Nolan, from your own admission you have done well out of FMG, buying and holding and accumulating when there are dips, and you reap the benefits of Divi's and Franking credits, it is a perfectly sound strategy. it also means you have trusted Andrew Forrest's judgement along the way and his ability to create income. You appear not to agree with his strategy now however, and believe he is making a mistake in following green hydrogen. I and others have tried to point out that Pilbara iron ore has not been high grade enough to suit green steel production in the past, BHP blew about 4 billion dollars trying to create Direct reduced iron from Pilbara iron ore it did not work and they walked away.
Through the push for decarbonisation the big steel makers are switching to green hydrogen and need high grade ore to develop it. Twiggy says he can do it from Pilbara grade ore and is also into now mining magnetite also suitable for green steel production. RIO and Vale have high grade ore from Canada and Brazil and are cutting deals with green steel manufacturers elsewhere particularly Sweden.
Australia will lose billions and its competitive edge if it can't compete with other countries for the supply of the correct iron products for green steel. Twiggy gets it, he understands what is required to achieve profits and keep markets alive, he hasn't spilt his beans, he is very astute with a keen business sense, as share holders it is our choice to follow the money or not.
FMG Price at posting:
$20.10 Sentiment: Buy Disclosure: Held
(20min delay)