 256 km heavy-haul railway to the facilities at Herb Elliott Port.

Christmas Creek

Mining began at Christmas Creek, 50 km to the east of Cloudbreak, in May 2009. Subsequent expansion projects have lifted production capacity to 50 million tonnes per annum.[13] The operations at Christmas Creek are undergoing expansion and in late 2010 a fifty-kilometre extension to the existing Port Hedland to Cloudbreak rail line was completed to transport the ore to Cloudbreak. The first ore-processing facility (OPF) was commissioned at Christmas Creek in April 2011 with a second OPF commissioned in 2012. As part of the second expansion, a number of additional infrastructure projects were completed, including a 6.3 km overland conveyor, a new airstrip, an expansion of the power plant and increasing capacity at the operations village to 1,600 rooms.[13]

In January 2013, Fortescue awarded Macmahon Holdings a $1.8 billion mining services contract for its Christmas Creek mine expansion. The Christmas Creek expansion increases the capacity of the Chichester operations to 95 million tons a year, and was a key component of the company's 155-million-tonne-a-year expansion plans.[14]

Solomon Hub

Located in the middle of Fortescue's 87000 km2 Pilbara tenement area, the Solomon Hub was Fortescue's next major project. It has almost twice the resource and less than half the strip ratio of the Chichester Hub. Fortescue's Exploration team has already delineated more than 2.86 e9t of resource at the Solomon Hub and there are identified exploration prospects targeting up to 5 e9t. In May 2013, Fortescue officially opened its 20-million-tonne-per-annum (mtpa) Firetail mine at Solomon.[15] In December 2013, the company announced it had achieved first production from its 40 mtpa Kings Valley mine.[16]

The train load out (TLO) facility at Firetail was commissioned in November 2012 and the first ore was transported on the Fortescue Hamersley Rail Line in December 2012. In December 2012 Fortescue opened the 129 km Solomon Railway that connects Solomon to Fortescue's mainline to its port operations.[17]

A third operation within the Solomon hub, the Queens Valley mine, was approved for construction in 2019 at a projected cost of A$417 million. The mine, located 15 km west of the Kings Valley mine, is scheduled to open in 2022.[18]

Eliwana mine

In May 2018 Fortescue announced a US$1.28 billion development of a new mine in the Pilbara at the Eliwana site. This expansion will include an additional 143 km of railway and a dry ore processing plant capable of processing 30 million tonnes a year. The new mine is expected to have an 18-year lifespan and will be funded from the company's cash flow.[19]

The project is expected create 1,900 construction jobs and 500 permanent full-time positions with production expected to commence in 2020. The Eliwana mine is part of Fortescue's strategy to move to a 60 per cent iron-grade product.[19]

Iron Bridge mine

The Iron Bridge mine, located 145 kilometres south of Port Hedland, opened in 2023, sending slurry with 0.028 mm grains by pipeline 135 km to Port Hedland.[20] The mine is projected to produce 22 million tonnes of high-grade 67% magnetite per annum by 2026. The project is a joint venture between Fortescue and Formosa Steel, with Baosteel as a minority share holder.

BC Iron

BC Iron is a much smaller mining company with iron ore deposits at Nullagine. In 2009, the two companies entered into a 50-50 joint venture in which BC Iron manages mining, crushing and screening, and trucking while Fortescue is contracted to provide haulage and port services to the joint venture.[21] In December 2012 Fortescue sold a 25% stake to BC Iron Ore for A$190 million and agreed to increase the available capacity to the NJV on Fortescue's rail and port infrastructure from the existing 5 million tonnes per annum (mtpa), to 6 mtpa for the life of the joint venture.[22]

Atlas Iron

In June 2018 Fortescue announced the purchase of 15% of junior iron ore miner Atlas Iron. This brought Fortescue's ownership stakes up to nearly 20%. The acquisition of a controlling interest in Atlas Iron was planned to give Fortescue access to greater port capacity as well as additional higher-grade iron ore tenements. This also potentially allowed a move towards lithium production.[23]

This move was also potentially giving Fortescue access to the North West Infrastructure joint venture. This venture was a collaboration between Atlas Iron, Brockman Mining and FerrAus.[24]

In October 2018, however, Atlas was acquired by Redstone Resources, a fully owned subsidiary of Hancock Prospecting,[25] and delisted from the Australian Securities Exchange on 21 November 2018.[26]

Belinga, Gabon

In February 2023 Fortescue Metals Group inked in an agreement to develop iron ore at Belinga in north-eastern Gabon with a road and railway to an existing port of Owendo. The initial quantity of ore to be exported is 2 million tonnes of ore per year.[27]

Diversifying production

In 2017 Fortescue announced they were looking to diversify their portfolio by exploring for metals and minerals in South America and other parts of Australia. Gold, copper and lithium were highlighted as commodities of interest.[11]"'We continue to undertake early-stage, low-cost exploration on copper gold prospective tenements in South Australia and New South Wales and have assessed high-potential, early-stage exploration tenements in Ecuador, where Fortescue was granted 32 exploration areas.'[28]"

Gold, copper and lithium

Yindjibarndi legal case

Since 2008 Fortescue have been in a legal battle with the traditional owners of the Solomon Mine area, the Yindjibarndi people, where Fortescue (then FMG) acquired mining leases and has been mining since 2013.[52] When Fortescue started planning the Solomon Hub, it entered negotiations with the Yindjibarndi Aboriginal corporation. However, the relationship deteriorated in 2007 when the Yindjibarndi people discovered that FMG had the legal authority to destroy their sacred sites and was doing so during the mine's construction.[53]

After the corporation rejected FMG's royalty offer, the miner supported a breakaway group, the Wirlu-Murra Yindjibarndi Aboriginal Corporation, reportedly to facilitate Fortescue's approvals to mine. This group paid individuals $500 each to attend a meeting in 2010, where the deal was approved. Prior to this, the Yindjibarndi Aboriginal Corporation (YAC) had lodged its opposition to the grant of the three licenses to the Native Title Tribunal in 2009, initially failing to win orders preventing the grant of the licenses. The YAC also failed in its initial Federal Court appeal of that decision last year, and the state government issued the mining licenses to FMG in late November 2010. Both FMG and the YAC are now waiting on the results of a new appeal to the Full Bench of the Federal Court.[54][55] The company estimated the extraction of 2.4 billion tons of ore over the next 40 years, worth $280 billion, offering less than a deal struck by Rio Tinto that would provide $2 billion over 40 years.[56]

On 8 April 2011, Slater & Gordon, representing the Yindjibarndi Aboriginal Corporation in its negotiations with FMG, requested FMG compensate the Yindjibarndi community. In March 2011, FMG was accused of supporting a break-off group[57][58] to divide the local Yindjibarndi community during negotiations for access to traditional Yinjibarndi land for the planned $8.5 billion Solomon Hub project. While the law firm admitted FMG has put compensation money up, it said it was insufficient in comparison with the profits that will be made from this mine on the client's traditional land, as well as the royalty (tax) amounts that have been paid to non-Aboriginal people.[59]

In 2021 negotiations over an Indigenous Land Use Agreement failed, and as of the Yindjibarndi Aboriginal Corporation is leading a native title compensation claim in the Federal Court, asserting that FMG have been mining on Yindjibarndi land without an agreement. According to the National Native Title Tribunal, the Federal Court needs to make a determination on whether the community is eligible for "compensation for the loss, impairment, diminution or extinguishment of native title rights and interests in the area".[9]

As of 2023, Fortescue has not provided any compensation or received permission from the Yindjibarndi people to carry out mining on their land, despite them receiving permission from a larger local Aboriginal corporation, composed of most of the community leaders and elders. Fortescue's operations in the area have destroyed about 250 cultural and sacred sites.[60]

In 2024, the case between Fortescue and Yindjibarndi people continued in the Federal Court. A hearing was held in Roebourne and at a sacred site on Yindjibarndi country, called Bangkangarra, located in the Hamersley Range, in the Pilbara. The Federal Court was informed that a ceremony traditionally used to reconcile the Yindjibarndi people of the Pilbara after disputes has now been impacted by a division among the traditional owners.[61] During the court hearing on-country, a visibly upset Yindjibarndi elder testified before the Federal Court that Fortescue Metals Group had "stolen" and "destroyed" Yindjibarndi land.[52] Yindjibarndi elder Stanley Warrie wept as he directed Federal Court judge Stephen Burley to observe the red land, now marred by Fortescue’s large metal pipes on the outskirts of its iron ore pit.[52] Warrie told the Federal Court "Fortescue has stolen the land...This is my religion, and it’s been destroyed, my stories, my life. Yindjibarndi land is where my religion is."[52]

During the court case, a senior Yindjibarndi person testified that the land had been so disturbed that it no longer attracted birds, flora, fauna, and sources of traditional food. When asked why, the traditional owner pointed to a mine processing site and stated, "You can see what’s happening here, this infrastructure." He further explained that trucks and cars used at the mine site had disrupted the land.

The court then visited another location—a rock shelter with evidence of occupation dating back 35,000 years—situated beneath an iron ore haulage road. Justice Burnley remarked that he wanted the court to note the "constant and audible sound of vehicles" during the visit.[52]

Fortescue maintains that it does not owe compensation to the Yindjibarndi people, arguing that the responsibility lies with the state of WA, which granted the tenements. The WA government disagrees, asserting that the miner is solely responsible.

Both parties agreed that compensation is owed. This was conveyed to the court during a week-long hearing at the town hall in Roebourne, the same location where negotiations between the Yindjibarndi people and Andrew Forrest broke down in 2011.

Some Yindjibarndi people have stated that the divisions among family and community members resulting from the Fortescue case may be irreparable.[61]