Hi folks,I was just looking at Liebherr's FY23 Results:The...

Hi folks,

I was just looking at Liebherr's FY23 Results:

The Liebherr Group achieved record revenue of €14,042 million in 2023. This represents an increase of €1,453 million, or 11.5 %, compared with the previous year.

Have a look at the breakdown of their product segments (particularly "Mining" Fortescue is highlighted) and how well they performed despite macro market challenges.

The mining sector came in at €1,455 million up from previous year €1,227, representing an increase of €228 million or 18.6 % compared with the previous year.

Highest turnover of sales was in Asia and Oceania representing 65.1%. Last year it was 56.6%.

Reference https://www.liebherr.com/en/int/annual-report/development-and-outlook/development-and-outlook.html

Liebherr and Fortescue's vision and goals are very much aligned. They've been developing a range of zero emission, autonomous and digital solutions and the remainder of FY24 is going to be very interesting.

Which has me thinking a little more about our strategic partnership with Liebherr.

Here's the breakdown of capex over the next 3-4 years.

https://www.marketindex.com.au/news/fortescue-going-green-at-all-costs-twiggy-promises-to-remove-fossil-fuels-by

As you can see, US$1.3bn (21%) is going to be allocated towards their green fleet.

Let's just take the heavy haul trucks as the first example here.

We now know that Fortescue Zero emission drive trains will power 350 new Liebherr trucks. This is also in line with replacing their existing fleet.

A few on the forum have asked what do these trucks cost?

A while back I mentioned that I wasn't able to find any information on what Liebherr's T 264 truck costs, but what I did find and mentioned was that their T 282 series truck cost around $4-5 million per truck.

See here: https://en.wikipedia.org/wiki/Liebherr_T_282_series

Even if we take $5 million per truck, the figures don't add up to the actual capex spend, it goes way over.

350 heavy haul trucks x US$5 million = US$1,750,000,000 that's one billion seven hundred fifty million.

It would have to be at least half of that imv. The other question is, will all trucks be completely replaced or just retrofitted with new zero emission technology? That would most likely bring down the costs per haul truck as well.

Now this is where it gets really interesting.

If these trucks cost around $2.5 million (let's assume 50% less) a piece, those costs would come right down AND now that this strategic partnership is in place their plan is that Fortescue will be integrating their proprietary-owned power system into Liebherr’s proprietary-owned base trucks. Here's the kicker.... there's another piece to this puzzle. Their intention is to offer this solution to the heavy duty mobility market.

Do you see where I'm going with this? Any heavy haul truck sales worldwide will offset Fortescue's capex over the longer term, not to mention the annual cost savings of US$818m at prevailing market prices and the cumulative savings of US$3bn by 2030!

These guys are VERY switched on - a very significant business growth opportunity awaits.

Tony