POWER!!!! Fortescue Future Industries, page-4563

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TonyIndo

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05/09/24

23:25

Post #: 75551535
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Originally posted by TonyIndo: ↑

Whilst all the negativity on price and iron ore whoha continues, this is what/where I put my attention on.

I just listened to the H2 2024 investor transcript call again and picked up some great gems in there, particularly from the Q&A session. For those that don't have the app, download it on Google Play Store it's called Quartr and key in Fortescue.

Here's what stood out for me...

Green Iron Project

Fortescue's vision in the longer term is to convert all their iron ore into green iron metal or circa 100mt of their hematite operations. They were saying that it would give them a lot of rail and port capacity back, which in effect gives them a lot of options to either ramp up their hematite in the balance or other options, which would give them a lot of flexibility in their flow sheet.

Their immediate focus is to make sure their Christmas Creek Iron Ore facility is working. They have to prove at a larger scale that they can and will produce that green iron. They're testing a number of different paths to green iron i.e., a higher iron grade metal out of Australia, but they went on to say that the KEY to green iron is to get those renewable energy costs down, and as such they're also looking around the world where those renewable energy costs are low enough for them to look at investments of green iron plants even. BUT their first step is in Australia, with their lower to mid grade hematite iron ore out of the Pilbara. Why? Because they said that that step really hasn't been done before. The current green iron projects around the world utilise a very high grade feed and they were saying that there's not many places around the world that produce that and that there's going to be a real challenge with that option. Fortescue see an enormous and endless opportunity to develop a green iron ore metal industry in Australia. They also mentioned that they don't see blending with a higher grade volume globally at the right cost point, which is competitive to the hematite position that they have in Australia. Low to mid grade product is KEY to creating a 95%+ green iron product. That's their goal.

Re Green Ammonia Projects

Norway (approx 200,000 tonnes of ammonia with cost around the low US$1bn mark from a capex perspective and note the grant from the EU commision $200m euro) and Brazil, Pecem would be next and it's going to be three times the size of the Norway project.

Details will be given once they go through the Board process and get approval they will give the market more information.

Morocco and Oman will follow those and they will be much much bigger than all of the projects listed above.

The guidance for Capex this year for Energy is US$500m which has been consistent with last year.

They said that the intention with these projects is get bank debt in at 50-60% at finanacial close, and then sell down some of the equity before they spend all the capex on the projects, so it really gives us an idea of what the outlay might be over the course of between 3-5 years. I was also pleased to hear that they won't be using their own capital for all those projects. All of the projects on the table are subject to FID first and foremost.

All the best folks.

Tony

Expand

Re Brazil, here you go. Last paragraph peeps.

https://www.seatrade-maritime.com/ports-logistics/cear-brazil-plans-green-hydrogen-hub-for-export

Tony

FMG Price at posting: $16.13 Sentiment: None Disclosure: Held
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POWER!!!! Fortescue Future Industries, page-4563

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