Ann: Management and Organisational Update, page-96

Completely understand the premise that green hydrogen plants may not be viable when energy prices are at all time highs, however I'm still coming to a verdict on what this means for the business moving forward and how it affects my investment thesis. I'm stuck between what seems like some short term & abrupt changes by management but also understand that there are so many factors weighing in on this that are out of their control - a key reason why moving into this venture in the first place was always a risk, and comparatively much higher risk than their existing iron ore business which has way less moving parts at this stage of the businesses life.

One issue I have is that they are potentially halting the build out of green hydrogen plants and all the infrastructure required to run them them based on energy prices 'now' in certain regions - comments made by management recently seemed to address the 'now' as opposed to the 'future'. It is stated on Fortescue's own website that many of these projects will not come online for years to come if they receive approval, for example some production dates off their website - Arizona 2026, Washington 2028, Michigan 2025-2030, Holmaneset (Norway) 2027.

Lets hope the feasibility studies are correct if they choose to stay in, or pull out of a regions projects. I pity whoever has to determine and forecast energy prices out to 2030+ whilst also determining the demand for green hydrogen globally as an energy source, global supply of green hydrogen coming online and to market from Fortescue plus its competitors, government policy in the prospective regions (which is also prone to change term by term as we've seen in the US & Australia already) - all which plays part in making this whole equation work.

I can understand it is extremely hard to make a long term investment and calls out to 2030+ in a climate where Fortescue is not in control of both the energy market globally, let alone back in Australia, and you have global governments flip flopping between policies with incentives based around renewables / hydrogen / energy with what seems to be the attention span of a goldfish recently. All these uncertainties don't seem to be on Fortescue's side at the moment, and with conviction from the top faltering & these job cuts it puts the future into question.