Fortescue Metals Group

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FY23 
ANNUAL 
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The driving force  
for our green future

Our Values will never change

Fortescue's unique Values drive our performance in a way  
that sets us apart from others

Culture
Fortescue is a values-based business with a strong, differentiated 
culture. We believe that by leveraging the unique culture of our 
greatest asset, our people, we will achieve our stretch targets 

Safety

Family

Empowerment

Frugality

Integrity

Enthusiasm

Courage and  
determination

Generating 
ideas

Stretch targets

Humility

To view the full suite 
of reports

FY23 Climate Change 
Report

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FY23 
CLIMATE 
CHANGE 
REPORT

FY23 Sustainability 
Report

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SUSTAINABILITY 
REPORT

FORTESCUE  FY23 SUSTAINABILITY REPORT    |    1

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FY23 Corporate 
Governance Statement

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FY23 
CORPORATE 
GOVERNANCE 
STATEMENT 

Scan the QR code for 
more information:

CONTENTS

01 Overview

02 Operating and financial review

05

28

03 Ore Reserves and Mineral Resources 47

04 Our approach to sustainability

05 Corporate governance

06 Our approach to climate change

07

Directors' report
 |    Remuneration report

08 Financial report

09 Corporate directory

57

62

65

70

109

172

Important note

This report should be read in its entirety, together with the Forward 
Looking Statement Disclaimer at the back of this report.

Acknowledgement of Country

Fortescue acknowledges the First Nations people of the lands upon which 
we live and work. We acknowledge their rich cultures and their continuing 
connection to land, waters and community. We are proud to work, partner 
and engage with First Nations people. We pay our respects to the culture and 
people, their Elders and leaders, past, present and emerging.

Colour Inspiration

The Fortescue journey by artist Bobbi Lockyer.

The Kariyarra, Ngarluma, Nyul Nyul and Yawuru artist and designer 
created a vibrant painting that reflects our journey.

The colours used throughout the report are inspired by this painting.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
In its short history, Fortescue has accomplished what was 
judged as impossible: to build a company from a start-up to 
a global leader in metals and energy

2003
THE 
DREAM
BEGINS 

2004
Cloudbreak 
identified

2005
S&P/ASX  
200 index

2006
Port Hedland
ground-breaking

2007
First iron ore sales 
agreement with Baosteel

Mining commenced at 
Cloudbreak 

2014
Kings Valley 
project 
opened at 
Solomon

2015
Anderson Point  
Berth 5 completion 
Fortescue River Gas 
Pipeline completion

2017
Expansion  
of autonomous 
haulage to  
Chichester Hub

2018
1 billion tonnes of ore 
shipped 

2019
Opening of Judith Street 
Harbour in Port Hedland 

First sod turn for  
Eliwana project 

REAL ZERO

Real Zero refers to no fossil fuels and no offsets. 

We have a costed plan to decarbonise our Australian terrestrial iron ore operations in the Pilbara 
by 2030. At the time of this report, Fortescue has identified the solutions it plans to adopt to 
eliminate approximately 90% of terrestrial Scope 1 and 2 emissions from its Australian iron ore 
operations. We are actively working to identify solutions for the final approximately 10%. 

We are also finalising our plan for how to eliminate Fortescue’s remaining Scope 1 and 2 
emissions from across our operations, including Fortescue Energy. 

From FY24 onwards, Fortescue will no longer buy voluntary carbon offsets unless required 
by law, as offsets have been shown to be troubled by extensive concerns about quality, lack of 
additionality and an inability to deliver real reductions in emissions.

Through Fortescue Energy, we are also going to give the world an alternative to fossil fuels. 

FORTESCUE  FY23 ANNUAL REPORT    |    2

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2008
First ore on ship

2010
Christmas Creek 
expanded  

2011
Solomon  
construction 
begins

2012
Autonomous 
haulage begins  
at Solomon 

2013
Firetail opened  
at Solomon

2020
New FMG office  
in Shanghai 

Fortescue Hive, 
Integrated Operations 
Centre opens

2021
Research and 
Development 
Facility established 
at Hazelmere

2022
Acquisition of   
Fortescue WAE

First ore in processing 
plant at Iron Bridge

THE JOURNEY
CONTINUES

2022
Construction commences 
on the Green Energy 
Manufacturing Centre in 
Gladstone, Queensland

Target set to achieve  
Real Zero, Scope 1 and  
2 emissions from our 
Australian terrestrial iron 
ore operations by 2030

2023
Iron Bridge celebrates 
first ore on ship

First ore loaded to train 
and delivered to  
Port at Belinga Iron 
Ore Project in Gabon

Fortescue celebrates 
20th Anniversary

Important note: Renewable technology supply chains are not yet zero emission. Fortescue is committed to working 
towards decarbonising the full supply chain.
FORTESCUE  FY23 ANNUAL REPORT    |    3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FY23 Highlights

Iron ore shipped

C1 cost

192.0

million tonnes

US$17.54

/wet metric tonne

Cash on hand

Net debt

US$4.3

billion

US$1.0

billion

Underlying net profit 
after tax

Total global  
economic contribution

US$5.5

billion

A$26.3

billion

OVERVIEW
2023

01

Iron Bridge achieves 
first production
Fortescue has produced first 
concentrate at the Concentrate 
Handling Facility in Port Hedland for 
our Iron Bridge Magnetite Project.

EXECUTIVE 
CHAIRMAN’S  
MESSAGE

2023 has been the year of convincing observations

We have seen the highest ocean temperatures on record. 
The lowest levels of Antarctic Sea ice ever observed and 
at time of writing, sea ice that should have been the size of 
Western Australia not replaced as usual during the Antarctic 
winter.

The hottest June on record, peaking at 1.69˚C above pre 
industrial era and our hottest year. July 2023 was also the 
hottest month on record, over 1.5°C warmer on average 
than in pre-industrial times. Work has had to stop in parts 
of China and New York was shrouded in orange smoke as a 
record area of Canada burned.

Over the next five years, the world has a 66 per cent chance 
of passing 1.5˚C for one or all years. These scenes are already 
our new normal and the higher temperatures rise, the worse 
they will become.

We sit at the tipping point of global warming and global 
mindsets – one that will see decarbonisation shift abruptly 
from a “nice to have” to essential to our existence.

Fortescue chose to lead the world through our unique 
decarbonisation and green energy strategy and expansion 
into new, global iron ore markets.

In June 2023, our Belinga project delivered first ore on 
train – just four months after the convention was signed. 
This massive project will one day be among the largest iron 
ore mines in the world and will complement our Australian 
operations, enhancing our blended products and opening 
new global markets.

“Forty years ago, Professor 
James Hansen at NASA 
wrote that policy wouldn’t 
change ‘until convincing 
observations of the global 
warming are in hand’.”

ANDREW FORREST

FORTESCUE  FY23 ANNUAL REPORT    |    6

OverviewConcentrate 
Handling 
Facility

In May, Fortescue also launched its first high-grade 
magnetite project, Iron Bridge, with a maiden concentrate 
grade of over 68% far exceeding our target of 67%.

Fortescue has also made some extraordinary achievements 
in 2023 accelerating towards our 2030 Real Zero target to 
eliminate fossil fuels from our mine sites and provide global 
customers with a fully green iron ore product.

In June, our first battery electric haul truck arrived at 
Christmas Creek. Roadrunner brings several firsts, including 
the ability to fast-charge in 30 minutes and capacity to 
regenerate power as it drives downhill.

Later this year we will have our first hydrogen fuel cell haul 
truck prototype on site for similar testing.

In May, our retrofitted locomotive, nicknamed Locommonia, 
arrived at Solomon to undergo field tests. Our 75 metre-long 
Green Pioneer, which could be the world’s first ammonia-
fuelled industrial ship, is set to complete final tests in coming 
months.

This four-stroke diesel engine has been modified to run on 
green ammonia and it has taken our team just one year to 
develop.

The shipping and fertiliser industries alone will be huge 
markets for green ammonia. In March, Fortescue Future 
Industries joined forces with the Government of Kenya to 
commence development of a major 300MW green ammonia 
and green fertiliser project, powered by a geothermal field.

In March, we also announced a pilot plant that can process 
iron ore into green iron at low temperatures using just 
electricity – no coal. It could revolutionise the steel industry, 
which currently emits 11 per cent of global CO2.

Global partnerships, particularly with China and India, will be 
key to our success. China, with its highly developed robotics 
and automation, is where electrolyser production could 
come down the cost curve significantly as it enters the era of 
machines making machines.

Australia, once the green laggard, is now ahead of the curve 
with a A$2 billion financial package for green hydrogen 
launched in May that will see it leapfrog other countries.

According to the latest report by Deloitte, the green 
hydrogen market is forecast to exceed the value of liquid 
natural gas by 2030. Up to 85 billion tonnes of CO2 could be 
saved by 2050 through by the hydrogen industry – roughly 
twice global emissions in 2021.

Renewable energy and green hydrogen are set to play a very 
big part of our overall earnings in the future. But change 
takes a huge amount of courage.

We have new horizons, new possibilities, new markets – and 
new competitors. The next five years will not be easy, but 
they will cement Fortescue’s position as a world leader and 
the global provider of green metals, green energy and green 
solutions.

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Roadrunner

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FORTESCUE  FY23 ANNUAL REPORT    |    8

Chichester Hub

OverviewMESSAGE FROM 
FORTESCUE 
METALS CEO

“Demand for green iron 
ore, green steel and 
critical minerals such as 
copper, lithium and rare 
earths is soaring. Demand 
for steel alone is set to  
rise over 60 per cent in  
the next 25 years.”

DINO OTRANTO

Twenty years ago, Fortescue 
was created to address a gap 
in the marketplace

China was developing at a massive and unprecedented pace 
in human history and needed iron ore. 

Today, we are the world’s fourth largest iron ore producer, 
valued at more than A$60 billion. Since 2013, our loyal 
shareholders have received over A$32 billion in dividends.

I intend to build on this foundation to realise the opportunity 
ahead for green metals and green energy.

This strong foundation is evident through Fortescue’s 
operating excellence, which continues to drive strong results 
across our key metrics of safety, production and cost. 

This year, Fortescue again delivered record shipments of  
192 million tonnes, achieving the top end of market guidance. 
Importantly, we achieved this safely, maintaining  
a Total Recordable Injury Frequency Rate of 1.8. 

We see a new, significant and unprecedented market growing.

Demand for green iron ore, green steel and critical minerals 
such as copper, lithium and rare earths is soaring. Demand for 
steel alone is set to rise over 60 per cent in the next 25 years. 

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Solomon Mine 
Ore Processing 
Facility

FORTESCUE  FY23 ANNUAL REPORT    |    9

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We have always moved ahead of the markets. Twenty years 
ago, Fortescue started out as a low-grade producer. With 
Eliwana and Solomon, we transitioned into mid-grade. 
In 2023, we have added for the first time a high-grade, 
premium iron ore magnetite product to our portfolio. 

Iron Bridge is Fortescue's most innovative iron ore project. 
Surpassing expectations with an iron ore grade of over 
68% on its first run, Iron Bridge will ultimately be Australia’s 
largest magnetite project – and, once we connect it to 
Pilbara renewable energy, Australia’s first magnetite project 
to operate using renewable energy by 2030.

In addition to the value opportunity of magnetite is the 
Belinga high-grade hematite project in Gabon, on the west 
coast of central Africa. We loaded first ore to train in June 
2023 which keeps us on track to deliver the first shipment 
of iron ore from Gabon by the end of 2023 – less than a year 
after the signing of the Mining Convention. Studies continue 
to advance potential designs of a large-scale development. 

In 2023, Fortescue continued to make progress towards 
decarbonising the steel production process and helping 
to address our customers emissions, evident through 
partnerships such as our Memorandum of Understanding 
with the world’s largest steelmaker, China Baowu Steel 
Group Corporation, to work together on reducing emissions 
associated with iron and steelmaking.

We are also positioning ourselves for success in critical 
minerals, which are essential to electric vehicles, batteries, 
magnets, wind turbines, solar panels, electrolysers and 
energy efficient technologies like LEDs. Demand for these 
minerals is set to grow.

It is through these innovations and efficiencies that 
Fortescue is positioned well and we will continue to apply  
this in everything we do as we transition from being an  
iron ore business into a global metals and green energy 
company. 

Iron Bridge 
Project

FORTESCUE  FY23 ANNUAL REPORT    |    10

OverviewMESSAGE FROM 
FORTESCUE 
ENERGY CEO

We are in climate change today. 
We are at 1.5⁰C now.  
Not 2050, it's now

Over the past 50 years we have completely trashed the 
planet. I hear people talking about "saving the planet". The 
planet will be just fine without us. It's humankind that needs 
to be saved. But what is wrong with the world? They see it. 
They hear it. They feel it. But the world does nothing. 

The only way we can reverse climate change is to stop fossil 
fuels now. Every day we continue to release more emissions 
into the atmosphere, the worse the situation will get. Beyond 
1.5⁰C we have no idea what will happen. No one has any idea.

The reason the world stares at climate change and does 
nothing, is because it doesn’t know what to do. The world 
needs a solution to fossil fuels. That's us. That's green 
hydrogen.

We are the butterfly effect, because when we show the world 
that we can make green hydrogen at scale, the world will 
banish fossil fuels forever.

Fortescue’s prescient decision to lead business towards the 
green ‘light on the hill’ was validated in 2023 by a landslide 
of climate policies signalling a global rush towards green 
hydrogen and its derivatives. 

This time last year there were no major green energy 
incentives in place globally.

“The reason the world stares 
at climate change and does 
nothing, is because it doesn’t 
know what to do. The world 
needs a solution to fossil 
fuels. That's us. That's green 
hydrogen.”

MARK HUTCHINSON

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Fortescue's first 
prototype battery 
electric truck, 
Roadrunner, onsite 
in  the Pilbara

FORTESCUE  FY23 ANNUAL REPORT    |    11

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Gladstone Electrolyser 
Manufacturing Facility

Today, the USA has the US$370 billion Inflation Reduction 
Act, which provides up to US$3 per kilogram of production 
tax credits to green hydrogen manufacturers. Australia has 
the recent A$2 billion Hydrogen Headstart package focused 
on green hydrogen. In June, the European Union signed into 
law its Delegated Act on green hydrogen.

Our products will be essential to decarbonising the ‘toughest 
third’ of emissions – steel production, long haul flights, 
global shipping, fertilisers. Green hydrogen will also play 
an essential role in energy storage and firming power as 
countries continue to focus on energy security. 

In 2023, Fortescue has prioritised certain green energy 
projects in response to growing global demand. We are 
focused on our target of bringing up to five of these projects 
to Final Investment Decision (FID).

In the United States, we have announced our first major 
move following the passage of the Inflation Reduction Act, 
investing US$24 million to acquire a 100 per cent interest in 
the Phoenix Hydrogen Hub.

In Norway, we have secured a second power agreement in 
the Bremanger Municipality for our planned 300MW green 
hydrogen and green ammonia facility in Holmaneset. 

Meanwhile in Australia, we are aiming to open our A$114 
million Green Energy Manufacturing Centre in Gladstone, 
Queensland by early 2024, which will produce electrolysers. 

Lastly, in the UK, we are driving forward an advanced 
batteries and electric powertrain manufacturing facility 
to enable decarbonisation of haul trucks, trains and other 
heavy industry equipment. 

The green energy and green hydrogen market has the 
potential to create significant growth for Fortescue. The 
latest report by Deloitte¹ estimates that green hydrogen 
alone will be worth more than liquid natural gas by 2030. 

Private equity investment in clean hydrogen grew 460 per 
cent, from less than $1 billion to $5 billion between 2019 and 
2022. Climate investments in general will reach US$9 to  
$12 trillion annually by 2030, according to McKinsey². 

The Hub is a proposed green hydrogen project located 
in Arizona, with Phase One planned to be an 80MW 
electrolyser and liquefaction facility, capable of producing up 
to 12,000 tonnes of liquified green hydrogen annually. 

The demand for fossil fuel free energy is here – and 
Fortescue is leading the way. As a first mover, we will 
benefit first and create greater value for you, our valued 
shareholders. 

Science and Research 
team, Balcatta Research 
and Development Facility

¹https://www.deloitte.com/global/en/about/press-room/new-deloitte-report-emerging-green-hydrogen-market.html

²https://www.mckinsey.com/capabilities/sustainability/our-insights/climate-investing-continuing-breakout-growth-through-uncertain-times

FORTESCUE  FY23 ANNUAL REPORT    |    12

OverviewOUR BOARD

Fortescue has a talented and diverse Board committed to 
enhancing and protecting the interests of shareholders and 
other stakeholders and fulfilling a strong governance role

Dr Andrew Forrest AO
Executive Chairman

Mark Barnaba AM CitWA

Lead Independent Director/ 
Deputy Chair

Elizabeth Gaines

Executive Director and  
Global Ambassador Fortescue

Lord Sebastian Coe CH, KBE
Non-Executive Director

Penny Bingham-Hall
Non-Executive Director

Dr Jean Baderschneider
Non-Executive Director

Yifei Li
Non-Executive Director

FORTESCUE  FY23 ANNUAL REPORT    |    13

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The appointment and reappointment of directors is intended to maintain and 
enhance the overall quality of the Board through a composition that reflects a 
diversity of skills, ethnicity, experience, gender and age.

The primary driver for the Board in seeking new directors 
is skills and experience that are relevant to the needs of the 
Board in discharging its responsibilities to shareholders. All 
new Board members benefit from a comprehensive induction 
process that supports their understanding of Fortescue’s 
business. 

Fortescue’s policy is to assess all potential Board candidates 
without regard to race, gender, age, physical ability, sexuality, 
nationality, religious beliefs, or any other factor not relevant to 
their competence and performance. 

There is also a range of support given to Board members that 
enables them to stay strongly connected to Fortescue, its 
culture and Values. 

This includes: 

•  Opportunities for significant contribution to the annual 
strategy setting process conducted with executive and 
senior management. 

•  Regular briefings from executive and senior management 
regarding all major business areas, tailored site visits and 
annual site tours to operations.

•  Visits to meet with key customers that strengthen their 

understanding of the Company’s key markets.

•  Regular formal and informal opportunities for the directors 

to meet with management and staff.

The Board has established committees to assist in the 
execution of its duties and to ensure that important and 
complex issues are given appropriate consideration. The 
primary committees of the Board are the Remuneration 

and People Committee, the Audit, Risk Management and 
Sustainability Committee, the Nomination Committee and the 
Finance Committee. 

Each committee has a non-executive Chair and operates 
under its own Charter which has been approved by the Board. 

Directors are expected to act independently and ethically and 
comply with all relevant requirements of the Corporations Act 
2001, ASX Listing Rules and the Company’s Constitution.

Fortescue actively promotes ethical and responsible 
decision-making through its Values and Code of Conduct  
and Integrity that embodies these Values. 

The Board and each of its committees have established a 
process to evaluate their performance annually. The process 
is based on a formal questionnaire covering a range of 
performance topics. The process is managed by the Company 
Secretary under the direction of the Lead Independent 
Director. The most recent review was undertaken in July 2023. 

The results and recommendations from the evaluation of 
the Board and committees are reported to the full Board for 
further consideration and action, where required. 

At the date of this report, the Board has five non-executive 
directors and two executive directors, being Dr Andrew Forrest 
AO, Fortescue's Executive Chairman, and Ms Elizabeth Gaines, 
Executive Director and Global Ambassador Fortescue. The 
Board believes that an appropriate mix of non-executive and 
executive directors is beneficial to its role and provides strong 
operational and financial insights to support the business.

FORTESCUE  FY23 ANNUAL REPORT    |    14

OverviewOUR BOARD

Dr Andrew Forrest AO 

Mark Barnaba AM CitWA 

Executive Chairman

Lead Independent Director / Deputy Chairman

Executive Chairman and Founder of Fortescue, Minderoo 
Foundation, and Tattarang

Deputy Chairman since November 2017; Lead 
Independent Director since November 2014;  
Non-Executive Director since February 2010

Dr Andrew Forrest AO is a global business leader and 
philanthropist. Through Fortescue, Tattarang and Minderoo 
Foundation, Dr Forrest is dedicated to leading the world to 
address the climate crisis and step beyond fossil fuels through 
green metals and green energy. 

Fortescue, a US$40 billion listed natural resources company, 
is developing major green energy and green metals projects 
across the world. Fortescue has developed some of the world’s 
most efficient and low-cost mining infrastructure and is the 
only heavy industry company globally with a fully costed plan 
to reach Real Zero emissions – elimination of fossil fuels and 
offsets – from its Australian iron ore operations by 2030.

Squadron, a wholly owned portfolio company of Tattarang, 
is Australia’s largest renewable energy owner, operator 
and developer and will build one third of the Australian 
Government’s target to source 82 per cent of its power from 
renewables by 2030. With dozens of projects in the pipeline, 
Squadron will deliver more than 20 gigawatts of firmed 
renewable energy, most of which will be in this decade.

Renewable technologies are facing an urgent critical mineral 
shortage, particularly in nickel, lithium and copper. Dr Forrest’s 
Wyloo Metals, a wholly owned portfolio company of Tattarang, 
seeks to accelerate strategic metal supply globally and is 
developing three of the best nickel sulphide belts in the world 
outside of Russia.

While Dr Forrest believes that some challenges can only be 
met through business, led by responsible government – for 
example, global warming – the philanthropy, Minderoo 
Foundation, that he established in 2001, through an endowment 
that now exceeds AU$7.6 billion, focuses on radical solutions to 
human rights, ocean health, Indigenous disparity and equality 
for women and girls. 

Dr Forrest is a highly active supporter of Ukraine and has led 
the Ukraine Development Fund alongside BlackRock. He has 
a PhD in Marine Ecology, serves as an IUCN Patron of Nature 
and was appointed an Officer of the Order of Australia for 
distinguished service to philanthropy, mining, employment, 
and sustainable foreign investment. In 2016, he served as 
a Councillor of the Global Citizen Commission, which was 
charged by the UN to modernise the 1948 Universal Declaration 
of Human Rights.

In 2013, Dr Forrest was appointed by the Australian 
Government Department of the Prime Minister and Cabinet to 
lead the country’s response to tackling indigenous disparity, 
leading to the Forrest Review’s publication in 2014. Dr Forrest is 
also Co-Chair of the Australia-China Senior Business Leaders’ 
Forum and a Board Member for the Boao Forum.

Committee memberships:  
Nomination Committee (Member) and Finance Committee 
(Member)

Mr Barnaba is an Independent Director with a broad 
range of international experience in finance, commerce 
and natural resources. He has extensive and particularly 
diverse experience at board level in both the for-profit 
and non-profit sectors. He is currently a member of the 
Board (and Chairman of the Audit Committee) of the 
Reserve Bank of Australia and the Deputy Chairman and 
Lead Independent Director at Fortescue. In 2015,  
Mr Barnaba was named a Member of the General Division 
of the Order of Australia for significant service to the 
investment banking and financial sector, to business 
education and to sporting and cultural organisations. 

Mr Barnaba also chairs the Hospital Benefit Fund (HBF) 
Investment Committee. Mark is also a member of the 
Board of The Centre for Independent Studies. He has 
previously chaired several publicly listed Australian 
companies within the mining and infrastructure sectors 
along with chairing non-profits including the State 
Theatre Company of Western Australia and AFL club, the 
West Coast Eagles. 

In his previous career, Mr Barnaba founded, led and sold 
two companies - GEM Consulting and Azure Capital (both 
independent corporate advisory firms which provide 
financial, corporate and strategic advice to public and 
private organisations in the Asia-Pacific region). He also 
held several senior executive roles at Macquarie Group 
(one being the Chairman and Global Head of the Natural 
Resources Group). He previously worked at McKinsey 
& Company in their London, Johannesburg and Sydney 
offices. 

Mr Barnaba was the Inaugural Chairman of the University 
of Western Australia Business School Board from 2002 
to 2020 and serves as an Adjunct Professor in Finance. 
He holds a Bachelor of Commerce (First Class Honours 
and University Medal) from the University of Western 
Australia, an MBA from Harvard Business School (Baker 
Scholar) and has an Honorary Doctor of Commerce 
from the University of Western Australia. He has lived in 
Australia, the United States, Italy, the United Kingdom 
and South Africa and is married with two children.

Committee memberships:  
Audit, Risk Management and Sustainability Committee 
(Chair), Nomination Committee (Member), Remuneration 
and People Committee (Member) and Finance 
Committee (Chair)

FORTESCUE  FY23 ANNUAL REPORT    |    15

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OUR BOARD

Elizabeth Gaines

Lord Sebastian Coe CH, KBE 

Executive Director and Global Ambassador

Non-Executive Director

Non-Executive Director since February 2018

Lord Coe is currently a Non-Executive Director of the Vitality 
Group of health and life insurance companies. In 2017, he 
became Chancellor of Loughborough University having 
previously served as Pro Chancellor of the University. 

Based in Monaco, Lord Coe is the Non-Executive Chairman 
of CSM Sport and Entertainment, within the Chime 
Communications group as well as Non-Executive Director 
of Vitality Health Ltd and Allwyn Entertainment AG. He 
was elected President of the International Association of 
Athletics Federations in 2015 (now World Athletics) where 
he is driving significant governance reforms through the 
organisation and its 214 Member Federations around the 
world. He is currently serving his second term as President.  
He was elected as a member of the International Olympic 
Committee in 2020, and became a director of the British 
Olympic Association at that time, having previously served 
as Chairman of the British Olympic Association from 2012  
to 2016.

Lord Coe previously served as Chairman of the Organising 
Committee for the London 2012 Olympic Games and 
Paralympic Games. He was a member of the British athletics 
team at the 1980 and 1984 Olympic Games where he won 
two gold and two silver medals, as well as breaking twelve 
world records.

In 1992, Lord Coe became a Member of Parliament and 
during his political career served as a Government Whip 
and then Private Secretary to William Hague, Leader of the 
Opposition and Leader of the Conservative Party. He was 
appointed to The House of Lords in 2000 having resigned  
in 2022.

Committee memberships:  
Nomination Committee (Chair), Remuneration and People 
Committee (Member)

Former Chief Executive Officer/Managing Director from 
February 2018 to August 2022. Former Executive Director from 
February 2017 to August 2022 and July 2023 to current. Former 
Non-Executive Director from February 2013 to February 2017 
and September 2022 to June 2023

Ms Gaines led Fortescue as Chief Executive Officer and 
Managing Director from February 2018 to August 2022, 
after joining the Executive team as Chief Financial Officer in 
February 2017.

A highly experienced business leader, Ms Gaines has 
extensive international experience in all aspects of financial 
and commercial management. Ms Gaines has significant 
experience in the resources sector and exposure to the 
impact of the growth in Asian economies, particularly China, 
on the Australian business environment and economy as 
well as a deep understanding of all aspects of financial and 
commercial management at a senior executive level in both 
listed and private companies.  Ms Gaines has extensive 
exposure to the drive to transition to green energy and has 
been a key driver of the goal to decarbonise Fortescue’s 
mining operations by 2030.

Elizabeth is a part time Executive Director and Global 
Ambassador for Fortescue. She is a Non-Executive Director 
and Deputy Chair of Greatland Gold PLC, a Non-Executive 
Director of the Victor Chang Cardiac Research Institute 
and a Non-Executive Director and Deputy Chair of the West 
Coast Eagles (AFL) Football Club.

Ms Gaines was ranked second in the 2019 Fortune 
Magazine’s Businessperson of the Year and in 2020 the 
Chamber of Minerals and Energy of Western Australia 
awarded her the ‘Women in Resources Champion’ at the 
annual Women in Resources Awards. In 2020, Ms Gaines  
was awarded Joint Australian Business Person of the Year  
by the Australian Financial Review.

Ms Gaines is a former Chief Executive Officer of Helloworld 
Limited and Heytesbury Pty Limited and has previously held 
Non-Executive Director roles with Nine Entertainment Co. 
Holdings Limited, NEXTDC Limited, Mantra Group Limited 
and ImpediMed Limited.

Ms Gaines holds a Bachelor of Commerce from Curtin 
University, a Master of Applied Finance from Macquarie 
University and an Honorary Doctorate of Commerce from 
Curtin University. She is a Fellow of Chartered Accountants 
Australia and New Zealand, and a member of the Australian 
Institute of Company Directors and Chief Executive Women.

Committee memberships:  
Remuneration and People Committee (Member) and 
Finance Committee (Member)

FORTESCUE  FY23 ANNUAL REPORT    |    16

OverviewOUR BOARD

Dr Jean Baderschneider  

Penny Bingham-Hall  

Non-Executive Director

Non-Executive Director

Non-Executive Director since January 2015

Non-Executive Director since November 2016

A highly regarded leader in both business and civil society, 
Dr Baderschneider brings 35 years of extensive international 
experience in procurement, strategic sourcing and supply 
chain management along with a deep understanding 
of high-risk operations and locations and complex 
partnerships.

Dr Baderschneider retired from ExxonMobil in 2013 where 
she was Vice-President of Global Procurement. During her 
30-year career, she was responsible for operations all over 
the world, including Africa, South America, the Middle East 
and Asia.

A past member of the Board of Directors of the Institute for 
Supply Management and the Executive Board of the National 
Minority Supplier Development Council, Dr Baderschneider 
also served on the boards of The Center of Advanced 
Purchasing Studies and the Procurement Council of both 
The Conference Board and the Corporate Executive Board.

Dr Baderschneider is the President of the Board of Trustees 
of The President Lincoln's Cottage and a member of the 
Abraham Lincoln National Council of Ford's Theatre.  In 
addition, she is on the Board of Directors of the Nizami 
Ganjavi International Center, the Board of Directors of the 
McCain Institute and is a Commissioner on the United 
Nations and Liechtenstein's Financial Sector Commission 
on Modern Slavery. With over 15 years of experience working 
on anti-human trafficking efforts globally, she served on the 
Board of Directors of Polaris, Made in a Free World and Verite 
and is currently a Founding Board member and Chair of the 
Global Fund to End Modern Slavery.

Dr Baderschneider was a Presidential appointee to the 
US Department of Commerce's National Advisory Council 
on Minority Business Enterprises and is a past recipient 
of Cornell's Jerome Alpern Award and Nomi Network's 
Corporate Social Responsibility Award.  She holds a Masters 
Degree from the University of Michigan and a PhD from 
Cornell University.

Committee memberships:  
Audit, Risk Management and Sustainability Committee 
(Member)

Ms. Bingham-Hall has over 30 years’ experience in senior 
executive and non-executive roles in large ASX listed 
companies. She is a Non-Executive Director of Dexus 
Property Group, Supply Nation and the Crescent Foundation. 
Ms. Bingham-Hall is also Chair of Vocus Group, Taronga 
Conservation Society Australia and the Advisory Committee 
of the Climate Governance Initiative Australia.

Ms. Bingham-Hall has worked in the construction, 
infrastructure, mining and property industries across 
Australia and the Asian region. She has a particular interest 
in environmental sustainability, workplace safety and 
indigenous employment. Prior to becoming a company 
director, Ms. Bingham-Hall was Executive General Manager, 
Strategy at Leighton Holdings (now CIMIC) - Australia’s 
largest construction, mining services and property 
group. As part of the leadership team at Leighton she had 
responsibilities across the group’s Australian and Asian 
operations.

She is a former director of BlueScope Steel Limited, Australia 
Post, Port Authority of NSW and Macquarie Specialised Asset 
Management. Ms Bingham-Hall was also chair of the NSW 
Freight and Logistics Advisory Council and Deputy Chair and 
Life Member of the Tourism & Transport Forum.

Ms. Bingham-Hall has a Bachelor of Arts degree in Industrial 
Design, is a Fellow of the Australian Institute of Company 
Directors, a Senior Fellow of the Financial Services Institute 
of Australasia and a member of Chief Executive Women and 
Corporate Women Directors.

Committee memberships:  
Audit, Risk Management and Sustainability Committee 
(Member), Remuneration and People Committee (Chair)* and 
Finance Committee (Member)

*Effective 1 July 2023

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FORTESCUE  FY23 ANNUAL REPORT    |    17

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OUR BOARD

Yifei  Li

Non-Executive Director

Non-Executive Director since August 2022

Ms Yifei Li is the President of the QiBin Foundation and 
currently serves on the board of BlackRock China and is a 
Global Trustee of the Rockefeller Foundation.

Ms Li was an Independent Board member of GAVI (The 
Global Alliance for Vaccines and Immunisation) from 2012 to 
2018 and was formerly the Country Chair for Man Group in 
China, one of the world’s largest hedge fund managers.

Before joining Man Group, Ms Li had over 18 years of senior 
management experience, having successfully led the 
expansion of several multinational companies in China, 
including Viacom, MTV networks and VivaKi of Publicis 
Group.

Ms Li has a Bachelor of Law degree from the Foreign Affairs 
College in Beijing and an M.A. in International Relations from 
Baylor University in the United States

Cameron Wilson

Company Secretary

Mr Wilson was appointed Company Secretary in February 
2018, bringing over 25 years’ mining industry experience 
across the gold, nickel, coal and mineral sands sectors.

Mr Wilson holds a Bachelor of Laws from the University 
of Western Australia and is a Graduate of the Australian 
Institute of Company Directors

Gemma Tually

Joint Company Secretary

Ms Tually, Fortescue’s General Counsel, was appointed Joint 
Company Secretary in February 2023.

Ms Tually holds a Bachelor of Laws from the University of 
Western Australia and master’s degrees from the University 
of Queensland and New York University

FORTESCUE  FY23 ANNUAL REPORT    |    18

OverviewLEADERSHIP TEAM 

Fortescue’s Leadership team is accountable  
for the safety of our people, upholding the  
Values and acting with integrity and honesty      

Dino Otranto

Mark Hutchinson

Chief Executive Officer,  
Fortescue Metals

Chief Executive Officer, 
Fortescue Energy

Christine Morris

Deborah Caudle 

Chief Financial Officer, 
Fortescue Metals

Chief Financial Officer,  
Fortescue Energy

FORTESCUE  FY23 ANNUAL REPORT    |    19

THE LEADERSHIP TEAM

Dino Otranto 

Mark Hutchinson  

Chief Executive Officer, Fortescue Metals

Chief Executive Officer, Fortescue Energy 

Dino has been Fortescue Metal’s CEO since August 2023. 
Prior to that, he was Fortescue’s Chief Operating Officer iron 
ore. With twenty years’ experience in the resources industry, 
spanning a range of commodities and operations across 
the globe, Dino brings significant operational, technical and 
financial expertise and a strong focus on safety, values and 
employee engagement.

Dino is leading Fortescue’s successful metals business 
through a period of rapid growth, including the 
implementation of large-scale decarbonisation technologies 
along with the development of a new mining operation in 
Gabon, Africa.

Prior to joining Fortescue, Dino held the role of COO 
at Vale Base Metals, leading their North American, 
European and Asian nickel and copper businesses, which 
encompasses a global network of underground and open 
pit mines, smelters, refineries, power stations, port and rail 
infrastructure.

Dino holds a Bachelor of Engineering (Chemical) and a 
Bachelor of Science (Chemistry) from Curtin University and 
a Graduate Diploma of Finance from the Financial Services 
Institute of Australasia.

Mark Hutchinson commenced with Fortescue Energy in July 
2022 and became Global Chief Executive Officer (CEO) in 
August 2022. 

Mark’s focus as CEO is to drive growth in Fortescue Energy, 
Fortescue’s green hydrogen and green technology business. 
In 2023, the team will accelerate its target of up to five green 
hydrogen projects to Final Investment Decision.

Mark brings extensive business and leadership experience 
at a senior executive level, having held various roles at GE 
over a 25 year career, the two most recent as President and 
Chief Executive Officer China and Europe. In these roles 
Mark led the efforts to strengthen GE’s operations across 
China and Europe and developed and executed a shared 
growth strategy for all the GE businesses which helped 
to drive significant growth, year on year.  He also led the 
integration of Alstom’s power and grid businesses into GE 
following its €12.35 billion acquisition.

A highly experienced international business leader with a 
passion for Environmental, Social and Governance (ESG), 
Mark sits on the Board of Alpha International and has 
previously held a Board position at World Wide Generation 
Limited, and Non-Executive Director roles at Bluescope 
Steel Limited, Mission Australia, Allianz Australia Insurance 
Limited and Alpha Australia. 

FORTESCUE  FY23 ANNUAL REPORT    |    20

OverviewTHE LEADERSHIP TEAM

Christine Morris

Deborah Caudle 

Chief Financial Officer, Fortescue Metals

Chief Financial Officer, Fortescue Energy

Christine Morris joined Fortescue Metals as Chief Financial 
Officer in July 2023. She has thirty years of financial 
experience in energy, media, telecommunications, 
accounting, manufacturing and technology. 

Prior to Fortescue, Christine served as CFO of Maersk 
Drilling in Copenhagen, Denmark. She has also been CFO of 
BJ Services, an oilfield services company, and spent seven 
years at Halliburton in various senior finance roles. She 
was appointed director of the board of DOF ASA in 2023, a 
business that provides integrated offshore services to the 
energy industry. 

Christine has a successful track record in aligning financial 
and corporate strategy and leading the finance divisions of 
global organisations. She also has extensive international 
capital markets experience across multiple industries, 
having structured and raised capital for public and private 
entities. Christine has a Bachelor of Science in Mathematics, 
a Master of Science in Actuarial Sciences and an MBA from 
the Graduate School of Business at Stanford University.

Deborah Caudle is joining the Company in September 2023 
as Chief Financial Officer of Fortescue Energy.

Deborah has over 24 years experience in the mining and 
metals sector. She was Acting CFO of copper and nickel 
miner OZ Minerals prior to BHP’s A$9.6 billion acquisition 
of the ASX100 company in May 2023 and joins Fortescue 
from BHP, where she held the role of Finance Executive 
overseeing integration activities.

Deborah previously held senior roles with Société Générale 
Corporate and Investment Banking and Barclays Investment 
Banking, where she gained a wealth of international 
experience providing advisory, structuring and financing 
solutions in the mining and metals sector with a focus on 
acquisition finance, project finance, debt capital markets and 
sustainability finance. 

(She started her career as a process engineer with BHP in 
the Pilbara.)

Deborah holds a Bachelor of Metallurgical Engineering 
(Physical Metallurgy) from the University of UNSW, a 
Master of Business Administration from The University of 
Queensland and is a Graduate of the Australian Institute of 
Company Directors.

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FORTESCUE  FY23 ANNUAL REPORT    |    21

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ABOUT 
FORTESCUE

Fortescue is both a proud West  
Australian company and the number 1 
integrated green technology,  
energy and metals company

Since our founding twenty years ago, Fortescue has become 
one of the world’s largest producers of iron ore – globally 
recognised for its world leading approach to building 
low-cost, large-scale infrastructure. We are the number 1 
integrated green technology, energy and metals company.

Since Fortescue’s first commercial shipment of 180,000 
tonnes of iron ore departed from Port Hedland, Western 
Australia to China in May 2008, Fortescue has remained 
a major, integral supplier of iron ore to the Chinese steel 
industry. Fortescue is now shipping at an annual rate of over 
190 million tonnes with more than 1.9 billion tonnes of iron 
ore delivered to its customers since 2008.

Our iron ore operations include three hematite mining hubs 
in the Pilbara and our Iron Bridge magnetite mine. Our three 
hubs are connected by 760 kilometres of rail to Herb Elliott 
Port and the Judith Street Harbour towage infrastructure in 
Port Hedland. We have also just delivered first ore to ship 
for our high grade magnetite project, Iron Bridge. Fortescue 
operates eight purpose-built 260,000 tonne capacity ore 
carriers. 

Fortescue is unique within the heavy industry: we are 
committed to reducing our emissions to Real Zero by 
2030 across our Australian terrestrial mining operations – 
eliminating fossil fuels by developing local renewable power 
and replacing our existing equipment with battery electric 
and green hydrogen models. 

We also have a net zero Scope 3 emissions target by 2040. 
Around 98 per cent of those emissions arise from crude 
steel manufacturing. We are supporting the development 

of technologies that will help enable our customers to 
make green steel, without coal, from the full spectrum of 
Fortescue’s iron ore products. 

For our size and scale, there is no other mining company 
in the world that is taking the action we are to eliminate 
emissions. 

The Fortescue group is a top 10 ASX listed company. 
Fortescue has two divisions – Metals and Energy. They work 
together for Fortescue as a whole, to ensure allocation of 
resources is prioritised across the divisions. Our Metals 
team focuses on our Australian and global iron ore deposits, 
exploration into new fields and the development of green 
iron technologies for future use.

Fortescue Energy comprises Fortescue Future Industries 
(FFI), Fortescue Hydrogen Systems and Fortescue WAE, 
focuses on meeting urgent global demand for green energy, 
aviation fuels, green fertilisers and green shipping fuels. In 
2023, the energy business focused on bringing projects to 
Final Investment Decision.

Fortescue always strives to empower the communities we 
operate in and deliver positive social and economic change 
through training, employment and business development 
opportunities.

This is evident through initiatives such as our Billion 
Opportunities program which has awarded more than  
A$4.6 billion in contracts to First Nations businesses since it 
was established in 2011.

FORTESCUE  FY23 ANNUAL REPORT    |    22

OverviewOUR 
OPERATIONS

As one of the world’s largest producers 
of iron ore, Fortescue’s wholly owned 
and integrated operations in the Pilbara 
include the Chichester, Solomon and 
Western mining hubs

SAFETY

PRODUCTION

C1 COST

1.8¹

192.0 mt

US$17.54/wmt

TOTAL RECORDABLE  
INJURY FREQUENCY RATE

IRON ORE SHIPPED

¹ Fortescue Metals

Our mining infrastructure is connected to the five berth Herb Elliott Port 
and Judith Street Harbour towage facility in Port Hedland.

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FORTESCUE  FY23 ANNUAL REPORT    |    23

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Iron Bridge 
Iron Bridge signifies Fortescue’s entry into the high grade 
segment of the iron ore market, providing an enhanced 
product range while also increasing annual production and 
shipping capacity. Located 145km south of Port Hedland, 
Iron Bridge is Fortescue’s first magnetite operation and 
incorporates the North Star and Glacier Valley magnetite  
ore bodies.

Unlike Fortescue’s hematite operations, Iron Bridge 
produces a wet concentrate product which is transported 
to Port Hedland through a 135km specialist slurry pipeline 
where dewatering and materials handling occurs.

In coming years, low-cost power will be delivered to Iron 
Bridge through Fortescue’s investment in the Pilbara Energy 
Connect project, which includes energy transmission line 
infrastructure, solar gas hybrid generation and associated 
battery storage solution.

Iron Bridge is an unincorporated joint venture between FMG 
Magnetite Pty Ltd (69 per cent) and Formosa Steel IB Pty Ltd 
(31 per cent).

Chichester Hub 
Our Chichester Hub in the Chichester Ranges includes the 
Cloudbreak and Christmas Creek mines and has an annual 
production capacity of approximately 100 million tonnes per 
annum (mtpa) from three ore processing facilities (OPFs). 

The Christmas Creek OPF infrastructure has previously 
been upgraded to include a Wet High Intensity Magnetic 
Separator to recover high-grade iron from the finer ore fed 
through the OPF. Cloudbreak utilises 20km of relocatable 
conveyors that can be adjusted and relocated to any new 
mining areas to offset the increase in costs. 

Currently, this conveyor infrastructure helps to otherwise 
offset a fleet increase and helps manage our product 
strategy, while being cost-efficient and, when powered by 
renewable energy in the future, reducing greenhouse gas 
emissions. Our Chichester Hub is also home to a 60MW 
solar farm which powers Fortescue’s daytime operations at 
Cloudbreak and Christmas Creek, displacing around 100 
million litres of diesel every year.  

Solomon Hub 
The Solomon Hub in the Hamersley Ranges is located 60km 
north of Tom Price and 120km to the west of the Chichester 
Hub. It comprises the Firetail, Kings Valley and Queens 
Valley mines which together have a production capacity of 
65 to 70mtpa. The expansion to Queens Valley has enabled 
continued production of the Kings Fines product. Solomon 
represents a valuable source of production, enabling the 
blend of higher iron grade Firetail ore with ore from Eliwana 
and the Chichester Hub to create Fortescue’s Blend product.

Western Hub 
Fortescue’s mine at Eliwana commenced operations in 
December 2020 and includes a 30mtpa dry OPF and 143km 
of rail linking the mine to the Hamersley rail line. Together 
with its innovative low profile designed OPF and dual stacker 
reclaimer, Eliwana has the capacity to direct load onto trains 
up to 9,000 tonnes per hour. Eliwana is now producing at an 
annualised rate of 30mt, contributing to our low cost status 
and providing greater flexibility to capitalise on market 
dynamics.

Hedland operations 
Fortescue wholly owns and operates purpose-built rail 
and port facilities. The efficient design and layout, optimal 
berthing configuration and ongoing innovation to increase 
productivity make Herb Elliott Port an efficient bulk port 
operation. The port has five operating berths and we have 
been granted approval to increase the licensed throughput 
capacity of Herb Elliott Port from 175mtpa to 210mtpa. 

Our Judith Street Harbour towage infrastructure and fleet of 
tugs provide safe and reliable towage services that maximise 
the efficiency of our operations. Designed to complement 
the port infrastructure, the fleet of eight 260,000 tonne 
capacity Fortescue Ore Carriers delivers approximately 
10 per cent of our shipping requirements, while improving 
load rates and efficiencies and reducing operating costs. 
Fortescue’s shipping fleet completes our mine to market iron 
ore value chain. 

Integrated Operations Centre 
Our Fortescue Hive is a purpose-built Integrated Operations 
Centre in Perth that opened in 2020 and includes Planning, 
Operations and Mine Control teams, together with Port, 
Rail, Shipping and Marketing teams. In FY23, the Hive was 
expanded to include Iron Bridge control. The Hive operates 
24 hours a day, seven days a week to deliver improved safe, 
reliable, efficient and commercial outcomes. 

FORTESCUE  FY23 ANNUAL REPORT    |    24

OverviewBelinga Iron Ore Project, Gabon 
The Belinga Iron Ore Project in Gabon is Fortescue’s first iron 
ore project outside of Australia. 

In February 2023, Fortescue, through its incorporated joint 
venture company, Ivindo Iron SA, successfully signed a 
Mining Convention with the Government of Gabon. This 
governs all legal, fiscal and regulatory regimes for the 
project. Further legislation is proposed to be enacted during 
FY24 to give further effect to the above arrangements. First 
ore was trained to port in June 2023 and we are on track for 
first shipment by the end of calendar year 2023. 

The Belinga project opens growth opportunities for 
Fortescue throughout Africa. Every indication we have  
shows the project has the potential to be significant scale 
and high-grade. Studies continue to advance potential 
designs of a large-scale development.

Fortescue was founded on the belief that communities 
should thrive as a result of our success. The investments 
in the Belinga Iron Ore Project will bring infrastructure and 
economic opportunities that will benefit national and local 
communities, including through creating jobs, engaging 
local businesses and providing training opportunities. 

Ivindo Iron is the operating entity for the Belinga project and 
Fortescue has a 72 per cent indirect interest in the company.  

Critical minerals and iron ore exploration 
Fortescue started as an exploration company, and we still 
firmly believe that early stage exploration is the key to 
unlocking significant value. 

In FY23, Fortescue's exploration activities included: 

•  Continued iron ore exploration in the Pilbara, with resource 
definition drilling in the Eastern Hamersley and a focus 
on Nyidinghu and Mindy South and regional exploration 
across the Pilbara with a focus in the Western Hub

•  Exploration activity primarily focused on early-stage 

target generation for copper-gold in the Paterson region 
in Western Australia

•  Additional exploration activity for copper is progressing in 

South Australia, New South Wales and Queensland.

International exploration 
Our world class exploration capability is driving future growth 
as we target global opportunities and commodities that 
support decarbonisation, electrification of the transport 
sector and broader opportunities, with a focus on copper, 
lithium and rare earths. Fortescue has an established 
presence in Latin America, including Argentina, where we 
currently hold tenements prospective for copper-gold. 

Fortescue also holds tenements for critical minerals in Brazil, 
Chile and Peru where exploration is ongoing. Fortescue has 
a 25.4 per cent stake in TSX listed Alta Copper Corp. and we 
support the advancement of the Cañariaco project in Peru. In 
Kazakhstan, a range of copper targets are being progressed 
to drilling while work in Portugal is focused on development 
of lithium opportunities.

Fortescue Energy
Fortescue Energy is our global green energy business. Its 
focus is on producing commercial scale of green energy 
and green hydrogen, including derivatives such as green 
ammonia, to accelerate global decarbonisation of heavy 
industry, aviation, shipping and fertilisers. We have  
industry-leading targets to decarbonise Fortescue's mining 
sites by 2030 for its Australian terrestrial emissions while 
achieving net zero Scope 3 emissions by 2040. 

We have dozens of green energy and green hydrogen 
projects under investigation globally and plans to bring 
projects to Final Investment Decision in 2023. 

Currently, our focus is on five key regions: 

•  Phoenix, USA. Across the US, we are actively developing 
several potential green hydrogen projects including near 
Phoenix, Arizona. 

•  Gibson Island, Australia. With Incitec Pivot Limited, a 

proposed 550MW green hydrogen and green ammonia 
facility is currently in the front end engineering design 
(FEED) stage.

•  Nakuru county, Kenya. A proposed, up to 300MW, steam-
to-fertiliser facility utilising geothermal steam from the 
Olkaria region in Nakuru county is currently in the pre-
feasibility stage. The project is aimed at the production 
of green fertiliser for domestic use in Kenya, with the 
Government of Kenya as the sole off-taker.

•  Holmaneset, Norway. A proposed 300MW green ammonia 

facility is currently in the pre-feasibility stage with 
renewable energy secured via a long-term conditional 
Power Purchase Agreement with Statkraft to support our 
operational plans.

•  Pecem, Brazil. A proposed green hydrogen and green 
ammonia facility at the Port of Pecem, Ceará, is in the  
pre-feasibility phase.

FORTESCUE  FY23 ANNUAL REPORT    |    25

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In addition to the above, we have a number of other exciting 
opportunities that are being progressed and are expected to 
be developed and ready for final investment decision during 
2024.

Other developments in FY23:

•  Construction works completed at our electrolyser 

manufacturing facility, the Green Energy Manufacturing 
Centre, in Gladstone, Queensland. Further fit-out of the 
facility, including the automated production line and 
testing facilities, has now commenced 

•  Completion of the R&D Perth Innovation Centre

•  Launch of the Colorado Innovation Centre in the USA.

Decarbonisation 
Fortescue released its decarbonisation roadmap in 
September 2022, which aims to reduce operating costs by 
eliminating expenditure in diesel, natural gas and offsets. 
Fortescue is leading the market in terms of its response to 
customer, community and investor expectations to reduce 
and eliminate carbon emissions from its operations. 

In executing our roadmap, we are using well-established 
technologies and, in some cases, using those technologies 
in new ways. We believe battery electric, green hydrogen and 
green ammonia will all be critical, and we are taking practical 
steps to apply the best solution to each different situation. 

Zero-emission trucks, trains and ships
•  In FY23, Fortescue deployed our first prototypes on 

site. In June, our first battery electric haul truck arrived 
at Christmas Creek. Roadrunner brings several surface 
mining firsts, including the ability to fast-charge in 30 
minutes and capacity to store regenerated power as it 
drives downhill.

Green iron and green steel
The global interest in green iron and green steel is growing 
rapidly. As part of our commitment to achieving our Scope 
3 emissions target, we are working with our customers 
to reduce their carbon emissions. For example, in FY23, 
Fortescue announced a Memorandum of Understanding 
with China Baowu, Fortescue’s largest customer and 
the largest steelmaker in the world, to work together on 
reducing emissions associated with iron and steelmaking.

We are also conducting R&D to develop technologies 
needed to decarbonise the iron used to make steel. In FY23, 
we developed a pilot installation capable of converting 
iron ore to green iron without coal, with several patent 
applications filed. The process uses low-temperature 
electrolysis, which can be powered using renewable 
electricity and offers a potential pathway to enable the full 
spectrum of Fortescue’s iron ore products to be converted 
into green iron.

Renewable power on our mining sites
The Pilbara Energy Connect (PEC) project, together with the 
Chichester Solar Gas Hybrid Project, will deliver 25 per cent 
of our stationary energy requirements from solar power by 
FY25. The project will enable renewable electricity generated 
at any of Fortescue’s sites to move between our operations 
in Port Hedland, Iron Bridge, Cloudbreak, Christmas Creek, 
Solomon and Eliwana, via over 500km of transmission lines. 

The following project milestones were achieved in FY23:

•  North Star Junction to Port Hedland: 98km of 
transmission lines and a 220kV substation now 
constructed.

•  North Star Junction: construction of a 100MW solar plant 

underway, with commissioning in 2024. 

•  Fortescue’s hydrogen fuel cell electric truck will be 

•  Solomon to Eliwana: Board approval was received for 

delivered to Christmas Creek in FY24. 

•  A prototype Offboard Power Unit (to power the Liebherr 
Electric Excavator previously delivered to site) and a 
prototype 3MW Fast Charger have also been transported 
to Christmas Creek to continue commissioning and site-
based testing.

•  In May 2023, our dual-fuel ammonia-powered locomotive 
arrived at Solomon to undergo field tests. Commissioning 
of the locomotive is being completed in readiness for 
mainline trials in FY24. We are continuing to explore the 
development of a world-first Infinity Train which would 
use gravitational energy to recharge its battery electric 
systems without any additional charging requirements.

•  In FY23, Fortescue Energy continued to develop a  

dual-fuel ammonia powered ship engine. In the second 
half of calendar year 2023, it will undergo its first sea trials 
onboard the 75 metre Green Pioneer.

construction of 132km of transmission line and a 220kV 
substation scheduled to start this year. 

•  Lambda to Cloudbreak and Christmas Creek: Board 

approval has been received, with procurement underway 
and construction of 111km of transmission lines and two 
220kV substations to start in 2024.

The project complements the Chichester Solar Gas Hybrid 
Project, which was completed in 2021 and provides up to 
100 per cent of Christmas Creek’s and Cloudbreak’s daytime 
energy needs, displacing around 100 million litres of diesel 
every year. 

FORTESCUE  FY23 ANNUAL REPORT    |    26

OverviewIRON ORE
VALUE CHAIN

Modelling, 
planning and 
development

Processing
Ore processing 
facility design and 
wet processing 
optimise output

Blending and 
stockpiling
Port design 
facilitates blending 
and stockpiling of 
product suite

Marketing
Helping customers 
achieve best value 
in use

China port sales
FMG Trading 
Shanghai Co. Ltd 
(FMG Trading)

FORTESCUE  FY23 ANNUAL REPORT    |    27

Exploration 
and discovery
Challenging geological 
thinking to identify 
valuable deposits

Extraction and 
recovery
Innovative use of 
technology suitable to 
Fortescue’s deposits

Mine to port
Heavy haul rail 
at 42t axle load

Shiploading
3 shiploaders and  
5 berths maximise outload 
capacity and utilisation

Shipping and towage
Delivery to Fortescue’s 
international customers’ 
specifications

8 Fortescue Ore Carriers 

Towage fleet provides safe 
and reliable towage services

Rehabilitation
Mine closure and 
decommissioning

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OPERATING AND 
FINANCIAL REVIEW
2023

02

Fortescue partners 
with Liebherr  
to develop battery 
electric mining  
haul trucks

KEY PERFORMANCE  
INDICATORS

SAFETY

PRODUCTION

C1 COST

1.8¹

192.0 mt

US$17.54/wmt

TOTAL RECORDABLE  
INJURY FREQUENCY RATE

IRON ORE SHIPPED

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FORTESCUE  FY23 ANNUAL REPORT    |    29

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SAFETY

The health, safety and wellbeing of the Fortescue  
family is our number one priority and our focus remains  
on ensuring everyone goes home safely after every shift

Each day, everyone at Fortescue is empowered to take 
control and look out for their mates and themselves. 
The Company is committed to providing a safe working 
environment for all employees and contractors to ensure we 
become a global leader in safety. 

Fortescue Metals' rolling 12-month Total Recordable Injury 
Frequency Rate (TRIFR) is 1.8 at 30 June 2023. 

Safety culture
Guided by the Fortescue Values of Safety and Family, 
Fortescue is committed to continuing to improve safety 
performance across the following areas: 

•  Strengthening safety leadership through specific action 
plans to address the priorities identified by the annual 
company-wide People Experience Survey (Safety 
Excellence and Culture Survey).

•  The continued reduction of the workplace injury and 
fatality risk profile through frontline designed and 
implemented safety improvement opportunities. 

•  Taking a data driven approach to prioritise safety risks 
by using data analytics to focus and monitor safety 
performance. 

•  Continuing to improve the physical and mental health of 

our team members. 

Fortescue continues to implement a number of initiatives 
to enhance the safety, culture and mental health of people 
working at the Company’s operations and workplaces as a 
result of feedback from its Workplace Integrity Review. 

FORTESCUE  FY23 ANNUAL REPORT    |    30

Operating and financial reviewFORTESCUE 
METALS
Record shipping and production output reflecting 
optimisation and consistency across the value chain

(million tonnes)

Overburden removed

Ore mined

Ore processed

Shipments¹

Ore sold

2023

323

218

192

192

192

2022

315

229

189

189

189

Movement %

3

(5)

2

2

2

Pilbara Hematite operations only. During the period, 1.4mt of ore was mined at Iron Bridge.

1    Volume references are based on wet metric tonnes. Product is shipped with approximately 8 to 9 per cent moisture.

Fortescue achieved record annual shipments of 192mt 
through consistent performance from existing operations. 

Ore mining decreased in FY23 to 218mt (FY22: 229mt). 
Increasing strip ratio (FY23: 1.5x, FY22 1.4x) reflects the 
sequence of ore and waste mining and was consistent with 
both the annual and Life of Mine plan and development 
of new mining areas. Development work continues within 
Western Hub at Flying Fish and at the Chichester Hub with 
Garden and Hall. Development of these areas to optimise 
systems capacity aligns with Fortescue’s product strategy 
while also managing operating and capital costs.

Ore processing is an annual record at 192mt. This 
achievement reflects consistent performance and reliability 
through existing OPFs. Fortescue has a combination of both 
wet and dry OPFs across its operations aligning with the 
characteristics of the ore bodies. 

Fortescue’s record shipments of 192mt was 3mt above the 
previous record set in FY22 (189mt). The record shipping 
reflects stable and consistent performance from all 
operations achieving planned production output combined 
with leveraging available inventory within the value chain. 
Fortescue’s ore carriers continue to perform, shipping 18.9mt 
in FY23 (18.9mt in FY22).

Sales via Fortescue’s wholly owned Chinese sales entity, 
FMG Trading Shanghai was 16.7mt in FY23 (FY22: 18.5mt 
sold). This entity allows Fortescue to improve iron ore sales 
channels through the direct supply of products to Chinese 
customers in smaller volumes in renminbi, directly from 
regional ports. 

Marketing and product strategy 
Fortescue’s integrated operations and customer-focused 
marketing strategy underpins the Company’s ongoing 
strong market penetration, with a product portfolio that 
meets customer requirements and maximises value. While 
China remains Fortescue’s core focus, representing more 
than 50 per cent of global steel production, the Company 
continues to explore sales to other markets.

Innovation and technology
Fortescue has led the way globally in embracing automation 
at its operations. Fortescue maintains its position as a leader 
in autonomous haulage, with over 190 trucks operating 
across the Solomon and Chichester hubs. 

The introduction of automation has not only contributed to 
a safer working environment for our team members, it has 
also underpinned significant productivity and efficiency 
improvements.

The Company continues to look for other opportunities 
for automation and artificial intelligence to drive greater 
efficiency across the business, including the use of data to 
predict outcomes and optimise performance, the expansion 
of autonomy to fixed plant and non-mining equipment and 
the application of relocatable conveyor technology.  

FORTESCUE  FY23 ANNUAL REPORT    |    31

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Decarbonisation
In September 2022, we updated our heavy industry 
decarbonisation strategy, aiming to eliminate fossil fuel use 
and achieve real zero terrestrial emissions (Scope 1 and 2) 
across our Australian iron ore operations by 2030. 

Consistent with our disciplined approach to capital 
allocation, Fortescue’s Board approved US$6.2 billion 
investment in our decarbonisation roadmap, which is 
expected to reduce operating costs while future proofing our 
business against carbon regulatory risk. 

As part of the investment, we intend to deploy an additional 
2-3 GW of renewable energy generation and battery storage, 
in addition to the estimated incremental costs associated 
with green mining fleet and locomotives.

Fortescue remains committed to our stated intent to achieve 
net zero Scope 3 emissions by 2040 (announced in October 
2021), addressing emissions across our entire global value 
chain, including crude steel manufacturing which accounts 
for 98 per cent of our Scope 3 emissions.

The acquisition of Fortescue WAE was completed in 2022. 
Fortescue WAE, a leading provider of high-performance 
battery and electrification technologies, is an important 
acquisition that enables us to accelerate the decarbonisation 
of its mining fleet as well as establish a new business growth 
opportunity.

Fortescue is making significant progress on our 
decarbonisation initiatives, enabled through Fortescue 
Energy.

The key milestones on our journey to step beyond fossil fuels 
achieved during FY23 include:

•  First delivery of a battery electric haul truck prototype to 

Christmas Creek for site-based testing.

•  We have further refined a hydrogen-powered haul truck, 
as well as retrofitted a locomotive engine to run partly on 
ammonia, with the locomotive deployed at Christmas Creek in 
May 2023. 

•  We have successfully modified a diesel ship engine to run on 
green ammonia and we plan to carry out first sea trials later 
this year on board the Green Pioneer.

This builds on the progress that has already been made to 
decarbonise our iron ore operations: 

•  Chichester Solar Gas Hybrid Project which displaces around 

100 million litres of diesel per annum.

•  Investment in the Pilbara Energy Connect program which is 

estimated to provide 25 per cent of stationary daytime energy 
across our mining operations through solar power.

•  Partnering with Liebherr for the development and supply of 

green mining haul trucks. 

Key considerations for our pathway to decarbonise include 
technology and development, future equipment acquisition and 
potential regulatory changes. Future changes to Fortescue’s 
decarbonisation strategy may impact key estimates and 
changes to asset carrying values.

FORTESCUE  FY23 ANNUAL REPORT    |    32

Operating and financial reviewExploration
Fortescue began as an exploration company and today our 
iron ore tenements remain key to maintaining mine life and 
sustaining product quality in our core iron ore business. 

Fortescue holds the largest tenement portfolio in the Pilbara 
region of Western Australia. The resources in both the 
Western Hub and Eastern Hamersley include significant 
amounts of high iron content bedded iron ore, adding dry,  
low-cost tonnes to Fortescue’s product suite. 

Iron ore exploration activity in the Pilbara during FY23 included 
resource definition drilling in the Eastern Hamersley, with a 
focus on the program at Mindy South and Nyidinghu, along 
with regional exploration programs including Wyloo North in 
the Western Hub and White Knight which is located west of 
Cloudbreak.

In the critical minerals portfolio, Fortescue is ramping up 
exploration activities with a key focus on copper, rare earths 
and lithium. 

Exploration for Australian copper-gold portfolio continues 
with drilling programs underway, including the Isdell 
projects in the Patterson Province of Western Australia.  
Early stage target generation activities were also completed 
across the South Australian and New South Wales projects 
while tenements for copper and lithium were pegged in 
Queensland.

International exploration include drilling programs across 
project areas in Argentina, Chile, Brazil and Kazakhstan.

Projects

Iron Bridge

The Iron Bridge magnetite mine, when operating at full 
capacity, is projected to deliver 22mt per annum of  
high-grade, low-impurity 67% Fe magnetite concentrate.  
Iron Bridge is an unincorporated joint venture between FMG 
Magnetite Pty Ltd (69 per cent), and Formosa Steel IB Pty Ltd 
(31 per cent).

Iron Bridge commenced production of high-grade magnetite 
concentrate during the last quarter of FY23 and first 
concentrate was loaded on ship on 24 July 2023.

Iron Bridge represents a strategic investment for Fortescue 
and its joint venture partner. It enables Fortescue’s entry into 
the high-grade segment of the iron ore market, providing 
an enhanced product range while also increasing annual 
production and shipping capacity.

Belinga Iron Ore Project, Gabon

The Belinga Iron Ore Project in Gabon is Fortescue’s first iron 
ore project outside of Australia. 

In February 2023, Fortescue, through its incorporated joint 
venture company, Ivindo Iron SA, successfully signed a Mining 
Convention with the Government of Gabon. This governs all 
legal, fiscal and regulatory regimes for the project. Further 
legislation is proposed to be enacted during FY24 to give 
further effect to the above arrangements. First ore was trained 
to port in June 2023 and we are on track for first shipment by 
the end of calendar year 2023. 

The Belinga project opens growth opportunities for Fortescue 
throughout Africa. Every indication we have  
shows the project has the potential to be significant scale and 
high-grade. Studies continue to advance potential designs of 
a large-scale development.

Fortescue was founded on the belief that communities should 
thrive as a result of our success. The investments in the 
Belinga Iron Ore Project will bring infrastructure and economic 
opportunities that will benefit national and local communities, 
including through creating jobs, engaging local businesses 
and providing training opportunities. 

Ivindo Iron is the operating entity for the Belinga project and 
Fortescue has a 72 per cent indirect interest in the company.  

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FORTESCUE  FY23 ANNUAL REPORT    |    33

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FORTESCUE  
ENERGY

Green energy
We have multiple green energy and green hydrogen projects 
under development globally and a target to bring up to 
five projects to final investment decision in 2023. Focus is 
currently on five key regions: 

•  Phoenix, USA. Across the US, we are actively developing 
several potential green hydrogen projects including near 
Phoenix, Arizona. 

•  Gibson Island, Australia. With Incitec Pivot Limited, a 

proposed 550MW green hydrogen and green ammonia 
facility is currently in the front end engineering design 
(FEED) stage.

•  Nakuru county, Kenya. A proposed, up to 300MW, steam-
to-fertiliser facility utilising geothermal steam from the 
Olkaria region in Nakuru county is currently in the pre-
feasibility stage. The project is aimed at the production 
of green fertiliser for domestic use in Kenya, with the 
Government of Kenya as the sole off-taker.

•  Holmaneset, Norway. A proposed 300MW green 

ammonia facility is currently in the pre-feasibility stage 
with renewable energy secured via a long-term conditional 
Power Purchase Agreement with Statkraft to support our 
operational plans.

•  Pecem, Brazil. A proposed green hydrogen and green 
ammonia facility at the Port of Pecem, Ceará, is in the  
pre-feasibility stage.

Fortescue Energy is comprised of Fortescue Future 
Industries, Fortescue Hydrogen Systems and Fortescue 
WAE. Our global green energy business is committed to 
producing green electrons and green molecules (including 
green hydrogen, green ammonia, and other green 
derivatives) from renewable sources to support global 
decarbonisation efforts. 

Leading the green industrial revolution, we are developing 
technology solutions for hard-to-decarbonise industries.  
Fortescue has industry-leading targets to eliminate fossil 
fuels on its mine sites by 2030 and achieve net zero Scope 3 
emissions by 2040.

FORTESCUE  FY23 ANNUAL REPORT    |    34

Operating and financial reviewGreen technology
Leveraging Fortescue’s long history of adopting leading 
edge technology, we are setting the pace for innovation 
in the green energy space. We have a growing portfolio of 
technology assets which will support the decarbonisation 
efforts of our operations and create new revenue streams for 
our business.

Construction works were completed at our electrolyser 
manufacturing facility, the Green Energy Manufacturing 
Centre, in Gladstone, Queensland. Further fit-out of the 
facility, including the automated production line and testing 
facilities, has now commenced. This facility has an initial 
output capacity of 2GW.

We completed the R&D Perth Technology Innovation Centre 
and opened its Colorado Technology Innovation Centre in 
the USA, which will tap into the US talent pool and innovation 
ecosystem.  

Together with Siemens Energy, we announced the 
commencement of work on a new ammonia cracker 
prototype. Using our Metal Membrane Technology, 
developed in partnership with the CSIRO, the cracker is part 
of the green hydrogen supply chain.

Green industry and Fortescue WAE
Together with Fortescue WAE, we are developing the 
technology to deliver high performance battery systems to 
power our mining and rail fleets. 

Key achievements in FY23 include:

•  First delivery of a battery electric haul truck prototype to 

Christmas Creek for site-based testing. 

•  Fortescue WAE is working on the delivery of a  

world-leading, regenerating battery electric iron ore train. 

•  We have further refined a hydrogen-powered haul truck, 
as well as retrofitted a locomotive engine to run partly 
on ammonia, with the locomotive deployed at Christmas 
Creek in May 2023. 

•  We have successfully modified a diesel ship engine to run 
on green ammonia and we plan to carry out first sea trials 
later this year on board the Green Pioneer.

•  We plan to expand our operations to include two new 
facilities in the United Kingdom, one in Kidlington and 
the other in Banbury. The Kidlington facility will focus on 
prototype development of power systems for multiple 
green mobility applications. The Banbury facility will focus 
on manufacturing heavy industry, zero-emission battery 
modules and fully assembled power systems.

Green steel
The global interest in green iron and green steel is 
growing rapidly globally. As part of our commitment to 
achieving our Scope 3 emissions target, we are working 
with our customers to reduce their carbon emissions. For 
example, in FY23, Fortescue announced a Memorandum 
of Understanding with China Baowu, Fortescue’s largest 
customer and the largest steelmaker in the world, to work 
together on reducing emissions associated with iron and 
steelmaking.

We are also conducting R&D to develop technologies 
needed to decarbonise the iron used to make steel. In FY23, 
we developed a pilot installation capable of converting 
iron ore to green iron without coal, with several patent 
applications filed. The process uses low-temperature 
electrolysis, which can be powered using renewable 
electricity and offers a potential pathway to enable the full 
spectrum of Fortescue’s iron ore products to be converted 
into green iron.

FORTESCUE  FY23 ANNUAL REPORT    |    35

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FINANCIAL  
RESULTS

FINANCIAL PERFORMANCE

During the year ended 30 June 2023, Fortescue delivered an underlying 
net profit after tax of US$5,522 million and underlying earnings per share 
of 180 US cents

Financial performance reflects record shipments of 
192.0mt combined with strong price realisation through 
the market cycle. Fortescue’s approach to an integrated 
operations and marketing strategy combined with 
strong cost management to maximise margins has 
substantially mitigated inflationary pressures in labour, 
materials and energy markets which remain a key 
exposure risk. The strength of operating performance 

and a continued focus on productivity and efficiency has 
supported the underlying EBITDA margin strength.

Financial performance during the year ended 30 June 
2023 was impacted through the US$726 million post 
tax impairment expense of Iron Bridge. The impairment 
expense reflects inflationary cost pressures increasing 
operating costs, increase in discount rates and the 
timing of project ramp-up.

Key metrics

Revenue, US$ millions

Underlying EBITDA¹, US$ millions

Net profit after tax, US$ millions

Earnings per share, US cents

Earnings per share, AUD cents

Impairment expense after tax, US$ millions

Underlying net profit after tax, US$ millions²

Underlying earnings per share, US cents

Underlying earnings per share, AUD cents

Average realised price, US$/dmt³

C1 costs, US$/wmt

Underlying EBITDA margin, US$/dmt (excl Fortescue Energy)

Key ratios

Underlying EBITDA margin, %

Return on equity, on underlying earnings, %

2023

16,871

9,963

4,796

156

231

726

5,522

180

267

95

17.54

60

59

31

2022

17,390

10,561

6,197

201

277

–

6,197

201

277

100

15.91

63

61

35

1    Refer to page 40 for the reconciliation of underlying EBITDA to the financial metrics reported in the financial statements under  

Australian Accounting Standards. 

2    The term ‘Underlying NPAT’ refers to results adjusted for the removal of significant non-cash and non-recurring items. Fortescue has one  

expense in this category being the US$726 million post tax impairment expense on the Iron Bridge Cash Generating Unit.

3    Dry metric tonnes

FORTESCUE  FY23 ANNUAL REPORT    |    36

Operating and financial reviewFinancial performance

Segment reporting
For FY23, the scope of the operating segments has 
been modified following the changes in management 
responsibilities in 2023. Energy segment now includes 
Fortescue WAE which was formerly included in the  
Metals segment. Accordingly, the comparative period  
30 June 2022 below has been restated to reflect the  
change in segment structure.

Fortescue’s operating segments are described below:

•  Metals: Exploration, development, production, processing, 
sale and transportation of iron ore, and the exploration for 
other minerals.

•  Energy: Undertaking activities in the development of 
green electricity, green hydrogen and green ammonia 
projects.

Corporate includes cash, debt and tax balances which are 
managed at a group level, together with other corporate 
activities. Corporate is not considered an operating segment 
and includes activities that are not allocated to other 
operating segments.

The consolidated, Metals and Energy results for the year 
ended 30 June 2023 are provided below and further 
reported on page 116 in the financial report. 

Metals

Energy

Corporate

Consolidated

Note1

2023

2022

2023

2022

2023

2022

2023

2022

US$m

Revenue 

3

16,764

17,364

107

26

Underlying EBITDA

10,545

11,158

(617)

(396)

1  Notes to the accompanying financial statements.

–

35

–

16,871

17,390

(201)

9,963

10,561

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Financial performance

REVENUE

Total iron ore revenue, US$ millions

Total shipping revenue, US$ millions

Manufacturing and engineering services revenue, US$ millions

Other revenue, US$ millions

Operating sales revenue, US$ millions

Note1

3

3

3

3

Shipments, million wmt

Ore sold2, million wmt

Average 62% Fe CFR Platts Index, US$/dmt

Average realised price, US$/dmt

1  Notes to the accompanying financial statements.

2023

15,318

1,356

106

91

16,871

192

192

110

95

2022

15,393

1,919

26

52

17,390

189

189

138

100

2  Our wholly owned trading entity maintains some inventory at Chinese ports and ore sold versus shipments reflects the timing differences that may occur 

between shipments and sales to external customers.

Fortescue’s record shipments for the year ended 30 June 2023 were 3.0mt above FY22 at 192.0mt (FY22: 189.0mt), and were  
partially offset by a five per cent decrease in realised price to US$95/dmt (FY22: US$100/dmt). The Platts 62% CFR index  
averaged US$110/dmt in FY23 which is a decrease of 21 per cent over the prior year (FY22: US$138/dmt).

The factors influencing realised prices in FY23 include:

•  Lower index prices for iron ore compared to the prior year, due to prevailing iron ore supply and demand during FY23.

•  Strong demand for Fortescue products, with inventory levels at ports in China remaining low.

•  Sustained low steel margins in China, which supported demand for Fortescue products from steelmakers.

•  Robust steel production in China, despite weak real estate sector metrics, with relatively low visible steel inventory.

•  Limited scrap availability in China, which supported demand for iron ore.

•  Actual and anticipated government policy support in China intended to support economic growth in CY22 and CY23.

FORTESCUE  FY23 ANNUAL REPORT    |    38

Operating and financial review 
Financial performance

PRODUCTION COSTS

The reconciliation of C1 costs and total delivered costs to customers to the financial metrics reported in the financial 
statements under Australian Accounting Standards is set out below.

Mining and processing costs, US$ millions

Rail costs, US$ millions

Port costs, US$ millions

C1 costs, US$ million

Ore sold, million wmt

C1 costs, US$/wmt

Shipping costs, US$ millions

Government royalty2, US$ millions

Administration expenses, US$ millions

Shipping, royalty and administration, US$ millions

Ore sold, million wmt

Shipping, royalty and administration, US$/wmt

Total delivered cost, US$/wmt

Total delivered cost, US$/dmt

1 Notes to the accompanying financial statements.

Note1

5

5

5

5

5

6

2023

2,856

266

251

3,373

192

17.54

1,455

1,124

288

2,867

192

15

33

35

2022

2,539

243

219

3,001

189

15.91

1,976

1,130

204

3,310

189

18

33

36

2  Fortescue pays 7.5 per cent government royalty for the majority of its iron ore products, with a concession rate of five per cent applicable to  

beneficiated fines.  

C1 costs averaged US$17.54/wmt for the year, 10 per cent higher compared to the prior period. The increase in C1 costs  
reflects market inflationary pressures, including:

•  Labour cost pressures reflecting significant demand for skilled labour across the resources industry. 

•  Increase in underlying base price of maintenance materials reflecting global supply chain constraints as production 

attempts to return to post COVID-19 levels.

•  Increase in energy and fuels costs. 

Other factors influencing C1 cost performance were movements in exchange rates, with the AUD to USD averaging 0.67 in 
FY23 compared to 0.73 in FY22 as well as the strip ratio increasing to 1.5x in FY23 from 1.4x FY22. 

Total delivered costs were further impacted by a 33 per cent decrease in the shipping index between FY22 and FY23.

Fortescue has actively managed cost increases through the cycle while also utilising the capacity in the value chain to 
generate record shipments. Fortescue focuses on maximising margins and underlying EBITDA throughout the market cycle 
through our operating and marketing strategy. Cost management continues to be a focus, but inflationary pressures remain a 
risk.

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FORTESCUE  FY23 ANNUAL REPORT    |    39

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial performance

UNDERLYING EBITDA

Underlying EBITDA, defined as earnings before interest, tax, depreciation and amortisation, exploration, development  
and other expenses, and impairment expense, is used as a key measure of the Company’s financial performance. During  
FY23, Fortescue’s operations generated underlying EBITDA of US$9,963 million (FY22: US$10,561 million). The reconciliation 
of Underlying EBITDA to the financial metrics reported in the financial statements under Australian Accounting Standards is  
presented below.

Operating sales revenue

Cost of sales excluding depreciation and amortisation

Net foreign exchange gain/(loss)

Administration expenses

Research expenditure

Other income

Share of (loss)/profit from equity accounted investments

Underlying EBITDA

Finance income

Finance expenses

Depreciation and amortisation

Exploration, development and other expenses

Impairment expense

Income tax expense

Net profit after tax

Underlying net profit after tax

1 Notes to the accompanying financial statements.

Note1

3

5

4,6

6

6

4,6

23 (c)

7

7

5,6

6

6

14 (a)

2023
US$m

16,871

(6,109)

48

(288)

(553)

2

(8)

9,963

149

(275)

(1,744)

(170)

(1,037)

(2,090)

4,796

5,522

2022
US$m

17,390

(6,175)

(103)

(204)

(354)

1

6

10,561

14

(174)

(1,528)

(27)

–

(2,649)

6,197

6,197

The key factors contributing to the six per cent decrease in underlying EBITDA from the prior period were: 

•  Five per cent reduction in realised iron ore price to US$95/dmt (FY22: US$100/dmt) reflecting reduction in the iron ore 

index.

•  Two per cent increase in sales volumes to 192mt in FY23 from 189mt in FY22.

•  Ten per cent increase in C1 cost to US$17.54/wmt in FY23 from US$15.91/wmt in FY22.

•  Decrease in shipping costs to US$1,455 million in FY23 from US$1,976 million in FY22, reflecting movements in the shipping 

index.

•  US$199 million increase in research expenses, predominantly related to Fortescue Energy activities.

The underlying EBITDA of US$9,963 million for FY23 represents a margin of 59 per cent (63 per cent or US$60/dmt excluding 
Fortescue Energy). As illustrated in the chart below, Metals has been maintaining strong underlying EBITDA margins through 
market cycles, demonstrating the commitment to and focus on productivity, efficiency and innovation. 

FORTESCUE  FY23 ANNUAL REPORT    |    40

Operating and financial reviewFinancial performance

UNDERLYING EBITDA (CONTINUED)

Underlying EBITDA excluding Fortescue Energy

US$/dmt

160

140

120

100

80

60

40

20

21

FY16

30

FY17

20

FY18

39

52

99

63

60

FY19

FY20

FY21

FY22

FY23

Underlying EBITDA, US$/dmt

Average Fortescue realised price, US$/dmt

Average underlying EBITDA, US$/dmt

62% Platts CFR Index, US$/dmt

Fortescue realised price, US$/dmt

Other income/Other expenses
Other income (US$50 million) predominantly reflects the 
favourable foreign currency exchange movements.

Depreciation, interest and tax
Key non-operating matters forming part of the financial 
result include:

Other expenses reflect the movement in equity accounted 
investments, and the write-off of exploration and 
development expenditure.

Impairment expense
At 30 June 2023, an impairment expense of US$1,037 million 
was recognised for the Iron Bridge Cash Generating Unit 
(CGU) (post tax US$726 million). The impairment expense 
reflects inflationary cost pressures, increase in discount 
rates and timing of project ramp-up. Key details of the 
Iron Bridge impairment is within note 12(a) of the financial 
statements.

•  Depreciation and amortisation of US$1,744 million is up  

14 per cent on the prior period (FY22: US$1,528 million) as 
a result of the commissioning of assets and an increase in 
production compared to FY22. 

•  Net finance expenses of $126 million for FY23 (US$160 
million in FY22), reflecting interest income of US$149 
million.

•  Income tax expense for FY23 of US$2,090 million 
represents an effective tax rate of 30.4 per cent  
(FY22: US$2,649 million, effective tax rate of 30 per cent). 
Income tax expense has decreased in line with underlying 
financial performance and reflects the Iron Bridge 
impairment. 

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FORTESCUE  FY23 ANNUAL REPORT    |    41

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL POSITION AND  
CAPITAL MANAGEMENT

Key metrics

Borrowings

Lease liabilities

Total debt

Cash and cash equivalents

Net debt 

Equity

Key ratios

Gearing, %

Net gearing, %

1 Notes to the accompanying financial statements.

DEBT AND LIQUIDITY

Note1

9

9

9

9

2023 
US$m

4,587

734

5,321

4,287

1,034

17,998

2022 
US$m

5,348

755

6,103

5,224

879

17,345

23

5

26

5

Debt
Fortescue’s balance sheet includes low-cost debt which is at investment-grade terms. The debt capital structure allows 
optionality and flexibility to fund future growth.

Revolving credit facility

The revolving credit facility of US$1,025 million remains undrawn at 30 June 2023. On 5 October 2022, the Company 
completed an amendment to the facility’s reference rate, other repayment terms remained unchanged. The revolving credit 
facility was indexed to London Interbank Offered Rate (LIBOR) and under the amendment the reference rate changed to the 
Secured Overnight Financing Rate (SOFR).  

Syndicated term loans

An amendment and restatement of the existing syndicated term loan was completed on 5 October 2022. The amendment 
included replacement of the reference rate of LIBOR with the SOFR, other repayment terms remain unchanged.

An additional syndicated term loan facility was executed in December 2022 to the value of US$500 million, being available to 
draw until December 2023. If drawn, interest would accrue based on a variable rate linked to SOFR plus a fixed margin, with 
the principal due at maturity date of June 2027. This syndicated term loan facility was undrawn as at 30 June 2023.

FORTESCUE  FY23 ANNUAL REPORT    |    42

Operating and financial reviewFinancial position and capital management

Debt (continued)

Senior unsecured notes

In May 2023, Fortescue repaid its US$750 million 2024 senior unsecured notes from cash on hand. 

The Company’s debt maturity profile at 30 June 2023 is set out in the table below. Fortescue has no financial 
maintenance covenants across all instruments. 

Debt maturity profile (US$m)

1,500

978

600

700

800

FY24

FY25

FY26

FY27

FY28

FY29

FY30

FY31

FY32

FY33

Senior unsecured notes

Syndicated term loan

Green senior unsecured note

Green Bond

Eligible Project allocation

The net proceeds from the US$800m inaugural Green Bond are to be applied to Eligible Green Projects pursuant to 
Fortescue’s Sustainability Financing Framework. These green projects will be used to fund Fortescue’s decarbonisation. 
The allocation across eligible project categories is in the table below.

Fortescue has allocated US$414 million (FY22: US$305m) in net proceeds from the issuance of its Green Bond as at  
30 June 2023 to Eligible Green Projects as defined within the Sustainability Financing Framework. Fortescue is responsible 
for the completeness, accuracy, and validity of the information and metrics presented below.

Eligible Project1

Eligible Category

Region

Fortescue WAE battery systems²

Energy storage

UK / Australia

Pilbara Generation Project

Renewable energy

Pilbara Transmission Project

Renewable energy

Green Fleet Energy Hub

Clean transportation

Battery Electric Locomotives

Clean transportation

Australia

Australia

Australia

Australia

Total allocated

Total unallocated

Cumulative spend at

30 June 2023 
US$m

30 June 2022 
US$m

205

76

60

58

15

414

386

205

20

51

24

5

305

495

1    Represents cumulative, incurred spend to date. Basis of preparation: Eligible Projects outlined above have been determined in accordance with 

Fortescue’s Sustainability Financing Framework (as announced on 9 November 2021) which is available on Fortescue’s website. Transmission projects 
are apportioned based on the percentage of the network powered by renewable energies. The amount attributable to Fortescue WAE was based on 
forecast revenue at acquisition.

2    Represents investment in the development of Fortescue WAE battery storage solutions in countries including the UK and Australia.

FORTESCUE  FY23 ANNUAL REPORT    |    43

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Financial position and capital management

Eligible Project details

Fortescue WAE battery systems: The acquisition of Fortescue WAE enables us to accelerate the decarbonisation of its 
mining fleet as well as establish a new business growth opportunity.

Pilbara Generation Project:  The solar generation component of the energy generation from Fortescue’s Pilbara Energy 
Connect project. This comprises the installation of a 100MW solar photvoltaic (PV) array.

Pilbara Transmission Project: The transmission of solar generated energy from Fortescue’s Pilbara Energy Connect Project 
(this excludes any transmission from gas fired energy generation).

Green Fleet Energy Hub: The Green Fleet Energy Hub includes the development of a 1.5MW Hydrogen Refuelling Station at 
Christmas Creek to power 10 hydrogen passenger coaches and associated infrastructure.

Battery Electric Locomotives: The decarbonisation of our rail operations with the purchase of two battery electric 
locomotives, and research into the development of the Infinity Train.

Liquidity
At 30 June 2023, Fortescue had US$5,812 million of liquidity available including US$4,287 million of cash on hand,  
US$1,025 million available under the revolving credit facility and US$500 million on the undrawn syndicated term loan.  
Total debt of US$5,321 million, inclusive of US$734 million of lease liabilities, represents gross gearing of 23 per cent.

Cash generated from operations of US$10,016 million was five per cent lower than the prior period, largely as a result of lower 
underlying EBITDA.

Net cash flows from operations include net interest payments of US$205 million (FY22: US$202 million) and income tax paid 
of US$2,379 million (FY22: US$3,667 million). 

Capital expenditure and investments including joint operations and Fortescue Energy investments was US$3,181 million for 
the financial year (FY22: US$3,074 million) reflecting ongoing expenditure on growth projects including Iron Bridge and the 
Belinga project, and acquisitions within Fortescue Energy.

Cash flows

Cash generated from operations

Net cash flows from operating activities

Capital expenditure and investments (including joint operations)1

Free cash flow

2023
US$m

10,016

7,432

(3,181)

4,251

2022
US$m

10,515

6,646

(3,074)

3,572

1    Capital expenditure (including joint operations) comprises cash payments for property, plant and equipment and the acquisition of investments.

FORTESCUE  FY23 ANNUAL REPORT    |    44

Operating and financial reviewFinancial position and capital management

Dividends and shareholder returns
In September 2022, Fortescue paid a fully franked final dividend of 121 Australian cents per share for the financial year ended 
30 June 2022. 

On 15 February 2023, Fortescue declared a fully franked interim dividend of 75 Australian cents per share, paid in March 
2023. 

For the year ended 30 June 2023, Fortescue generated underlying earnings of 180 US cents per share (FY22: 201 US cents 
per share). On 28 August 2023, the Directors declared a fully franked final dividend of 100 Australian cents per share for the 
financial year ended 30 June 2023. Total dividends of 175 Australian cents for the current period represents a payout ratio  
of 65 per cent of underlying net profit after tax, in line with the Company’s policy of maintaining a payout ratio of between 50 
and 80 per cent. 

Underlying net profit after tax¹, US$ millions

Underlying earnings per share, US cents per share

Underlying earnings per share, AUD cents per share2

Return on equity3, %

Interim dividend, AUD cents per share

Final dividend, AUD cents per share

Total dividend, AUD cents per share

Dividend payout ratio, %

2023

5,522

180

267

31

75

100

175

65

2022

6,197

201

277

35

86

121

207

75

1   Underlying net profit after tax is calculated as statutory net profit after tax adjusted to add back the US$726 million post tax impairment expense on the 

Iron Bridge CGU which is considered a significant non-cash and non-recurring item.

2   Australian dollar earnings per share is calculated by translating the US dollar earnings per share at the average exchange rate for the period of  

AUD:USD 0.6737 (FY22: AUD:USD 0.7259).

3   Return on equity has been calculated on an underlying basis.

Total dividends declared for the current period represents a payout ratio of 65 per cent of underlying net profit after tax,  
in line with the Company’s guidance of maintaining a payout ratio between the 50 to 80 per cent range. 

Dividends declared and payout ratios

A$/share

Payout ratio

62%

52%

38%

36%

21%

17%

16%

0.07

0.08

0.10

21%

0.20

0.05

0.15

0.45

0.23

78%

77%

80%

3.58

75%

65%

1.76

1.14

2.07

1.00

0.75

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23

Dividend, A$/share - paid

Dividend, A$/share - declared

Payout ratio - underlying NPAT

FORTESCUE  FY23 ANNUAL REPORT    |    45

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Financial position and capital management

Share buy-back scheme
In 2018, Fortescue announced the establishment of an on-market share buy-back program of up to A$500 million which 
was extended in October 2020 for an unlimited duration. The maximum number of shares which can be bought back is 
determined periodically by the Company’s 10/12 limit, being that a company cannot buy back more than 10 per cent of its 
voting shares within the span of any 12 month period. 

Fortescue retains the option to undertake an on-market share buy-back. During FY23, Fortescue acquired none of its own 
shares on market under the share buy-back program.

FORTESCUE  FY23 ANNUAL REPORT    |    46

Operating and financial reviewORE RESERVES AND 
MINERAL RESOURCES
2023

03

TRUCK INFO

Iron Ore 
Shipped 
192.0mt

FORTESCUE  FY23 ANNUAL REPORT    |    47

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Ore Reserves and Mineral Resources
Reporting is grouped by operating and development 
properties and includes both hematite and magnetite 
deposits.

Hematite Ore Reserves total 1.87 billion tonnes (bt) of dry 
product at an average iron (Fe) grade of 57.4%. Combined 
Hematite Mineral Resources total 13.37bt (dry in-situ) at an 
average Fe grade of 56.8%.

Magnetite Ore Reserves total 843 dry in-situ million tonnes 
(mt) at an average mass recovery of 29.9% for a 67.3% Fe 
grade product. Magnetite Mineral Resources total 6.5bt  
(dry in-situ) at an average mass recovery of 22.7%.

Operating property Ore Reserves and Mineral Resources 
have all been reported and classified in accordance with the 
guidelines of the 2012 edition of the Australasian Code for 
Reporting of Exploration Results, Mineral Resources and 
Ore Reserves (the JORC Code). Accordingly, the information 
in these sections should be read in conjunction with the 
respective explanatory Mineral Resource and Ore Reserve 
information (Fortescue ASX release dated 26 August 2022).

Development property Mineral Resources have been 
reported and classified in accordance with the JORC Code. 
The development property Mineral Resources are detailed 
in Fortescue ASX releases dated 26 August 2022, 27 August 
2021, 21 August 2020, 23 August 2019, 17 August 2018,  
18 August 2017, 8 January 2015 and 20 May 2014, which 
include supporting technical data.

Magnetite Mineral Resources have been reported and 
classified in accordance with the JORC Code. The Mineral 
Resources quoted in this report should be read in conjunction 
with the supporting technical information contained in the 
corresponding ASX release dated 26 August 2022.

The Ore Reserve and Mineral Resource estimation processes 
followed internally are well established and are subject to 
systematic internal peer review, including calibration against 
operational outcomes. Independent technical reviews and 
audits are undertaken on an as-required basis as part of 
Fortescue’s risk management process.

In addition to routine internal audits and peer review, 
auditing of the Ore Reserve and Mineral Resource estimates 
is addressed as a sub-set of the annual internal audit plan 
approved by the Board Audit and Risk Management and 
Sustainability Committee (ARMSC). Specific auditing of the 
Ore Reserve process was performed in 2011, 2013, 2015, 
2016, 2017, 2019, 2021, 2022 and 2023. These audits were 
managed by Fortescue’s internal audit service provider with 
external technical subject experts. The 2015, 2016, 2017, 2019, 
2021, 2022 and 2023 Ore Reserves audits were carried out 
by independent external technical consultants. In addition, 
specific auditing of Mineral Resource models was undertaken 
in 2015, 2016, 2017, 2018, 2019, 2020, 2022 and 2023.  

The ARMSC also monitors the Ore Reserve and Mineral 
Resource status and recommends it to the Board for approval. 
The annual Ore Reserve and Mineral Resource updates are 
a prescribed activity within the annual Corporate Planning 
Calendar that includes a schedule of regular Executive 
engagement meetings to approve assumptions and guide the 
overall process.

Tonnage and quality information contained in the following 
tables have been rounded and as a result the figures may not 
add up to the totals quoted.

Ore Reserves Operating Properties – 
Hematite
The combined Chichester, Solomon, and Western Hub 
Hematite Ore Reserves for 2023 are estimated to total 
1,866mt at an average Fe grade of 57.4%.

The Ore Reserve is quoted as of 30 June 2023 and is 
inclusive of ore and product stockpiles at mines. Product 
stockpiles at port have been excluded from contributing to 
Ore Reserves. The proportion of higher confidence Proved 
Ore Reserve has decreased slightly to 994mt (from 1,018mt 
in 2022) after accounting for the production depletion and 
ongoing in-fill drilling.

The Chichester Hub (Cloudbreak and Christmas Creek 
deposits) contains 985mt at an average Fe grade of 57.2%, a 
net decrease of 93mt primarily due to depletion. Proved Ore 
Reserve constitutes 57.6% of the Chichester Ore Reserve, 
an increase of 1.4% as compared to 2022 Ore Reserves as 
reported in 2022. While the Cloudbreak and Christmas 
Creek deposits are quoted separately for historical reasons, 
they effectively represent a single deposit with ore generally 
directed to the most proximal of the three available ore 
processing facilities (OPFs).

The Ore Reserve estimate for the Solomon Hub is 668mt at 
an average Fe grade of 56.9%, a minor decrease of 14mt after 
accounting for depletion and increase in mineral resource 
tonnes, along with pit design modifications. Proved Ore 
Reserves comprise 37% of the tonnage in the total Solomon 
Reserve, an increase of about 6% as compared to 2022 Ore 
Reserves.

The Ore Reserve for the Western Hub (Eliwana and Flying 
Fish) deposit is estimated to be 213mt at an average Fe 
grade of 59.4%. The contribution (tonnes and grades) of the 
Western Hub alone has reduced, resulting in a net decrease 
of 14mt reflecting depletion, exclusion of areas as a result 
of heritage management. Proved Ore Reserves comprise 
83% of the tonnage in the total Western Hub Ore Reserve, 
which is a minor decrease of 2% as compared to 2022 Ore 
Reserves. 

The 2023 Hematite Ore Reserve estimates were subject to 
comprehensive review and update addressing:

•  Ore depletion as a result of sales (decrease).

•  Exclusions of sites of heritage significance, permanent 
infrastructures (OPF, tailings storage facility etc) and 
tenement boundaries. 

•  Revision of ore loss and dilution factors based on 12 

months of operational history at all mines. 

•  Revision to the processing response through all OPFs 

based on updated metallurgical test work and operational 
history. 

•  Re-optimisation of mine geometries to maximise the 
benefit of changes to the resource base resulted in 
improvement to the economic viability of extracting ore.

•  A revised Life of Mine (LOM) plan that addresses the listed 

items and incorporates the latest information on long 
term product strategy, including the Western Pilbara Fines 
60.3% Fe product and Fortescue Lump.

FORTESCUE  FY23 ANNUAL REPORT    |    48

Ore Reserves and Mineral ResourcesOre Reserves Operating Properties – Hematite 

30 JUNE 2023

30 JUNE 2022

Product 
tonnes 
(mt)

Iron 
Fe  
%

Silica 
SiO₂  
%

Alumina 
Al2O3  
%

Phos 
P  
%

LOI  
%

Product  
tonnes 
(mt)

Iron 
Fe  
%

Silica 
SiO2  
%

Alumina 
Al2O3  
%

Phos 
P  
%

LOI  
%

Cloudbreak

Proved

Probable

Total

270

91

361

Christmas Creek

Proved

Probable

Total

297

 327

624

57.6

56.6

57.3

57.2

57.2

57.2

Sub-total Chichester Hub

Proved

Probable

Total

Firetail

Proved

Probable

Total

568

418

985

16 

35 

51 

Kings and Queens

Proved

Probable

Total

233

383

616

Sub-total Solomon Hub

Proved

Probable

Total

Western Hub

Proved

Probable

Total

249

419

668

177

36

213

57.4

57.0

57.2

59.3

58.5

58.7

56.7

56.8

56.7

56.8

56.9

56.9

59.4

59.3

59.4

5.12

5.57

5.23

5.96

6.05

6.01

5.55

5.95

5.72

5.61

6.37

6.13

6.80

6.90

6.86

6.74

6.86

6.81

5.01

4.71

4.96

2.82

3.12

2.89

2.63

2.91

2.78

2.72

2.96

2.82

2.20

2.60

2.47

2.95

2.91

2.93

2.91

2.89

2.89

2.72

2.62

2.70

Total Ore Reserves Operating Properties – Hematite

Proved

Probable

Total

994

872

1,866

57.6

57.1

57.4

5.74

6.33

6.02

2.77

2.91

2.83

Notes in reference to table

0.056

0.056

0.056

0.052

0.054

0.053

0.054

0.055

0.054

0.127

0.116

0.119

0.080

0.082

0.081

0.082

0.084

0.084

0.115

0.069

0.107

0.072

0.070

0.071

8.1

8.4

8.2

7.9

7.7

7.8

8.0

7.9

7.9

6.9

 7.1

7.0

8.9

8.8

8.8

8.8

8.6

8.7

6.6

6.9

6.6

7.9

 8.2

 8.1

291

99

389

316

373

688

606

471

1,078

2

62

64

215

402

618

218

464

682

194

33

227

1,018

969

1,986

57.6

56.7

57.3

57.0

57.2

57.1

57.3

57.1

57.2

58.9

58.8

58.9

56.4

56.8

56.7

56.5

57

56.9

60.1

60.2

60.1

57.6

57.2

57.4

5.15

5.66

5.28

6.27

6.08

6.17

5.74

6.00

5.85

6.51

5.90

5.92

6.63

6.52

6.56

6.63

6.44

6.50

4.63

4.21

4.57

5.71

6.15

2.69

2.88

2.74

2.89

3.08

2.99

2.80

3.04

2.90

2.70

2.44

2.44

2.69

2.86

0.055

0.061

0.057

0.046

0.050

0.048

0.050

0.052

0.051

0.133

0.117

0.117

0.078

0.080

2.80

0.079

2.69

2.81

2.77

2.58

2.40

2.56

2.73

2.91

0.078

0.085

0.083

0.125

0.080

0.118

0.071

0.069

5.92

2.82

0.070

7.8

8.0

7.9

7.9

7.6

7.7

7.9

7.7

7.8

5.5

6.7

6.6

9.5

8.8

9.0

9.4

8.5

8.8

6.1

6.5

6.1

7.9

8.0

7.9

•  The diluted mining models used to report the 2023 Ore Reserves are based on regional Mineral Resource models completed in 2016 for Christmas Creek, 
2016 for Cloudbreak, 2021 for Firetail, 2019 for Queens, 2017 for Kings, 2019 for Kutayi and 2019 for Eliwana. The regional models for the operating sites 
were updated for local pit areas as infill drilling is completed, with updates included through to 2023.

•  Diluted mining models are validated by reconciliation against historical production.

•  Ore Reserves are inclusive of ore stockpiles at the mines which total approximately 62.7mt on dry product basis.

•  The Chichester Ore Reserve is inclusive of the Cloudbreak, Christmas Creek and Kutayi BID deposits. Selected Christmas Creek Ore Reserves will be 

directed to the Cloudbreak OPF to optimise upgrade performance and optimise Cloudbreak and Christmas Creek OPF utilisation.

•  The Western Hub Ore Reserve is inclusive of the Eliwana and Flying Fish deposits.  

•  As part of Fortescue’s ongoing review process, areas of heritage significance (where appropriate) have been excluded from the Ore Reserves.

•  Due to opportunistic blending and stockpiling, the Ore Reserve is not reported at a fixed cut-off and Ore Reserves are reported above a range of ROM Fe 
cut-off grades from 52% Fe to 54% Fe depending on the grade tonnage profile available from various deposits to meet the product quality specifications.

FORTESCUE  FY23 ANNUAL REPORT    |    49

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Ore Reserves Operating Properties – 
Magnetite
The 2023 Ore Reserves for Magnetite are from Iron Bridge. 
Ore Reserves for the project total 843mt at an average mass 
recovery of 29.9% for a 67.3% Fe grade product. The Ore 
Reserves are quoted as at 30 June 2023, on a dry in-situ 
tonnes basis prior to processing.

The Mineral Resource model for Iron Bridge was developed 
by Snowden Mining Industry Consultants in conjunction with 
Fortescue’s internal technical team during February and 
March 2022.

The Ore Reserves estimate was developed in May and June 
2023 by the Iron Bridge technical team on the basis of the 
2022 resource model using detailed information on mining, 
geotechnical and metallurgical processing parameters 
and latest cost assumptions, aligned with the proposed 
operations strategy.

Within North Star mining pits, mining within 100m of the 
Pilbara Leaf Nosed Bat (PLNB) cave identified as Cave 13 

is prohibited by the current Stage 2 Ministerial Approval 
(Condition 10) until such time it can be demonstrated that 
ground disturbing activity in the area maintains the viability 
of population of PLNB. Primary environmental approvals for 
the Glacier Valley are in progress and currently with state 
and commonwealth regulators. At this stage, neither of the 
above is expected to have a material impact on Ore Reserves 
as plans have been developed and action underway to 
address each of the points. As part of the mine scheduling 
process, appropriate access delays have been applied to 
ore inventory in North Star mining pit within 100m of PLNB 
cave and Glacier Valley mining area to model the timeframe 
required for approvals.

The Ore Reserves have been estimated from Measured and 
Indicated Mineral Resources from within the North Star, 
Eastern Limb and Glacier Valley mining areas. All Magnetite 
Ore Reserves are classified as Probable Reserves due to 
the lack of full-scale production history, as no sales have 
occurred for magnetite as at 30 June 2023 and adjusted for 
any depletion in the prior 12-month period.

Ore Reserves Operating Properties – Magnetite

JUNE 2023

JUNE 2022

In-situ  
tonnes 
(mt)

DTR 
mass 
recovery 
%

Product 
tonnes 
(mt)

Product 
Iron Fe  
%

Product 
Silica 
SiO2 
%

Product 
Alumina 
Al2O3 
%

In-situ  
tonnes 
(mt)

DTR 
mass 
recovery 
%

Product 
tonnes 
(mt)

Product 
Iron Fe  
%

Product 
Silica 
SiO2 
%

Product 
Alumina 
Al2O3 
%

North Star and Eastern Limb

Proved

Probable

Total

-

640

640

Glacier Valley

Proved

Probable

Total

-

203

203

-

30

30

-

29

29

-

194

194

-

58

58

-

67.1

67.1

-

68.0

68.0

-

5.6

5.6

-

4.5

4.5

Total Ore Reserves Operating Properties – Magnetite

Proved

Probable

Total

-

843

843

-

30

30

-

252

252

-

67.3

67.3

-

5.4

5.4

Notes in reference to table

-

0.3

0.3

-

0.2

0.2

-

0.3

0.3

-

642

642

-

202

202

-

844

844

-

30

30

-

28

28

-

30

30

-

193

193

-

57

57

-

250

250

-

67.1

67.1

-

68.0

68.0

-

67.3

67.3

-

5.6

5.6

-

4.5

4.5

-

5.4

5.4

-

0.3

0.3

-

0.2

0.2

-

0.3

0.3

•  All current magnetite Ore Reserves fall within the Iron Bridge Joint Venture. As per the Iron Bridge project agreements, Fortescue owns 69% of the reported 

Total Magnetite Ore Reserve estimates within the Iron Bridge Joint Venture.

•  Magnetite Ore Reserves are derived from Measured and Indicated Mineral Resources reported within a defined pit design.

•  Magnetite Ore Reserves are based on Mass Recovery expressed as a 17% Davis Tube Recovery (DTR) cut-off.

•  Magnetite Ore Reserves are reported on an in-situ dry-tonnage basis.

•  Tonnage information has been rounded and as a result the figures may not add up to the totals quoted.

•  As part of Fortescue’s ongoing review process, areas of heritage significance (where appropriate) have been excluded from the Ore Reserves.

FORTESCUE  FY23 ANNUAL REPORT    |    50

Ore Reserves and Mineral Resources  
Mineral Resources Operating Properties 
– Hematite
Mineral Resources for the operating properties, including 
the Chichester, Solomon and Western Hubs, are stated on a 
dry in-situ tonnage basis. The Mineral Resources, including 
stockpiles, are quoted inclusive of Ore Reserves.

tonnage in the Measured and Indicated Mineral Resource 
categories.  

The Solomon Hub Mineral Resource is estimated to be 
1,959mt at an average Fe grade of 55.3%, with 67% of the 
tonnage in the Measured and Indicated Mineral Resource 
categories.

As at 30 June 2023, the total Mineral Resource for the 
Chichester, Solomon and Western Hub is estimated to be 
5,091mt at an average Fe grade of 56.2%, a decrease of 75mt 
over that stated in the prior year. There was no change in the 
proportion of higher confidence Measured and Indicated 
Mineral Resources (68%).

The Chichester Hub Mineral Resource is estimated to be 
2,233mt at an average Fe grade of 56.3%, with 80% of the 

The Western Hub Mineral Resource is estimated to be 
900mt at an average Fe grade of 57.9%, with 40% of the 
tonnage in the Measured and Indicated Mineral Resource 
categories.

As part of Fortescue’s ongoing review process, areas 
of heritage significance (where appropriate) have been 
excluded from the Mineral Resources.

Mineral Resources Operating Properties – Hematite

30 JUNE 2023

30 JUNE 2022

In-situ  
tonnes 
(mt)

Iron 
Fe  
%

Silica 
SiO2  
%

Alumina 
Al2O3  
%

Phos 
P  
%

Loss on 
ignition 
LOI  
%

In-situ  
tonnes 
(mt)

Iron 
Fe  
%

Silica 
SiO2  
%

Alumina 
Al2O3  
%

Phos 
P  
%

Loss on 
ignition 
LOI  
%

Cloudbreak

Measured

Indicated

Inferred

Total

478

191

83

751 

Christmas Creek

Measured

Indicated

Inferred

502

620

360

Total

1,482

56.7

56.2

55.7

56.2

Sub-total Chichester Hub

Measured

Indicated

Inferred

980

810 

443 

56.8

56.1 

55.7 

Total

2,233 

56.3 

Firetail

Measured

Indicated

Inferred

Total

30 

92 

56 

178 

Kings and Queens

Measured

Indicated

Inferred

424

765

591

Total

1,780 

58.2 

56.8 

55.1 

56.5 

55.2

55.3

54.9

55.1 

57.0

56.0

55.7

5.71

6.34

5.84

3.25

3.52

3.80

0.057

0.057

0.069

8.2

8.2

9.1

56.6 

5.88 

3.38 

0.059 

8.3 

6.37

6.58

6.75

6.55

6.05

6.52 

6.58 

6.33 

6.48 

8.01 

8.27 

7.84 

8.00

8.21

8.67

8.31 

3.20

3.62

3.79

3.52

3.23

3.60 

3.79 

3.47 

2.66 

3.01 

4.24 

3.34 

3.40

3.33

3.82

0.051

0.052

0.055

0.052

0.054

0.053 

0.058 

0.054 

0.123 

0.125 

0.109 

0.119 

0.080

0.083

0.076

3.51 

0.080 

8.0

7.9

7.9

7.9

8.1

8.0 

8.1 

8.0 

7.0 

7.0 

7.9 

7.3 

9.0

8.8

8.2

8.7 

493

198

68

759

515

650

364

1,529

1,008

848

432

2,288

9

126

73

207

379

785

609

1,773

57.0

55.9

55.7

56.6

56.6

56.2

55.7

56.2

56.8

56.1

55.7

56.3

57.4

57.4

55.9

56.9

55.2

55.3

54.8

55.1

5.78

6.66

6.28

6.05

6.54

6.56

6.78

6.60

6.17

6.58

6.70

6.42

7.40

7.33

7.73

7.48

7.85

8.12

8.77

8.29

3.26

3.45

3.90

3.37

3.16 

3.63 

3.78 

3.51 

3.21

3.59

3.80

3.46

3.71

2,85

3.90

3.25

3.26

3.36

3.74

3.47

0.057

0.058

0.063

0.058

0.050 

0.052 

0.055 

0.052 

0.053

0.053

0.056

0.054

0.119

0.124

0.111

0.119

0.08

0.084

0.076

0.080

8.2

8.1

8.6

8.2

7.9 

7.8 

7.9 

7.9 

8.1

7.9

8.0

8.0

6.1

7.1

7.6

7.2

9.3

8.8

8.3

8.8

FORTESCUE  FY23 ANNUAL REPORT    |    51

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Mineral Resources Operating Properties – Hematite – continued

30 JUNE 2023

30 JUNE 2022

In-situ  
tonnes 
(mt)

Iron 
Fe  
%

Silica 
SiO2  
%

Alumina 
Al2O3  
%

Phos 
P  
%

Loss on 
ignition 
LOI  
%

In-situ  
tonnes 
(mt)

Iron 
Fe  
%

Silica 
SiO2  
%

Alumina 
Al2O3  
%

Phos 
P  
%

Loss on 
ignition 
LOI  
%

  Sub-total Solomon Hub

Measured

Indicated

Inferred

454

857

647 

Total

1,959 

Western Hub

Measured

Indicated

Inferred

Total

279 

82 

539 

900 

55.4

55.4

54.9 

55.3 

58.8 

58.4 

57.4 

57.9 

7.90

8.19

8.63 

8.27 

5.5 

5.9 

6.4 

6.09 

3.35

3.30

0.083

0.087

3.85 

0.079 

3.49 

0.084 

2.83 

2.88 

3.54 

3.26 

0.111 

0.076 

0.095 

0.098 

  Total Mineral Resources Operating Properties – Hematite

Measured

1,712 

Indicated

Inferred

1,750 

1,629 

56.8 

55.9 

56.0 

Total

5,091 

56.2 

6.45 

7.31 

7.35 

7.03 

3.20 

3.42 

3.73 

0.071 

0.071 

0.078 

3.44 

0.073 

8.8

8.6

8.2 

8.5 

6.7 

6.8 

7.0 

6.9 

8.0 

8.2 

7.8 

8.0 

388

911

682

1981

262

73

562

897

1,659

1,832

1,676

5,166

55.2

55.6

55

55.3

59.1

58.6

57.6

58.1

56.8

55.9

56.0

56.2

7.84

8.01

8.66

8.2

5.34

5.97

6.32

6.01

6.43

7.27

7.37

7.03

3.27

3.29

3.76

0.081

0.089

0.08

3.44

0.084

2.72

2.62

3.48

3.19

3.15

3.40

3.68

3.41

0.122

0.082

0.094

0.101

0.071

0.072

0.078

0.074

9.3

8.6

8.3

8.6

6.5

6.6

7.0

6.8

8.1

8.2

7.8

8.0

Notes in reference to table

•  Chichester Hub Mineral Resources are quoted above a cut-off of 53.5% Fe and Solomon Hub and Western Hub Mineral Resources  

are quoted above a cut-off grade of 51.5% Fe.

•  The Measured Mineral Resource estimate includes mine stockpiles totalling approximately 74mt.

•  Mineral Resources are reported inclusive of Ore Reserves.

•  Tonnage information has been rounded and as a result the figures may not add up to the totals quoted.

•  The Western Hub Mineral Resource is inclusive of the Eliwana and Flying Fish deposits.

Mineral Resources Development 
Properties – Hematite
Updates have been announced for all reporting hubs in the 
development properties Mineral Resources as a result of 
exploration drilling. Updated estimates for the White Knight 
and Mount Lewin deposits in the Greater Chichester Hub 
have resulted in an increase of 128mt. An updated estimate 
at the Wyloo North deposit in the Greater Western Hub has 
resulted in an increase of 10mt. Updated estimates at the 
Mindy South and Triton deposits and estimates for the new 
Panhandle, Earendil, Indabiddy, Prairie Heights and McPhee 
Creek deposits in the Pilbara Other Hub have resulted in an 
increase of 374mt. Areas identified as containing sites of 

heritage significance have been excluded from reporting at 
deposits across all hubs. This update is an overall decrease 
of 101mt to the development properties Mineral Resources 
and is reported in accordance with the JORC Code as 
identified in the Fortescue ASX releases when each Mineral 
Resource was announced. 

As of 30 June 2023, the total Mineral Resource for 
development properties, which excludes and is additional 
to the operating properties, is estimated to be 8,281mt at 
an average Fe grade of 57.1%. This comprises 562mt for 
the Greater Chichester deposits, 2,051mt for the Greater 
Solomon deposits, 1,969mt for the Greater Western deposits, 
2,214mt for the Nyidinghu deposit and 1,486mt for the 
Pilbara Other deposits.

FORTESCUE  FY23 ANNUAL REPORT    |    52

Ore Reserves and Mineral Resources  
Mineral Resources Development Properties – Hematite

30 JUNE 2023

30 JUNE 2022

In-situ  
tonnes 
(mt)

Iron 
Fe  
%

Silica 
SiO2  
%

Alumina 
Al2O3  
%

Phos 
P  
%

Loss on 
ignition 
LOI 
 %

In-situ  
tonnes 
(mt)

Iron 
Fe  
%

Silica 
SiO2  
%

Alumina 
Al2O3  
%

Phos 
P  
%

Loss on 
ignition 
LOI  
%

Greater Chichester

Measured

Indicated

Inferred

Total

-

-

562

562

Greater Solomon

Measured

Indicated

Inferred

Total

-

254

1,796

2,051

Greater Western

Measured

Indicated

Inferred

Total

Nyidinghu

Measured

Indicated

Inferred

Total

Pilbara Other

Measured

Indicated

Inferred

Total

-

99

1,870

1,969

22

963

1,228

2,214

-

-

1,486

1,486

-

-

56.0

56.0

-

56.6

56.8

56.8

-

59.1

56.8

56.9

59.7

57.9

57.2

57.5

-

-

57.6

57.6

-

-

7.42

7.42

-

6.70

6.89

6.87

-

5.33

6.12

6.08

3.49

4.56

5.03

4.81

-

-

6.34

6.34

-

-

3.70

3.70

-

3.45

3.73

3.69

-

2.45

2.98

2.95

2.08

3.09

3.39

3.25

-

-

2.65

2.65

-

-

0.061

0.061

-

0.083

0.082

0.082

-

0.162

0.082

0.086

0.141

0.150

0.148

0.148

-

-

0.106

0.106

-

-

7.2

7.2

-

8.3

7.3

7.4

-

7.1

9.0

8.9

8.1

8.6

8.8

8.7

-

-

7.9

7.9

Total Mineral Resources Development Properties – Hematite

Measured

Indicated

Inferred

Total

22

1,317

6,942

8,281

59.7

57.7

57.0

57.1

3.49

5.03

6.28

6.07

2.08

3.11

3.23

3.21

0.141

0.138

0.097

0.104

8.1

8.5

8.1

8.2

-

-

433

433

-

254

2,162

2,416

-

99

1,860

-

-

56.4

56.4

-

56.6

56.8

56.8

-

59.1

56.7

1,960

56.8

22

963

1,476

2,461

-

-

1,112

1,112

22

1,317

7,043

8,382

59.7

57.9

57.2

57.5

-

-

57.9

57.9

59.7

57.7

57.0

57.1

-

-

7.10

7.10

-

6.70

6.88

6.86

-

5.32

6.03

5.99

3.53

4.57

5.09

4.87

-

-

6.51

6.51

3.53

5.04

6.24

6.04

-

-

3.77

3.77

-

3.45

3.76

3.72

-

2.45

2.99

2.96

2.09

3.09

3.35

3.24

-

-

2.56

2.56

2.09

3.11

3.28

3.25

-

-

0.058

0.058

-

0.082

0.082

0.082

-

0.162

0.081

-

-

7.0

7.0

-

8.3

7.3

7.4

-

7.1

9.1

0.085

9.0

0.141

0.150

0.145

0.147

-

-

0.111

0.111

0.141

0.138

0.098

0.104

8.1

8.6

8.8

8.7

-

-

7.5

7.5

8.1

8.4

8.1

8.1

Notes in reference to table

•  The Greater Chichester Mineral Resource includes the Investigator, White Knight and Mount Lewin deposits.

•  The Greater Solomon Mineral Resource includes the Serenity, Sheila Valley, Mount MacLeod, Cerberus, Stingray and Raven deposits.

•  The Greater Western Mineral Resource includes the Flying Fish South, Vivash, Cobra, Lora, Zorb, Farquhar, Elevation, Boolgeeda CID and Wyloo North deposits.

•  The Pilbara Other Mineral Resource includes the Fig Tree, Mindy South, Triton, Wonmunna, Panhandle, Earendil, Indabiddy, Prairie Heights and McPhee Creek 

deposits. 

•  Development property Mineral Resources are reported above a range of cut-off grades from 50% Fe to 56% Fe depending on the geological domain. Details of 

the cut-offs were provided when each Mineral Resource was first announced.

•  Tonnage information has been rounded and as a result the figures may not add up to the totals quoted.

FORTESCUE  FY23 ANNUAL REPORT    |    53

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Mineral Resources Operating Properties 
– Magnetite
The Mineral Resource model for the North Star, Eastern 
Limb, West Star and Glacier Valley deposits (69% Fortescue) 
was completed by Snowden Mining Industry Consultants in 
2022 and remains largely unchanged.  A group of heritage 
sites in the southern portion of the Glacier Valley area have 
been excluded from the Mineral Resource using engineered 
shapes to account for the pit slope.

The Mineral Resource for the South Star deposit was 
updated to incorporate additional drilling that was 
conducted in 2023. The South Star deposit is located 
along strike and to the south of Glacier Valley across 
two tenements, E45/4025 and E45/3084. One of these 

tenements, E45/4025, is held by Fortescue through its 
wholly owned subsidiary FMG Pilbara Pty Ltd. The drilling 
program undertaken during 2023 across E45/3084 and 
E45/4025 tenements, has increased the South Star Mineral 
Resource to 1,204mt (from 898mt in 2022) at 22.4% mass 
recovery, reported above a 9% mass recovery cut-off.

All magnetite Mineral Resources are reported within a 
high revenue factor pit shell (US$200/t) to constrain the 
reportable resource to mineralisation that has reasonable 
prospects for economic extraction by open-pit mining and 
has been adjusted for depletion of mined tonnes.

As of 30 June 2023, the total magnetite Mineral Resource 
is estimated to be 6,475mt (from 6,184mt in 2022) at an 
average mass recovery of 22.7%, reported above a 9% mass 
recovery cut-off.

FORTESCUE  FY23 ANNUAL REPORT    |    54

Ore Reserves and Mineral ResourcesMineral Resources Operating Properties – Magnetite 

30 JUNE 2023

30 JUNE 2022

u
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i

%

 North Star and Eastern Limb (M45/1226)

Measured

Indicated

Inferred

Total

256

780

2,274

3,310

69

69

69

69

177

538

25.7

24.6

1,569

23.8

31.2

30.2

29.8

2,284

24.2

30.0

Glacier Valley (M45/1244 & M45/1226)

Measured

Indicated

Inferred

Total

54

284

1,020

1,359

69

69

69

69

West Star (M45/1226)

Measured

Indicated

Inferred

Total

-

-

602

602

-

-

69

69

South Star (E45/3084)

Measured

Indicated

Inferred

Total

-

-

398

398

-

-

69

69

South Star (E45/4025)

Measured

Indicated

Inferred

Total

-

-

806

806

-

-

100

100

38

196

704

938

-

-

416

416

-

-

275

275

-

-

806

806

41.4

41.3

41.7

41.6

39.2

39.1

40.0

25.4

23.7

19.4

35.1

33.1

31.5

20.5

32.0

39.8

-

-

-

-

-

-

20.3

28.0

43.9

20.3

28.0

43.9

-

-

-

-

-

-

24.3

24.3

31.4

31.4

41.4

41.4

-

-

-

-

-

-

21.5

21.5

32.0

40.4

32.0

40.4

2.9

2.7

2.9

2.8

1.6

1.7

2.2

2.0

-

-

3.4

3.4

-

-

0.7

0.7

-

-

0.9

0.9

2.6

2.4

2.3

2.3

260

764

2,300

3,324

54

272

1,033

1,359

-

-

602

602

-

-

302

302

-

-

596

596

314

1,037

4,833

6,184

69

69

69

69

69

69

69

69

-

-

69

69

-

-

69

69

-

-

100

100

-

-

-

-

179

527

1,587

25.2

24.6

23.8

31.3

30.2

29.8

2,294

24.1

30.0

37

188

712

25.4

35.0

23.7

19.4

33.1

31.5

938

20.5

32.0

41.4

41.3

41.7

41.6

39.3

39.2

40.0

39.8

-

-

-

-

416

416

-

-

208

208

-

-

596

596

217

715

3,519

4,451

-

-

-

-

20.3

28.0

20.3

28.0

43.9

43.9

-

-

-

-

-

-

25.9

25.9

32.3

32.3

40.9

40.9

-

-

20.7

20.7

25.3

24.4

22.2

22.7

-

-

-

-

32.2

32.2

40.3

40.3

31.9

31.0

30.4

30.6

41.0

40.8

41.4

41.3

Total Mineral Resources Operating Properties – Magnetite

Measured

311

Indicated

1,064

Inferred

Total

5,100

6,475

-

-

-

-

215

734

25.6

24.4

31.9

31.0

3,769

22.2

30.4

4,718

22.7

30.6

41.0

40.8

41.4

41.3

Notes in reference to table

•  Magnetite Mineral Resources are reported above a 9% mass recovery cut-off, based on Davis Tube Recovery (DTR) test work.

•  Oxide mineralisation above 9% mass recovery comprises approximately 7% of the total Mineral Resource tonnage.

•  Magnetite Mineral Resources are reported within a high revenue factor pit shell (US$200/t) to constrain the resource to mineralisation that has 

reasonable prospects for economic extraction by open-pit mining.

•  Mineral Resources are reported on a dry, in situ tonnage basis.

•  Mineral Resources are reported inclusive of Ore Reserves.

•  Figures have been rounded and as a result may not add up to the totals quoted.

FORTESCUE  FY23 ANNUAL REPORT    |    55

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2.9

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1.6

1.7

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3.4

3.4

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0.6

0.6

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1.1

1.1

2.6

2.4

2.4

2.4

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y

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Competent Persons Statement
The detail in this report that relates to Hematite Mineral 
Resources is based on information compiled by Mr Stuart 
Robinson, Mr Nicholas Nitschke, Ms Erin Retz, Mr Stuart 
Badock, Ms Suzanne Caron and Mr John Graindorge, 
full-time employees and shareholders of Fortescue. Each 
provided technical input for Mineral Resource estimations.

The detail in this report that relates to the Magnetite 
Mineral Resources is based on information compiled by 
Mr John Graindorge, a full-time employee and shareholder 
of Fortescue. Mr Graindorge provided technical input for 
Mineral Resource estimations.

The detail in this report that relates to Hematite Ore 
Reserves is based on information compiled by Mr Santhosh 
Mulky and Mr Michael Fisher, full-time employees and 
shareholders of Fortescue.

Estimated Magnetite Ore Reserves for the Iron Bridge 
project for fiscal year 2023 were compiled by Mr Felex 
Wibowo and Mr Mudit Tandon, full-time employees and 
shareholders of Fortescue.

Mr Robinson is a Fellow of, and Mr Nitschke, Ms Retz, Mr 
Badock, Ms Caron, Mr Mulky, Mr Fisher, Mr Wibowo, Mr 
Tandon and Mr Graindorge are Members of the Australasian 
Institute of Mining and Metallurgy. Mr Graindorge is also a 
Chartered Professional (Geology). 

Mr Robinson, Mr Nitschke, Ms Retz, Mr Badock, Ms Caron, 
Mr Mulky, Mr Fisher, Mr Wibowo, Mr Tandon and Mr 
Graindorge have sufficient experience relevant to the style 
of mineralisation and type of deposit under consideration 
and to the activity which they are undertaking to qualify as 
a Competent Person as defined in the 2012 Edition of the 
‘Australasian Code for Reporting of Exploration Results, 
Mineral Resources and Ore Reserves’.

Mr Robinson, Mr Nitschke, Ms Retz, Mr Badock, Ms Caron, 
Mr Mulky, Mr Fisher, Mr Wibowo, Mr Tandon and Mr 
Graindorge consent to the inclusion in this report of the 
matters based on this information in the form and context in 
which it appears.

FORTESCUE  FY23 ANNUAL REPORT    |    56

Ore Reserves and Mineral ResourcesOUR APPROACH  
TO SUSTAINABILITY

04

2023

Sustainability is 
critical to the  
future success of  
our company

FORTESCUE  FY23 ANNUAL REPORT    |    57

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Sustainability is critical to the 
future success of our Company 
and we integrate it into all aspects 
of our business

As Fortescue transitions to the number 1 integrated green 
technology, energy and metals company, our commitment 
to sustainability expands with us. 

We are focused on achieving leading practice and ensuring 
that communities continue to benefit from our growth 
and development as we take a global leadership role in 
addressing climate change and supporting the transition to 
green energy on a global scale. 

Our sustainability commitments are developed in 
collaboration with our stakeholders and aim to create 
value for our investors, ensure the health and safety of our 
employees, protect the environment and empower the 
communities in which we operate. 

Sustainability is integrated into our decision-making and 
strategic and risk management processes. Compliance 
with all relevant legislation and obligations, including those 
that govern health, safety and environment, is the absolute 
minimum standard to which we operate. 

Our unique culture and Values form the base of our 
sustainability framework, which incorporates specific 
polices, objectives and targets.

Targets

Opportunities 
and objectives

Policies 

Voluntary  
commitments  
and principles

Code of Conduct 
and Integrity

Our Purpose  
and Values

Sustainability governance
Good governance is critical to strong sustainability 
performance, and our Board is responsible for the 
oversight of all sustainability matters, receiving regular 
updates through the Audit, Risk Management and 
Sustainability Committee (ARMSC). Key outcomes for 
ARMSC in FY23 include:

•  endorsement of the revised Environment Policy

•  endorsement of the FPIC Position Statement

•  endorsement of the revised Human Rights Policy.

Operationally, sustainability is managed by our Chief 
Executive Officers with support from our executive 
Sustainability Committee that meets at least quarterly 
to oversee all sustainability matters. In FY23, this 
Committee approved site specific water targets for 
two operating mine hubs at Eliwana and Solomon. Our 
Sustainability team coordinates the implementation of 
our sustainability strategy, related policies and targets 
across the business. 

The Sustainability Committee works to ensure 
continuous improvement and that the sustainability 
strategy, related policies and targets are embedded 
throughout our business. Our sustainability strategy 
outlines commitments and targets and provides 
implementation guidance. The early identification and 
assessment of sustainability matters alerts Fortescue 
to potential risks and opportunities and enables the 
planning of mitigation and optimisation strategies.  
These assessments may result in amendments to a 
project or avoidance if the risk of proceeding is found to 
be too high.

FORTESCUE  FY23 ANNUAL REPORT    |    58

Our approach to sustainabilityMateriality
Material topics are those that may have a significant impact 
on our ability to achieve our commitments and targets. 
These topics are identified through an annual assessment 
process that considers risks and opportunities, external 
stakeholder views, our internal subject matter expertise and 
third-party due diligence. The assessment involves a cycle of 
research, identification, prioritisation, validation and review.

In FY24, we will commence a double materiality assessment 
in accordance with the requirements of the GRI standards. 
The double materiality process requires a company to judge 
materiality from two perspectives: 

1) “the extent necessary for an understanding of the 

company’s development, performance and position” and 
“in the broad sense of affecting the value of the company”

During FY23, our materiality assessment considered the 
following: 

2) environmental and social impact of the company’s 

activities on a broad range of stakeholders.

It is expected that this process will continue to evolve our 
material topics, ensuring that our focus remains on the 
topics which are most relevant to our business, society and 
the environment.

•  sustainability initiatives and targets 

•  corporate risk assessments and audits 

•  policies, standards and guidelines 

•  results of internal and external stakeholder engagement 

•  media and investor interest and feedback 

•  material topics identified by peers, sustainability leaders 

and materiality analysis 

•  benchmarking and environmental, social and  

governance assessments. 

Priorities were informed by internal and external 
stakeholder engagement. Materiality was 
validated by subject leaders and the 
Sustainability Committee, with 12 topics 
determined to be material within three 
sustainable development pillars: People, 
Planet and Process. We have aligned 
our approach to sustainability with 
the United Nations Sustainable 
Development Goals (SDGs) and 
will continue to work with our host 
governments as they strive to meet 
these goals.

Risk-based approach to sustainability
Sustainability risks are considered within our material risk 
exposures, as reported in the FY23 Corporate Governance 
Statement, as well as within functional risk assessment 
processes by business area, project and facility.

The Fortescue Risk Management Framework consists 
of a Risk Management Policy and a Risk Management 
Standard. In FY23, we revised our risk matrix, where we 
define likelihood and consequence criteria to ensure risks 
are considered consistently across the Company. The risk 
matrix includes criteria aligned with a number of our material 
topics, including:

•  economic contribution (addressed under financial impact 

criteria)

•  employee safety and wellbeing (addressed under health 

and safety) 

•  climate action, protecting biodiversity and protecting 

water resources (addressed under environment criteria)

•  respecting human rights, respecting heritage and culture 
and building thriving communities (addressed under 
social/community/heritage criteria)

•  business integrity (addressed under reputation and brand, 

as well as legal and compliance criteria).

Ensuring sustainability risks are adequately considered 
in our functional risk assessments is an area of focus for 
Fortescue.

FORTESCUE  FY23 ANNUAL REPORT    |    59

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MEASURING OUR PERFORMANCE

PEOPLE

Employee safety and wellbeing

OBJECTIVE: To be global 
leaders in safety

OBJECTIVE: To be global 
leaders in safety

OBJECTIVE: To be global 
leaders in safety

OBJECTIVE: To be global 
leaders in safety

TARGET: Achieve zero fatalities

TARGET: Reduce our injury risk 
profile by 15 per cent

TARGET: Maintain TRIFR  
below the global resources 
industry lowest quartile

TARGET: TRIFR not  
exceeding 4.0

Fatalities

FY23      0
FY22     1
   0
FY21  

Injury risk profile reduction 
(Fortescue Metals)

TRIFR  
(Fortescue Metals)

FY23    22%  
FY22    21%  

FY23    1.8
FY22     1.8
  2.0
FY21  

TRIFR (FFI)

FY23    0.0
FY22   0.7

Female employment and development

OBJECTIVE: Increase the number of 
female employees to be reflective of 
general society

OBJECTIVE: Increase gender diversity 
in FFI

OBJECTIVE: Provide opportunities 
for female employees to move into 
leadership positions

TARGET: Year on year increase in female 
employment

TARGET: Increase female employment in FFI 
>38 per cent

TARGET: Year on year increase in 
female employment in leadership roles

Female employment

Female employment in FFI

FY23    23%  
FY22    23%
FY21    21%

FY23    34%  
FY22 

 34%

Females in leadership roles  
(Manager and above)

FY23    26%  
FY22     24%  
  25%  
FY21  

First Nations Australians employment and development

OBJECTIVE: Increase the number of 
First Nations Australian employees to 
be reflective of general society

OBJECTIVE: Increase the number of 
First Nations Australian employees to be 
reflective of general society

OBJECTIVE: Provide opportunities 
for First Nations Australian people to 
move into leadership positions

TARGET: Year on year increase in our  
First Nations Australian employment rate

TARGET: Year on year increase in the  
First Nations Australian employment rate in 
Pilbara operations

TARGET: Year on year increase in the 
First Nations Australian employment 
rate in leadership roles

First Nations Australian 
employment in Australian 
workforce

FY23    10%  
FY22    10%
FY21    10%

First Nations Australian 
employment in Pilbara operations 

First Nations Australian 
leadership roles

FY23    16%  
FY22    15%
 14%
FY21  

FY23    4%  
FY22     4%  
  4%  
FY21  

Respecting heritage and culture

Building thriving communities

OBJECTIVE: Work together with Indigenous people to 
manage First Nations heritage responsibly and sustainably

OBJECTIVE: Create economic opportunities for First 
Nations businesses through local procurement, business 
development, mentoring and capacity-building opportunities

TARGET: Annually, ensure no impact to First Nations heritage 
without consultation with and consent from First Nations people 

Target: Annually, achieve a spend of 10 per cent with First Nations 
businesses

Significant heritage incidents 

Spend with Aboriginal businesses  

FY23 
FY22
FY21

 0
 0
 1  

FY23
FY22
FY21

 5%
 5%  
 5%  

  
 
 
  
 
  
PLANET

Protecting biodiversity

OBJECTIVE: To take responsibility for 
Fortescue’s disturbance by protecting 
biodiversity in the regions where we operate

TARGET: Achieve a net positive impact on 
biodiversity

Building circularity

OBJECTIVE: To take responsibility for 
Fortescue’s disturbance by protecting 
biodiversity in the regions where we 
operate

TARGET: Achieve zero significant 
environmental incidents

OBJECTIVE: To reduce waste generation 
through prevention, reduction, recycling and 
reuse

TARGET: Recycle more than 80 per cent of our 
non-mineralised waste volumes at our operating 
sites, excluding tyres and concrete waste

FY23 progress:  

Significant environmental incidents   

Waste recycled  

•  0 significant environmental incidents

•  Ongoing implementation of our environmental 

management system

•  A$4.7m invested in research and conservation 

FY23
FY22
FY21

   0
   0
   0

programs

•  Progressing TNFD pilots for a number of our 

projects and operations

Protecting water resources

OBJECTIVE: Use water 
responsibly by improving 
water use efficiency and 
minimising water loss 
through surface water 
discharge and evaporation

TARGET: Set public, site-
specific water management 
targets for each of our 
operating mines by FY23

OBJECTIVE: Use water 
responsibly by improving 
water use efficiency and 
minimising water loss 
through surface water 
discharge and evaporation

TARGET: Annually, ensure 
at least 80 per cent of water 
abstracted at the Cloudbreak 
and Christmas Creek mine 
sites is used for operational 
requirements or beneficial 
environmental purposes 

Operating mine sites 
with site-specific targets

•   FY23: Eliwana and Solomon mine 

sites targets set

•   FY19: Chichester Hub (Christmas 
Creek and Cloudbreak mines) 
targets set

Progress

FY23    96%
FY22    99%
 98%
FY21  

FY23
FY22
FY21 

 81%
 83%  
 87%  

OBJECTIVE: Use water 
responsibly by improving 
water use efficiency and 
minimising water loss 
through surface water 
discharge and evaporation

TARGET: Pilot the Minerals 
Council of Australia Water 
Accounting Framework at 
Eliwana, in line with the ICMM 
Water Stewardship Framework, 
in FY24, to provide a catchment-
wide view of water flows, uses 
and quality.  

OBJECTIVE: Use water 
responsibly by improving water 
use efficiency and minimising 
water loss through surface water 
discharge and evaporation

TARGET: Complete a site-wide water 
resource efficiency assessment for 
Solomon in FY24 to inform long term 
water efficiency planning.

Progress

Progress

•   FY23: New target set in FY23. 

Progress to be reported in FY24.

•   FY23: New target set in FY23. Progress to 

be reported in FY24.

Closure and rehabilitation

OBJECTIVE: Ensure the closure of 
our mines and key infrastructure 
areas is undertaken in a planned 
approach, with appropriate financial 
provisioning in place 

TARGET: Closure plans to be in place 
for each major operational site 

Closure plans in place  

FY23
FY22
FY21

100%
100%
100%

PROCESS

Business integrity

Economic contribution

OBJECTIVE: To ensure our Values reflect ethical 
conduct and respect and are embedded in the 
business

Objective: Deliver value to our 
communities through strategic 
social investment

TARGET: Annually, ensure ethical conduct is 
maintained by a targeted program, including 
leadership development, training, performance 
assessments and remuneration  

Employees attending advanced  
anti-bribery and corruption training

FY23 
FY22 
FY21 

766
863
264

Target: Allocate funding 
according to priorities set in the 
community investment strategy  

Social investment  

FY23
FY22
FY21

A$101.8 million
A$77.4 million
A$63.2 million

Progress against our targets for climate action is reported in the FY23 Climate Change Report which is available on our website at www.fortescue.com

Our FY23 Modern Slavery Statement will be published in December 2023. Progress against our targets for respecting human rights is reported in the  
FORTESCUE  FY23 ANNUAL REPORT    |    61
FY22 Modern Slavery Statement which is available on our website at www.fortescue.com

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CORPORATE  
GOVERNANCE
2023

05

Fortescue is aiming 
to achieve Real Zero 
emissions (Scope 1 and 
2) across our Australian 
terrestrial iron ore 
operations by 2030

FORTESCUE  FY23 ANNUAL REPORT    |    62

Corporate governanceOVERVIEW OF 
GOVERNANCE

Good corporate governance is critical to the long-term,  
sustainable success of Fortescue

Good governance is the collective responsibility of the 
Board of Directors (the Board) and across all levels of 
management. Fortescue seeks to adopt leading practice and 
contemporary governance standards and apply these in a 
manner consistent with our culture and Values. 

Fortescue supports the intent of the 4th Edition of 
the Australian Securities Exchange (ASX) Corporate 
Governance Council’s Corporate Governance Principles 
and Recommendations (Principles and Recommendations). 
Unless otherwise disclosed, Fortescue has reported against 
the requirements of the Principles and Recommendations.

The cornerstones of our corporate governance are:

Transparency
Being clear and unambiguous about our structure, 
operations and performance, both externally and internally, 
and maintaining a genuine dialogue with, and providing 
insight to, stakeholders and the market generally.

Integrity
Developing and maintaining a corporate culture committed 
to ethical behaviour and compliance with the law.

Empowerment
Everyone at Fortescue is empowered to make decisions 
that support our objectives and are in the best interests of 
stakeholders. Management and employees are encouraged 
to be innovative and strategic in making decisions that 
align with our risk appetite and are undertaken in a manner 
consistent with corporate expectations and standards.

Corporate accountability
Ensuring that there is clarity of decision-making, with 
processes in place to authorise the right people to 
make effective and efficient decisions with appropriate 
consequences when these processes are not followed.

Stewardship
Developing and maintaining a company wide recognition 
that Fortescue is managed for the benefit of its shareholders, 
taking into account the interests of other stakeholders.

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FORTESCUE  FY23 ANNUAL REPORT    |    63

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GOVERNANCE FRAMEWORK

STAKEHOLDERS

GOVERNMENT
AND 
REGULATORS

BUSINESS
PARTNERS AND
INVESTORS

SHAREHOLDERS
SHAREHOLDERS

EMPLOYEES

COMMUNITY

BOARD

Audit, Risk Management 
and Sustainability Committee

Remuneration and 
People Committee

Finance 
Committee 

Nomination 
Committee

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MANAGEMENT RESPONSIBILITY

DELEGATIONS OF AUTHORITY

CHIEF EXECUTIVE OFFICERS

EXECUTIVE AND MANAGEMENT

INTEGRATED RISK MANAGEMENT

CORPORATE CULTURE AND VALUES

FORTESCUE  FY23 ANNUAL REPORT    |    64

Corporate governance 
 
 
 
OUR APPROACH TO 
CLIMATE CHANGE
2023

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Green energy 
Holmaneset

FORTESCUE  FY23 ANNUAL REPORT    |    65

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OUR EMISSIONS

This year, we are putting our Company's emissions at the outset of this report, 
in an effort to be completely transparent about the greenhouse gases we emit.
The remainder of this report will outline how we plan to reduce our emissions

Fortescue emits more than 2.5 million tonnes of carbon 
dioxide equivalent (CO2-eq) into the atmosphere every year. 
Customers of our iron ore – primarily steel mills located in 
Asia – emit a further 261.5 million tonnes of CO2-eq annually. 

This report outlines our Board approved US$6.2 billion plan 
to achieve Real Zero profitably, which means the elimination 
of Scope 1 and 2 emissions by 2030 by eliminating the use of 
fossil fuels from our Australian terrestrial iron ore operations. 
We are dedicated to doing this without using voluntary 
carbon offsets from FY24 onwards for Scope 1 and 2 
emissions. At the time of this report, Fortescue has identified 
the solutions it plans to adopt to eliminate approximately 
90% of terrestrial Scope 1 and 2 emissions from its 
Australian iron ore operations. We are actively working to 
identify solutions for the final approximately 10%. 

We also have separate targets to eliminate emissions from 
our marine vessels by 2030 and achieve Net Zero Scope 3 
emissions by 2040. We are presently developing our plans to 
meet these targets.

Scope 1 emissions are direct emissions from sources owned 
or controlled by an entity. Scope 2 refers to emissions 
associated with the production of electricity, heat, or steam 
purchased by an entity. Scope 3 refers to all other indirect 
emissions associated with activities or facilities not owned or 
controlled by the entity. 1,2

In general, when we refer to emissions, we refer to all 
greenhouse emissions, reported in the unit of tonnes of  
CO2-eq. This is defined as the amount of CO2 that would 
cause the same temperature rise, over a given time period, 
as an emitted amount of greenhouse gas or mixture of 
greenhouse gases.³

Stepping beyond fossil fuels and voluntary carbon offsets 
helps reduce our exposure to regulatory, reputational and 
supply chain risk, while potentially generating significant 
operating cost savings.

In FY23, gas and diesel cost Fortescue over US$560 million, 
while voluntary offsets cost US$6.2 million.

Eliminating our emissions could also bring greater value to 
our shareholders, enabling us to enter the growing market 
for zero-emissions power systems, commercialise our green 
technologies and enable access to sustainable finances.

Scope 1 and 2 emissions 

In FY23, total gross Scope 1 and 2 emissions from our 
Australian iron ore operations and Fortescue marine vessels, 
which consist of eight ore carriers and nine tugboats that 
operate under Fortescue’s operational control in Port 
Hedland, were 2.55 million tonnes CO2-eq. 

Our Scope 1 emissions consisted of 2.2 million tonnes of 
CO2-eq in FY23, while our Scope 2 emissions from power 
purchases were lower, at 0.35 million tonnes of CO2-eq.   

Of our FY23 Scope 1 mining operations emissions:

•  35% came from other Heavy Mobile Equipment (HME;  

diesel)

•  25% originated from our mining haul trucks (diesel)

• 

• 

13% came from stationary power (gas, diesel)

12% originated from marine vessels under our exclusive  
control (heavy marine fuel oil)

• 

11% came from our rail operations (diesel)

•  4% came from other sources

1 https://www.ipcc.ch/site/assets/ green driven capital markets.uploads/2018/02/ipcc_wg3_ar5_annex-i.pdf

2 Under the Greenhouse Gas Protocol Accounting standards, we use the 'Operational Control' boundary method. 

3 https://www.ipcc.ch/sr15/chapter/glossary/#:~:text=CO2%20equivalent%20(CO2,or%20a%20mixture%20of%20GHGs.

FORTESCUE  FY23 ANNUAL REPORT    |    66

Our approach to climate change 
 
FY23 Scope 1 iron ore emissions

Shipping
12%

Other
4%

Stationary 
power - gas
10%

Stationary 
power - diesel
3%

Scope 1

Haul trucks 
25%

Other Heavy 
Mining 
Equipment
35%

Rail - 
locomotives
11%

In working towards eliminating our emissions, we are 
developing and evaluating the following solutions:

•  Stationary power: wind and solar, grid scale batteries, 

demand response and reserve power provided by a green 
fuel such as green ammonia

•  Ore carriers: green ammonia or green methanol 

•  Tugs: battery-hybrid vessels using green ammonia and/or 

green hydrogen 

•  Rail: battery electric, including our Infinity Train solution 

and/or green ammonia

•  Haul trucks and other Heavy Mobile Equipment: powered 
by batteries, trailing cables from the power grid or green 
hydrogen fuel cells.

As part of our plan to achieve Real Zero terrestrial emissions 
across our Australian iron ore operations by 2030, we 
forecast that our Scope 1 and 2 emissions in the Pilbara will 
initially rise out to FY26 before they begin to fall. This initial 
rise will occur due to production at Iron Bridge scaling up to 
hit nameplate capacity. 

Fortescue’s projected emissions pathway to Real Zero for Australian iron ore operations  
(Scope 1 and 2 terrestrial emissions)

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3.0mt

2.5mt

2.0mt

1.5mt

1.0mt

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-

~95% of emissions 
increase due to  
Iron Bridge

FY20

FY21

FY22

FY23

FY24

FY25

FY26

FY27

FY28

FY29

FY30

Actuals

Decarbonisation trajectory*

*Our emissions are forecast to fall within the shaded range based on our current decarbonisation plan and modelling. It is subject to 
various factors beyond our control, including those set out in this report and our FY23 Annual Report.

Emissions are forecast to fall from FY26 onwards as renewable power capacity substantially increases and we begin to 
deploy a zero-emission mobile fleet across our Pilbara operations.

At the time of this report, Fortescue has identified the solutions it plans to adopt to eliminate approximately 90% of 
terrestrial Scope 1 and 2 emissions from its Australian iron ore operations. We are actively working to identify solutions for 
the final approximately 10%.

Fortescue’s use of renewable energy in the Pilbara continues to rise:

•  Since FY19, renewable energy use has risen from less than 1 gigawatt hour (GWh) to 145.7 GWh in FY23

•  Since FY22, renewable energy consumption has risen 58 GWh 

•  Today, renewable energy comprises 20% of the electricity we purchase for our Pilbara iron ore operations

In FY23 we also surrendered 336,833 tonnes in CO2-eq of offsets to meet our previous commitment to a 3% year-on-
year net reduction in our emissions. As stated earlier, in FY24 we will no longer purchase voluntary carbon offsets for 
Scope 1 and 2 emissions, instead focusing our efforts on actual emission elimination. We will replace our 3% target by 
committing interim financial spend to deliver our decarbonisation pathway to Real Zero.

FORTESCUE  FY23 ANNUAL REPORT    |    67

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Total Scope 3 emissions

Scope 3 emissions  
excluding crude steel manufacturing

6

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Employee commuting

Fuel and energy refining and transport

Purchased goods and services

Capital goods

Chartered cargo ship

Crude steel manufacturing

Business travel

Employee commuting

Fuel and energy refining and transport

Capital goods

Purchased goods and services

Chartered cargo ship

The next largest sources of Scope 3 emissions in FY23 were 
chartered cargo shipping (2.78 million tonnes CO2-eq) and 
purchased goods and services (2.5 million tonnes CO2-eq).

Key drivers for the change in Scope 3 emissions between 
FY23 and FY22 were:

•  Changes in estimation methodologies for purchased 
goods and services, capital goods, and shipping (see 
Section 13 for detail)

•  Greater production of iron ore

•  Changes in our product mix and destination markets

Scope 3 
Our Scope 3 emissions in FY23 (267.61 million tonnes of 
CO2-eq) were 5% higher than in FY22. This increase in Scope 
3 emissions was caused primarily by a rise in the amount of 
iron ore shipped, from 189 million tonnes in FY22 to  
192 million tonnes in FY23. 

Scope 3 emissions are those that fall within our value chain 
but are outside our operational control, including those 
generated during the shipping of our products in non-
Fortescue vessels and iron and steel production.⁴

By far the largest source of Fortescue’s Scope 3 emissions 
is the steelmaking process, which accounts for 98% of 
our Scope 3 emissions or 261.5 million tonnes CO2-eq. 
Steelmaking generates significant emissions due to its 
current reliance on coking and thermal coal, however 
new approaches that use renewable electricity and green 
hydrogen to produce green steel are under development by 
Fortescue and other businesses. 

4   Our Scope 3 estimates are informed by the international GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard. In 
accordance with this guidance, estimates for quantified Scope 3 emissions that were determined to be material are provided in the data tables. 

FORTESCUE  FY23 ANNUAL REPORT    |    68

Our approach to climate change 
 
GHG emissions data from FY20 – FY23

GHG EMISSIONS DATA

FY23

FY22 

FY21 

FY20 

Scope 1 and Scope 2 emissions (million tonnes CO₂-e)

Total Gross Scope 1 and 2 emissions

Total Gross Scope 1 emissions

     Gross Scope 1 shipping emissions

     Gross Scope 1 emissions (excl shipping)

Gross Scope 2 emissions

Total Net Scope 1 and 2 emissions

Emission reduction through offsets

Emissions intensity in electricity generation   
(CO₂/mt ore processed) 

Energy consumed

Diesel consumption (million litres)

Natural gas consumption (PJ)

Other (PJ)

Non-renewable electricity purchased (GWh)

Renewable electricity purchased (GWh)

Total net energy consumed (PJ)

Scope 3 emissions (million tonnes CO₂-e)

2.55

2.2

0.26

1.94

0.35

2.21

0.34

3.31

633

4.1

0.4

567

145.7

31.5

2.55

2.21

0.31

1.91

0.33

2.28

0.26 

3.32 

2.56

2.40

0.32

2.08

0.16

2.36

0.20 

2.43

2.27

0.34

1.93

0.16

2.43

– 

3.50 

3.49 

634 

700 

3.4 

0.6 

494 

87.7 

30.6 

3.6 

0.5 

260 

0.7 

32.0 

Crude steel manufacturing 

261.46

250.37 

242.83 

Chartered cargo shipping 

2.86**

3.16* 

2.96*

Purchased good and services 

Capital goods 

Fuel and energy refining and transport 

Employee commuting 

Business travel 

Upstream leased assets

2.50

0.12

0.50

0.03

0.03

0.11

2.07 

0.27 

0.12 

0.10 

0.03 

–

1.84 

0.52 

0.12 

0.06 

0.02 

–

641 

3.6 

0.4 

260 

0.4 

29.7 

–

–

–

–

–

–

–

–

Total gross Scope 3 emissions 

267.61

256.14* 

248.34* 

A dash (-) indicates where data has not been reported in previous years.

* Restated numbers, reasoning detailed in section Shipping Emissions Methodology Changes

** FY23 value of 2.86mt includes less than 0.08mt of non-chartered cargo vessel upstream transportation and distribution emissions in addition to the 

chartered cargo shipping emissions of 2.78mt

FORTESCUE  FY23 ANNUAL REPORT    |    69

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DIRECTORS' 
REPORT
2023

07

TRUCK INFO

First ore loaded 
to train at Belinga 
Iron Ore Project  
in Gabon

FORTESCUE  FY23 ANNUAL REPORT    |    70

Directors' reportDIRECTORS’  
REPORT

AT 30 JUNE 2023

Directors

The Directors of Fortescue in office during the year and until the date of this report, their 
qualifications, experience and directorships held in listed companies at any time during the 
last three years, are set out on pages 13 to 18. 

The Directors’ meetings, including meetings of the Company’s Board of Directors and of each 
Board committee held during the year ended 30 June 2023 and the number of meetings 
attended by each Director are shown in section 2.3 of the Corporate Governance Statement¹. 

The relevant interests of each Director in the shares and share rights issued by Fortescue as 
notified by the Directors to the Australian Securities Exchange in accordance with section 
205G(1) of the Corporations Act 2001, at the date of this report are as follows:

Director

Dr A Forrest AO

M Barnaba AM

E Gaines

Dr J Baderschneider

Lord S Coe CH, KBE

P Bingham-Hall

J Morris OAM (resigned 30 June 2023)

Dr Y Zhang (resigned 22 November 2022)

L Yifei (appointed 22 August 2022)

Ordinary shares

Share rights

1,131,365,000

40,300

341,294

138,000

5,000

59,861

–

–

–

–

–

204,627

–

–

–

–

–

–

¹FY23 Corporate Governance Statement is available on Fortescue’s website at www.fortescue.com

The remuneration of Directors and Key Management Personnel are detailed in the 
Remuneration Report on pages 74 to 108. 

FORTESCUE  FY23 ANNUAL REPORT    |    71

Directors’ Report  
For the year ended 30 June 2023

Operating and financial review 
Fortescue’s principal activities during the year were 
exploration, development, production, processing and 
sale of iron ore, and the transition to become the number 1 
integrated green technology, energy and metals company.

The overview of Fortescue’s operations, including a discussion 
of strategic priorities and outlook, key aspects of operating 
and financial performance and key business risks are 
contained in the following sections of the Annual Report: 
Overview on pages 5 to 27, Operating and Financial Review  
on pages 28 to 46 and Corporate Governance Statement¹ 
section 4 Risk Management. 

Dividends

Profit

Net profit after tax

Underlying net profit after tax

Declared and paid during the year:

Final ordinary dividend for the year ended 30 June 2022 – paid in September 2022

Interim ordinary dividend for the year ended 30 June 2023 – paid in March 2023

Total – declared and paid during the year

Declared since the end of the financial year:

Final ordinary dividend for the year ended 30 June 2023 – to be paid in September 2023

2023

US$m

4,796

5,522

A$ cents

121

75

196

100

Shares under option
As at the date of this report, there were no unissued ordinary 
shares under options, nor were there any ordinary shares 
issued during the year ended 30 June 2023 as a result of the 
exercise of options.

Company Secretary 
Cameron Wilson and Gemma Tually are Company 
Secretaries of Fortescue. Details of their qualifications and 
experience are set out on page 18 of this report.

Environmental regulation and 
compliance 
Fortescue is committed to minimising the environmental 
impacts of its operations, with an appropriate focus placed 
on continuous monitoring of environmental matters and 
compliance with environmental regulations.

The details of Fortescue’s environmental performance 
including compliance with the relevant environmental 
legislation are presented in Fortescue’s FY23 Sustainability 
Report². 

Greenhouse gas emissions and energy 
Fortescue complies with the Australian Government’s 
National Greenhouse and Energy Reporting Act 2007 (Cth) 
and recognises its responsibility to actively improve  
energy use and minimise greenhouse gas emissions to 
reduce its contribution to climate change and impact  
on the environment. 

The details of greenhouse gas emissions and energy 
strategy, compliance and reporting are presented in 
Fortescue’s FY23 Sustainability Report². 

¹ FY23 Corporate Governance Statement is available on Fortescue’s website at www.fortescue.com 

² FY23 Sustainability Report is available on Fortescue’s website at www.fortescue.com

FORTESCUE  FY23 ANNUAL REPORT    |    72

Directors' reportDirectors’ Report  
For the year ended 30 June 2023

Directors’ and Officers’ indemnities  
and insurance 
Fortescue has paid premiums to insure the Directors and 
Officers of Fortescue. 

The liabilities insured are legal costs that may be incurred in 
defending civil proceedings that may be brought against the 
Officers in their capacity as Officers of Fortescue, and any 
other payments arising from liabilities incurred by the Officers 
in connection with such proceedings, other than where such 
liabilities arise out of conduct involving a wilful breach of duty 
by the Officers or the improper use by the Officers of their 
position or of information to gain advantage for themselves or 
someone else or to cause detriment to Fortescue. 

It is not possible to apportion the premium between amounts 
relating to the insurance against legal costs and those relating 
to other liabilities. Conditions of the policy also preclude 
disclosure to third parties of the amount paid for the policy. 

Non-audit services 
Fortescue may decide to employ the auditor on assignments 
additional to their statutory audit duties where the auditor has 
relevant expertise and experience and where the auditor’s 
independence is not compromised. 

Details of the amounts paid or payable to the auditor 
PricewaterhouseCoopers Australia and related entities for 
audit and non-audit services provided during the year are set 
out in note 19 to the financial statements. 

The Board of Directors has considered the position and, 
in accordance with advice received from the Audit, Risk 
Management and Sustainability Committee, is satisfied that 
the provision of the non-audit services is compatible with the 
general standard of independence for auditors imposed by the 
Corporations Act 2001 and did not compromise the auditor 
independence requirements of the Corporations Act 2001 for 
the following reasons: 

•   all non-audit services have been reviewed by the Audit, Risk 
Management and Sustainability Committee to ensure they 
do not impact the impartiality and objectivity of the auditor. 

•   none of the services undermine the general principles 

relating to auditor independence as set out in APES 110 
Code of Ethics for Professional Accountants. 

Future developments 
The Overview section set out on pages 5 to 27 and the 
Operating and Financial Review section set out on pages 28 to 
46 of this Annual Report, provide an indication of the Group’s 
likely developments and expected results. In the opinion of the 
Directors, disclosure of any further information about these 
matters and the impact on Fortescue’s operations could result 
in unreasonable prejudice to the Group and has not been 
included in this report. 

Significant changes in state of affairs 
There have been no significant changes in the state of affairs 
of Fortescue, other than those disclosed in this report.

Proceedings on behalf of the Group 
No person has applied to the Court under section 237 of the 
Corporations Act 2001 for leave to bring proceedings on behalf 
of Fortescue, or to intervene in any proceedings to which 
Fortescue is a party, for the purposes of taking responsibility 
on behalf of Fortescue for all or part of those proceedings. 

No proceedings have been brought or intervened in on behalf 
of the Company with leave of the Court under section 237 of 
the Corporations Act 2001. 

Rounding of amounts 
The Company is of a kind referred to in ASIC Corporations 
Instrument 2016/191, issued by the Australian Securities and 
Investments Commission, relating to the ‘rounding off’ of 
amounts in the financial report. Amounts in the financial report 
have been rounded off in accordance with that instrument to 
the nearest million dollars, unless otherwise stated.

Events occurring after the reporting period 
On 28 August 2023, the Directors declared a final dividend of 
100 Australian cents per ordinary share payable in September 
2023. 

This report has been made in accordance with a resolution of 
the Directors. 

The auditor’s independence declaration, as required under 
section 307C of the Corporations Act 2001, is set out on page 
166 and forms part of this report. 

Dr Andrew Forrest AO 

Executive Chairman 

Dated in Perth this 28th day of August 2023. 

FORTESCUE  FY23 ANNUAL REPORT    |    73

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Directors’ Report  
For the year ended 30 June 2023

REMUNERATION REPORT

CONTENTS

From the Remuneration and People Committee Chair 

1. 

Introduction and FY23 Key Management Personnel 

2.  Remuneration snapshot 

3.  Business performance 

4.  Remuneration outcomes  

5.  Incentive plan operation 

6.  Executive contract terms 

7.  Non-Executive Director remuneration 

8.  Remuneration governance 

9.  Statutory disclosures   

75

78

79

82

85

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100

101

102

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FORTESCUE  FY23 ANNUAL REPORT    |    74

Directors' report 
FROM THE REMUNERATION AND 
PEOPLE COMMITTEE CHAIR

Dear Shareholders,

It is a privilege to have been appointed Chair of the People & 
Remuneration Committee, and on behalf of the Directors of 
Fortescue, I am pleased to present the Remuneration Report 
(the Report) for Fortescue for the year ended 30 June 2023 
(FY23). I would also like to take this opportunity to thank 
Jenn Morris for her dedication over the last six and a half 
years as a Non-Executive Director and the past four years as 
Chair of the Committee.

FY23 Fortescue performance
FY23 was another year of record operational performance 
for Fortescue coupled with several firsts for the business, 
all while achieving an industry-leading safety performance. 
These achievements are further reflected in the exceptional 
results achieved across our key operations and in our 
financial and strategic measures. 

This year saw the first high-grade magnetite production at 
Iron Bridge delivering first-run grade of over 68% Fe. This 
achievement was the culmination of years of dedication 
from over 20,000 people to deliver the highly complex and 
innovative project. Our ongoing commitment to the long-
term sustainability of our iron ore business was further 
strengthened through progress in Gabon at the Belinga Iron 
Ore Project. During FY23 we saw the signing of the Mining 
Convention, successful early-stage exploration and first ore 
delivered to port. These remarkable achievements place 
Fortescue on track to deliver first shipment of iron ore from 
Gabon by the end of calendar year 2023. 

There were also significant advancements against our 
commitment to reach real zero Scope 1 and 2 terrestrial 
emissions across our Australian iron ore operations by 2030. 
This includes delivery of the first prototype battery system 
designed for zero-emissions battery electric haul trucks 
and live testing of zero-emissions vehicles at our Christmas 
Creek site. Fortescue remains well positioned to profitably 
decarbonise our operations and transition to the number 1 
integrated green technology, energy and metals company. 

These results were delivered despite significant market 
pressures, including higher than forecast inflation and 
ongoing skills shortages. 

Fortescue’s delivery of another year of consistent, reliable 
and sustainable performance would not have been possible 
without the hard work and commitment of the entire 
Fortescue team. The Board remain incredibly grateful to the 
entire workforce and thank them for once again delivering 
these outstanding results. The wellbeing and safety of our 
people remains a key focus area, with a diverse and inclusive 
workplace aligned to our Values at the core of our success. In 
FY23, we continued to progress a number of actions through 
our ongoing Workplace Integrity Review including a range of 
initiatives to enhance physical and personal safety. To ensure 
Fortescue continues to deliver on its strategic commitments, 
the business underwent organisational change throughout 
the year. The impact to employees was reflected in the 
results of the People Experience Survey, with the Net 
Promoter Score dropping 10 points compared to the FY22 
result. The Executive team are working through the feedback 
received and are committed to acting on it. However, it is 
pleasing to report that overall employee turnover of 9% 
continues to be well below industry benchmarks.

Please refer to Section 3 of the Report for further business 
performance highlights.

Senior Leadership changes
During FY23 we announced changes to our senior 
leadership, with Elizabeth Gaines transitioning from CEO 
to a Non-Executive Director and commencing a new role 
as Global Ambassador for the Fortescue Group. Elizabeth 
Gaines transitioned to Executive Director position in July 
2023. Mark Hutchinson was appointed CEO of FFI in August 
2022, subsequently becoming CEO Fortescue Energy, and 
has already delivered a number of significant milestones.

Following the departure of Ian Wells as CFO, we announced 
the appointment of Christine Morris to the role of CFO of 
Fortescue Metals. Christine commenced with Fortescue 
in July 2023. We were also pleased to announce the 
appointment of Deborah Caudle as CFO of Fortescue Energy, 
commencing in September 2023.

These appointments complement the existing leadership 
team and ensure Fortescue has the talent in place to deliver 
on the critical next phase of our business.

In February 2023, Fiona Hick was appointed CEO of 
Fortescue Metals. In August 2023 Fiona departed as CEO. 
Dino Otranto was appointed.

FORTESCUE  FY23 ANNUAL REPORT    |    75

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FY23 remuneration outcomes
Our remuneration framework is designed to be competitive 
in attracting and retaining the best talent, while also aligning 
with shareholder expectations by setting challenging stretch 
targets when rewarding for performance.

As our business continues to evolve, and in listening to 
feedback from our shareholders, we made two changes to 
our incentive framework for FY23. 

Firstly, changes have been made to the FFI Long Term 
Incentive Plan (LTIP) structure to ensure it remains 
strategically aligned to the whole business. For the FY23 
LTIP performance period, the independent valuation metric 
has been removed with the weighting redistributed between 
Total Shareholder Return and Emissions Elimination & 
Strategic Measures. 

Secondly, the cliff-vesting approach to determining 
Executive and Senior Staff Incentive Plan (ESSIP) outcomes 
for our Metals business has been replaced with a sliding 
scale methodology with vesting outcomes at threshold, 
target and stretch levels of performance, aligned to the 
approach taken for FFI in FY22. 

The Board maintains a holistic view of performance when 
assessing outcomes. Consideration is given to what the 
Board determines to be a fair outcome in the circumstances, 
taking account of what was delivered by executives, how it 
was delivered in alignment with Fortescue’s Values and the 
experience and expectations of shareholders.

A summary of performance and the link to remuneration 
outcomes is set out in the Report. 

Fixed remuneration

To remain competitive in a tight market for talent and 
aligned with benchmarks, a three per cent increase was 
applied to eligible Key Management Personnel (KMP) total 
fixed remuneration (TFR) levels effective 1 July 2022 as 
outlined in section 4. The remuneration of the new CEOs was 
set with reference to peers and aligned with the previous 
CEO remuneration.    

FY23 ESSIP

The Board set aggressive stretch targets for the FY23 ESSIP 
to drive business operations, financial performance, and 
maximise shareholder value.

FY23 ESSIP performance conditions included operational, 
people and culture, and individual KPIs. Overall, the FY23 
ESSIP outcomes for the CEO and other KMP ranged from  
85.0 per cent to 88.6 per cent of target. 

Section 4 of the Report provides further detail regarding the 
targets and their achievement.

FY21 LTIP

Vesting of the FY21 LTIP is assessed over a three year 
performance period from 1 July 2020 to 30 June 2023 
against combined Return on Equity (ROE), Total Shareholder 
Return (TSR) and strategic measures aligned with the 
Company’s long-term objectives. 

The performance conditions for the FY21 LTIP were tested 
and vested at 100 per cent based on outstanding TSR and 
ROE performance and partial progress against challenging 
strategic measures. 

Aligned with the LTIP Maximum Value Limit, a 50 per cent 
cap was applied to the grant price of $14.15, resulting in  
96.6 per cent of the awards vesting. 

Special recognition awards

In recognition of the exceptional performance and 
contributions throughout their tenures, the Board 
approved special recognition payments of A$1.976m for 
Elizabeth Gaines and A$1.0m for Ian Wells. The Board 
determined these values given their respective significant 
and transformative achievements during their time 
with Fortescue. Under Elizabeth’s leadership as CEO, 
Fortescue generated record earnings for shareholders, 
continued to drive improvement in our safety outcomes 
and increased shipments of iron ore, including during the 
Covid-19 pandemic. During her tenure, Fortescue also 
made significant progress in ESG, autonomy and advanced 
technology, positioning Fortescue as one of the most 
efficient iron ore companies in the world. As CFO and during 
his 12 years in the finance team at Fortescue, Ian ensured 
Fortescue’s balance sheet remained strong and market 
leading shareholder returns were delivered through several 
volatile market cycles and the pandemic. Elizabeth will 
continue to participate in the FY21 and FY22 LTIP on a pro-
rata basis as previously approved by shareholders. Ian has 
not retained any ongoing eligibility to participate in unvested 
long-term incentives. Neither Elizabeth nor Ian will receive 
any award under the FY23 ESSIP.

FORTESCUE  FY23 ANNUAL REPORT    |    76

Directors' reportFY24 remuneration changes
Our executive remuneration framework remains under review 
as our operating model and strategy continue to evolve. 
Looking forward to FY24, we will look to continue to drive the 
link between variable remuneration and our decarbonisation 
journey for all employees across our business.

We will also look to streamline our ESSIP scorecards and LTIP 
measures across the Metals and Energy businesses for FY24.

A market increase of four per cent for executives’ fixed 
remuneration is planned for FY24 in line with the broader 
employee annual salary review to ensure remuneration 
remains competitive against market peers.

I invite you to read our Report and trust you will find it 
outlines the links between our strategy, culture, performance 
and executive remuneration outcomes. 

On behalf of the Directors, we look forward to welcoming you 
and receiving your feedback at our 2023 AGM.

Yours sincerely,

Penny Bingham-Hall

Remuneration and People Committee Chair

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FORTESCUE  FY23 ANNUAL REPORT    |    77

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.   INTRODUCTION AND FY23  

KEY MANAGEMENT PERSONNEL

This report outlines the remuneration 
arrangements for Fortescue’s Key 
Management Personnel (KMP)

KMP are defined as ‘those persons having authority and 
responsibility for planning, directing and controlling the 
activities of the entity, directly or indirectly, including any 
director (whether executive or otherwise) of that entity’. 
Within this Remuneration Report reference to Executives 
includes Executive Directors and Other KMP.

The information provided in this Remuneration Report has 
been prepared in accordance with requirements under 
the Corporations Act 2001 and Australian Accounting 

Standards. This report forms part of the Directors’ Report 
and unless otherwise indicated the following sections 
have been audited in accordance with section 308 (3c) 
of the Corporations Act 2001. Certain non-IFRS financial 
information, including C1 cost, underlying EBITDA, 
underlying return on equity, sustaining capital expenditure 
and TSR, is presented throughout this report and where 
included has not been subject to audit.

All Executives are paid in Australian dollars. The value of 
remuneration is presented in US dollars in line with the rest 
of the Annual Report. To assist with readability, remuneration 
values are also presented in Australian dollars, with the 
conversion rate used clearly disclosed.

The KMP of the Group for FY23 were:

Name 

 Position 

Time as KMP

Non-Executive Directors

Mark Barnaba AM

Deputy Chair and Lead Independent Director

Full year

Dr Jean Baderschneider

Non-Executive Director

Penny Bingham-Hall

Non-Executive Director

Lord Sebastian Coe CH, KBE

Non-Executive Director

Jennifer Morris OAM

Non-Executive Director

Full year

Full year

Full year

Full year

Dr Ya-Qin Zhang 

Li Yifei

Elizabeth Gaines

Executive Directors

Non-Executive Director

Non-Executive Director

Non-Executive Director

Part year to 22 November 2022

Part year from 22 August 2022

Part year from 1 September 2022

Dr Andrew Forrest AO

Executive Chairman 

Full year

Elizabeth Gaines

Chief Executive Officer and Executive Director  Part year to 31 August 2022

 Other Key Management Personnel (Executives)

Fiona Hick³

Mark Hutchinson¹

Dino Otranto²

Julie Shuttleworth

Ian Wells

CEO Fortescue Metals

CEO Fortescue Energy

COO Fortescue Metals

Part year from 27 February 2023

Part year from 4 August 2022

Full year

CEO Fortescue Future Industries

Part year to 4 August 2022

Chief Financial Officer

Part year to 31 January 2023

¹ Mark Hutchinson was appointed to the role of CEO Fortescue Future Industries subsequently becoming CEO Fortescue Energy.

² In August 2023 it was announced that Dino Otranto had been appointed to the role of CEO Fortescue Metals.

³ In August 2023 Fiona Hick departed as CEO Fortescue Metals.

In June 2023 it was announced that Jennifer Morris had resigned as Non-Executive Director with her last working day being 30 June 2023. It was also 
announced that Elizabeth Gaines would transition from her Non-Executive Director position into an Executive Director position reporting directly to the 
Executive Chairman effective 1 July 2023.

In June 2023 it was announced that Christine Morris had been appointed to the role of Chief Financial Officer for Fortescue Metals. Christine commenced 
with the business in July 2023. 

In August 2023 it was announced that Deborah Caudle has been appointed to the role of Chief Financial Officer for Fortescue Energy, commencing in 
September 2023.

There have been no other changes to KMP after the reporting date.

FORTESCUE  FY23 ANNUAL REPORT    |    78

Directors' report2. REMUNERATION SNAPSHOT

Remuneration strategy principles 

OUR VALUES DRIVE OUR REWARD STRATEGY, WHICH SEEKS TO:

Build a high performance 
oriented culture that 
supports the achievement 
of our strategic vision

Attract, retain, and motivate 
employees by providing 
market competitive fixed 
remuneration and incentives

Drive the right culture  
and encourage high levels  
of share ownership
Ensure the alignment of employee 
and shareholder interests.

Market competitive 
remuneration
Attract and retain key talent with 
remuneration competitive against 
relevant comparable companies.

Performance and 
outperformance focus
Provide fair reward in line 
with individual and company 
achievements.

Fit for purpose
Include flexibility to reflect clear 
linkage to business strategy  
and the cyclical nature of the 
industry without constraint by 
market practice.

Strategic alignment
Support delivery of long-term 
business strategy and growth 
aspirations.

Shareholder and 
executive alignment
Reward sustained performance 
and deliver awards aligned with 
shareholder returns.

Safety

Family

Empowerment

Frugality

Integrity

Enthusiasm

Courage and  
determination

Generating 
ideas

Stretch targets

Humility

FORTESCUE  FY23 ANNUAL REPORT    |    79

We are 
Fortescue

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REMUNERATION FRAMEWORK COMPONENTS

Our remuneration framework is designed to support Fortescue’s Values and to 
bring to life our remuneration strategy

Fixed component

Variable / At risk

Total Fixed Remuneration 
(TFR)

ESSIP

LTIP

Purpose

Market competitive 
remuneration to attract 
and retain executives. 
Comprises base salary, 
superannuation and salary 
sacrifice benefits.

Annual variable incentive 
opportunity that provides awards 
against short-term stretch 
objectives.

Long-term incentive opportunity focused 
on growth strategy, long-term priorities and 
alignment with shareholder value creation 
over a three year performance period.

Supports the execution of 
business strategy based 
on role, qualifications, 
experience, accountability 
and responsibility.

•  A minimum of 50% is granted 
as share rights at the start of 
the financial year to create 
immediate shareholder 
alignment.

•  Performance is assessed 

against a balanced scorecard.

•  Targets set at stretch levels to 
promote outperformance.

Link to 
Values and 
remuneration 
strategy

•  Share rights are granted at the start of the 
performance period with value realised at 
time of vesting.

•  Vesting is subject to achievement of 
stretch performance targets under 
multiple measures.

•  Share rights are exposed to movement in 
share price over the three years ensuring 
strong correlation with shareholder returns.

•   A Maximum Value Limit of 50% of share 

price growth from the grant price applies 
at vesting.

FY23 
Approach: 
Fortescue 
Metals

FY23 
Approach: 
Fortescue 
Future 
Industries

Benchmarked annually 
against comparator group 
at median or above for 
outstanding performance.

Comparators: ASX 25, 
ASX 50 and resources 
companies in the ASX 100.

Performance measure breakdown

Performance measure breakdown

Operations (60%) – Safety, cost, 
production, cashflow and revenue 

People and culture (20%)

Individual KPIs (20%)

Total Shareholder Return (33%)

Return on Equity (33%)

Key strategic measures (34%)

Performance measure breakdown

Performance measure breakdown

FFI team measures (80%) – Safety, 
projects, decarbonisation, Green Industry

People and culture (10%)

Individual KPIs (10%)

Total Shareholder Return (40%)

Emissions reduction and strategic 
measures (60%)

MINIMUM SHAREHOLDING REQUIREMENT
CEO: 200% of TFR, CEO direct reports: 100% of TFR, NEDs: 100% of annual base fee

The framework visualised
The following diagram sets out the remuneration structure and the delivery timing for the CEO and other KMP.

Component

Year 1

Year 2

Year 3

TFR

ESSIP

LTIP

Base salary, superannuation  
and benefits

FY23 ESSIP¹

FY23 LTIP (three year performance period)1,2

ESSIP and LTIP 
Share rights granted 
at the start of the 
performance period

ESSIP vests 
to the extent 
targets are met

LTIP vests 
to the extent 
targets are met

1 All awards under the ESSIP and LTIP, both vested and unvested, are subject to malus/clawback (as relevant), Board discretion, and the Director and 
Executive Shareholding Policy.

2 Awards under the LTIP are subject to the Maximum Value Limit.

FORTESCUE  FY23 ANNUAL REPORT    |    80

Directors' reportRemuneration mix
The chart below shows the remuneration mix for superior performance where stretch targets have been met for Fortescue 
Metals and Fortescue Energy CEOs, and other KMP. 

CEO - Metals

28%

CEO - Energy

28%

Other KMP

36%

0%

31%

31%

27%

50%

TFR

ESSIP (at risk)

LTIP (at risk)

FY23 Remuneration Outcomes

41%

41%

37%

Total at risk

72%

72%

64%

100%

FY23 ESSIP vesting outcomes – Metals

FY23 vesting outcomes – FFI

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P

S Operations
E
M
O
C
T
U
O

Individual KPIs

People and culture

Assessed individually

E
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O
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P

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O
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T
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Team measures

People and culture

Individual KPIs

Assessed individually

STRETCH TARGET

STRETCH TARGET

Awards made in relation to the FY23 Metals ESSIP reflect 
achievement of:
•  Operating and financial performance

Awards made in relation to the FY23 FFI ESSIP reflect 
achievement of:
•  Operating and financial performance

•  Consistent, strong safety performance

•  Progress against decarbonisation objectives

•  Partial achievement of people and culture objectives

•  Maturation of projects portfolio

•  Partial achievement of people and culture objectives

FY21 LTIP vesting outcomes

Share price over the last 3 years (A$/share)

Measure 

TSR

ROE

Strategic measures

Total 

Capped at 

% of award vesting¹

Weighting 
%

Result 
 %

Vesting 
%

33

33

34

94th percentile

134.5

46

5.4 out of 15

150

31.3

104.5

100

96.6

A$

30

25

20

15

10

5

0
Jun 20 Dec 20 Jun 21 Dec 21

Jun 22 Dec 22 Jun 23

¹ The Maximum Value Limit on the LTIP award means that executives may only benefit from 50 per cent growth in the share price from the initial grant value.  
For the FY21 LTIP, 96.6 per cent of the award has vested based on share price growth from a grant price of A$14.1462 per share to a vest price of A$21.9714.

Special recognition awards
As a result of their significant contribution to Fortescue as outlined in the Chair Letter, the Board approved one-off special 
recognition awards of A$1,976,000 for Elizabeth Gaines and A$1,000,000 for Ian Wells in FY23.

FORTESCUE  FY23 ANNUAL REPORT    |    81

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3.  BUSINESS PERFORMANCE

Fortescue delivered strong performance across many of 
our stretch safety, production and financial targets in FY23. 
These achievements were thanks to the dedicated efforts 
of the entire Fortescue team and are underpinned by our 
unique culture and Values and our strong focus on cost 
management and operating excellence. 

The health, safety and wellbeing of all of our people is 
engrained in our culture and at the centre of everything we 
do, as reflected in our safety performance for the year. In 
the 12 months to 30 June 2023, our TRIFR for our Metals 
business was maintained at 1.8. While this is an outstanding 
and industry-leading result, we are committed to continually 
improving our safety culture and working towards achieving 
zero harm across all our workplaces. 

Operating performance delivered record results in FY23 
with iron ore shipments of 192.0mt, representing Fortescue’s 
highest ever annual shipment and achieving the top end 
of market guidance. The first shipment of magnetite from 
our Iron Bridge operations was achieved in July. While 
this achievement was later than planned, commissioning 
is underway and a transition to operational production is 
anticipated to be achieved in Q1 FY24. Iron Bridge delivers 
diversification in Fortescue’s offering through a high-grade 
product and increases production capacity. This, coupled 
with our progress in Gabon through the Belinga Iron Ore 
Project, demonstrates our ongoing commitment to the long 
term sustainability of our business.

C1 cost in FY23 was US$17.54/wmt, a 10 per cent increase 
on the C1 cost in FY22. C1 cost continues to be impacted by 
significant cost pressures, including external inflationary 
factors impacting diesel, labour rates, energy and other 
input costs. Despite these challenges, Fortescue maintains 
our industry-leading cost position and our sustaining capital 
expenditure was slightly below target. 

Fortescue’s financial performance for the year was 
underpinned by consistent operating performance, strong 
customer demand, record shipments and an optimised 
product mix to deliver underlying net profit after tax of 
US$5,522m. This represents a decrease of 11 per cent on 
FY22, largely as a result of a reduction in price realisations 
reflecting the iron ore index.  

Progress was made throughout FY23 in our plan to 
decarbonise Fortescue’s operations against our target for 
Scope 1 and 2 emissions across our Australian iron ore 
operations. Notable achievements included the live testing 
of a battery electric haul truck prototype at our Christmas 
Creek site using innovative battery technology developed by 
Fortescue WAE. We were also able to test on our rail network 
a retrofitted locomotive capable of running on dual fuel with 
ammonia. 

More broadly across the Energy business, we progressed 
a number of key projects including the expansion of 
Fortescue WAE’s battery powertrain operations in the UK 
and completion of the construction phase of the Gladstone 
electrolyser manufacturing facility in Queensland. Significant 
advancements were also made against our global portfolio 
of green energy projects and in deepening relationships with 
offtake customers around the world.   

Looking forward, we are focused on delivering against our 
growth strategy to the benefit of all our stakeholders. With 
our investments in growth through Iron Bridge, Belinga and 
the Fortescue Energy portfolio, we are well placed to be the 
number 1 integrated green technology, energy and metals 
company and ensure our stakeholders continue to benefit 
from Fortescue’s success.

FORTESCUE  FY23 ANNUAL REPORT    |    82

Directors' reportSAFETY
1.8¹

TOTAL RECORDABLE  
INJURY FREQUENCY RATE

COST
US$17.54/wmt

REVENUE
US$16,871m

PRODUCTION
192.0mt

SUSTAINING CAPEX
US$1,211m

CULTURE
+25¹

FORTESCUE EMPLOYEE 
NET PROMOTER SCORE

1  Fortescue Metals

The following graphs show our Group performance against 
key financial measures in FY23:

Cost
US$/wmt

Production
wmt 

13.11

12.94

13.93

17.54

15.91

178.2

182.2

167.7

189.0

192.0

FY19

FY20

FY21

FY22

FY23

FY19

FY20

FY21

FY22

FY23

Free cash flow
US$m

8,961

4,449

3,572

4,251

3,328

Revenue
US$m

12,820

9,965

22,284

17,390

16,871

FY19

FY20

FY21

FY22

FY23

FY19

FY20

FY21

FY22

FY23

FORTESCUE  FY23 ANNUAL REPORT    |    83

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The graphs below shows Fortescue’s EBITDA vs ESSIP outcomes and TSR vs LTIP outcomes over the last three years.

Underlying EBITDA vs ESSIP outcomes

)

m
$
S
U

(

I

A
D
T
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16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

120%

100%

80%

60%

40%

20%

0%

m
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a
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FY21

FY22

FY23

Underlying EBITDA

Average ESSIP award as a % of maximum opportunity for KMP

TSR vs LTIP outcomes

)

%

(
R
S
T

600%

500%

400%

300%

200%

100%

0%

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

)

%

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L

I

3 years to
30/06/21

3 years to
30/06/22

3 years to
30/06/23

Vesting dates

Fortescue Metals Group TSR (%)

LTIP vesting (%)

The value for LTIP vesting outcomes in the chart above reflect the application of the LTIP Maximum Value Limit which 
reduced overall vesting significantly in 2021 due to the 442% increase in the share price over the three years prior. The 
actual performance outcome for FY21, FY22 and FY23 was 100%.

FORTESCUE  FY23 ANNUAL REPORT    |    84

Directors' report 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
a.  Five year Group performance
Fortescue continues to deliver operational and financial improvements across the business. Our performance against key 
financial measures for FY23 and the five years FY19 to FY23 (inclusive) are set out below.

UNDERLYING  
EBITDA

UNDERLYING NET 
PROFIT AFTER TAX

UNDERLYING RETURN 
ON EQUITY

US$9.96bn

US$5.5bn 

1

33%2

DIVIDENDS

A$1.75

per share

Total tonnes shipped (wmt)

Revenue (US$m)

Underlying EBITDA (US$m)

Net profit after tax (US$m)

Underlying net profit after tax (US$m)¹

Underlying return on equity (%)

Gearing (book value of debt/debt + equity)

Dividends declared (A$ per share)

Share price at 30 June (A$)

Change in share price (A$)

Change in share price (%)

2023

192.0

16,871

9,963

4,796

5,522

33²

23

1.75

22.18

4.65

27

2022

189.0

17,390

10,561

6,197

6,197

382

26

2.07

17.53

(5.81)

(25)

2021

182.2

2020

178.2

22,284

12,820

16,375

10,295

10,349

67

19

3.58

23.34

9.49

69

8,375

4,735

4,746

40

28

1.76

13.85

4.83

54

2019

167.7

9,965

6,047

3,187

3,187

31

27

1.14

9.02

4.63

105

¹ Underlying net profit after tax refers to results adjusted for the removal of significant non-cash and non-recurring items.

² Underlying return on equity, excluding Fortescue Energy costs.

4.  REMUNERATION OUTCOMES

As reported in Section 3, Fortescue has again delivered 
strong, consistent results against the majority of our key 
targets for FY23, underpinned by our Values based culture 
and the commitment of the entire Fortescue team.

a.  FY23 fixed remuneration changes
A market review of KMP fixed remuneration was undertaken 
as part of Fortescue’s broader annual salary review process. 
As a result of that review, and in order to remain competitive 
against peers in a tight market for talent, the Board approved 
the below increases to KMP fixed remuneration.

KMP

Executives

E Gaines

F Hick

M Hutchinson

D Otranto

J Shuttleworth

I Wells

% Increase

TFR A$

N/A

N/A

N/A

3

3

3

2,080,000

     2,080,000 

2,000,000

     1,287,500 

1,103,336

1,124,549

Where increases were awarded, they were effective from 
1 July 2022 and remain aligned with external benchmarks. 
Fiona Hick and Mark Hutchinson’s remuneration was set 

on commencement in February 2023 and August 2022 
respectively, aligned with previous CEO remuneration, and 
therefore didn’t receive the 3% increase.

b.  FY23 ESSIP performance outcomes
Fortescue’s short term incentive arrangements are designed 
to focus executives on both ‘what’ must be achieved 
(financial targets), as well as ‘how’ it should be achieved 
(non-financial targets and individual KPIs). Our ESSIP 
operations, people and culture, and individual KPIs have 
direct and quantifiable impacts on the Company. 

Historically Fortescue has used a cliff-vesting approach 
for the ESSIP. Based on the success experienced with a 
sliding scale approach for FFI in FY22, and in response to 
shareholder feedback, a sliding scale approach has now 
been adopted for the Fortescue Metals ESSIP. Stretch 
targets are set in line with our culture and Values, with 
outcomes for threshold and on-target levels of performance 
also set. The outcome is determined by the Board after 
applying significant rigour to ensure our strong record of 
outperformance is maintained.

Further details of the Fortescue Metals and FFI ESSIP 
approaches, scorecards and performance outcomes are 
included on the following pages.

FORTESCUE  FY23 ANNUAL REPORT    |    85

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y

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FORTESCUE METALS FY23 SCORECARD
The ESSIP performance objectives and outcomes in FY23 for Fortescue Metals are shown below.

Company wide operations and people and culture measures
The table below illustrates the operations and people and culture measures which apply consistently to the CEO 
Fortescue Metals, and COO Fortescue Metals during FY23. The outcome was 68.6 per cent out of a maximum of 80 per 
cent with the remaining of 20 per cent allocated to individual KPIs.

Measure

Weighting Detail

Stretch target

Assessed 
outcome

Commentary

Operations – 60% 

Safety1

12

Metals TRIFR

Not more  
than 1.8

Achieved

Injury risk profile

15% reduction

Fatality hurdle applies

TRIFR of 1.8 maintained. 22% 
reduction in Injury risk profile 
achieved over the year.

Production 

12

Total iron ore shipped

192.0mt

Exceeded

Record shipments of 192.0mt 
delivered in FY23.

No more than 
A$25.00/wmt  
(US$ 18.25)

No more than 
A$1,854m 
(US$1,353m)

>59.3%

C1 cost

12

Achieve C1 cost 

Cash flow 

12

Sustaining capital 
expenditure

Revenue

12

EBITDA margin 
(EBITDA/Total 
Revenue) 2

Ship higher value 
product volumes

Allocate a portion 
of product direct to 
Fortescue's wholly 
owned Chinese 
trading subsidiary

People and Culture – 20%

People and 
culture

20

Measured through the 
People Experience 
Survey as well as 
Board assessment:

Participation rate

Net promoter score

Female employment 
rate
Indigenous 
employment rate

>90%

>+34

>24%

>16%

Partially 
achieved

The FY23 C1 cost was A$25.82, slightly 
above the target level resulting in a 
partial achievement of this measure.

Exceeded A$1,792m (US$1,211m) sustaining capital 

expenditure for the full year was lower 
than the stretch target.

Exceeded A number of the revenue targets are 

market sensitive and therefore specific 
targets have not been disclosed. 
Overall, the revenue measure has been 
achieved

•  Full year EBITDA margin of 63%

•  120.8mt of Fortescue high value 

product shipped

•  16.4mt allocated to FMG Trading 

Shanghai in FY23

Partially 
achieved

Achievement of the People and 
Culture measures was as follows:

Survey participation rate: 91%

Net promotor score: +25

 Female employment rate: 21.6% 
(Fortescue Metals only)

Indigenous employment rate: 15.8% 
(Pilbara operations)

¹ In the event of a fatality, no award is made for the safety KPI.

²   EBITDA margin excludes Fortescue Energy costs.

 The non-IFRS financial information included in the table above has not been subject to audit.

FORTESCUE  FY23 ANNUAL REPORT    |    86

Directors' reportIndividual KPIs
The table below illustrates the individual KPIs which are customised by role for the CEO, and COO Fortescue Metals and 
make up a 20 per cent weighting. Outcomes for the CEO and COO were 20 per cent out of a maximum of 20 per cent.

Role

Stretch target

Fortescue 
Metals CEO

COO 
Fortescue 
Metals

Identify opportunities to improve 
productivity and sustained cost 
improvement across Fortescue 
Metals operations. Review and 
implement Metals leadership team 
structure and consolidate Group 
functions in consultation with 
CEO Fortescue Energy. Establish 
relationships and build networks 
through broad engagement across 
investment community, customers, 
industry, and Government. Deliver 
safe and efficient commencement of 
operations at Iron Bridge.

Identify opportunities to improve 
productivity and sustained cost 
improvement across Fortescue 
Metals operations. Ensure safe and 
cost effective delivery of operations. 
Deliver the first battery electric haul 
truck developed by the Green Fleet 
team in conjunction with Fortescue 
WAE and Liebherr to one Fortescue 
site. Lead delivery of Major Projects 
portfolio.

Assessed 
outcome

Achieved

Commentary

Cost saving opportunities identified, endorsed by 
the Board and embedded in FY24 budget.

Operating model review completed. Various key 
leadership appointments made during the year, 
aligned with revised operating model.

Safety performance at Iron Bridge exceeded 
targets for the year, and first concentrate 
produced and ramp up progressing well.

Achieved

Record shipments of 192.0mt delivered in FY23, 
maintaining industry leading safety performance 
and cost position.

Assumed leadership of Major Projects portfolio, 
which included Iron Bridge production in addition 
to engineering and services, with significant 
progress made in restoring construction schedule.

First battery electric haul truck delivered to 
Christmas Creek and testing undertaken in June 
2023.

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FORTESCUE  FY23 ANNUAL REPORT    |    87

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FORTESCUE FUTURE INDUSTRIES FY23 SCORECARD
The table below illustrates the ESSIP performance objectives and achievement outcomes for the Fortescue Energy CEO 
during FY23. The outcome was 75 per cent out of a maximum of 90 per cent.

Measure

Weighting Detail

Team measures - 90%

Safety¹

10

FFI TRIFR

Fatality  
hurdle applies

Stretch 
target

Assessed 
outcome

Commentary

Not more 
than 4.0

Achieved

FFI’s 12 month TRIFR was 0, 
significantly exceeding the 
stretch target.

People

Financial

10

15

Decarbonisation

15

Green Industry

15

Projects

25

Female employment rate

>38%

Not 
Achieved

The female employment rate at 
the end of FY23 was 33.6%.

Operating expenditure

No more than 
US$700M²

Exceeded

Full year operating expenditure 
was US$438M.

Live testing of zero 
emission vehicles/ 
equipment at Christmas 
Creek

Detailed design complete 
for 3 core products

Financial approval 
achieved for 2 
additional main global 
manufacturing facilities

3 projects enter FID, 
supported by a funding 
solution

Achieved

Equipment was delivered to site 
and testing undertaken in June 
2023. 

Achieved

Partially 
achieved

Detailed design completed 
for a number of core products 
including PEM Electrolyser and 
various components of the first 
Liebherr T264 truck. Significant 
progress made against design 
of other products including the 
Fast Charger.

During FY23, financial approval 
was received for additional main 
global manufacturing facilities 
in the UK and USA. 

Significant progress made 
against global portfolio of 
opportunities, marketing and 
funding capability and capacity, 
and project investment decision 
making.

¹ In the event of a fatality, no award is made for the safety KPI.

² Excludes expenditure associated with decarbonisation.

The non-IFRS financial information included in the table above has not been subject to audit.

FORTESCUE  FY23 ANNUAL REPORT    |    88

Directors' reportIndividual KPIs
The table below illustrates the individual KPIs for the Fortescue Energy CEO and carry a 10 per cent weighting.

Assessed 
outcome

Achieved

Role

Stretch target

Fortescue 
Energy CEO 

Identify opportunities to improve 
productivity and sustained cost 
improvement. Review and develop 
effective operating model, including 
global portfolio of projects and 
investment decision making process. 
Consolidate Group functions in 
consultation with Metals CEO. Deliver 
the first battery electric haul truck 
developed by the Green Fleet team 
in conjunction with Fortescue WAE 
and Liebherr to one Fortescue site. 
Finalise integration of Fortescue 
WAE.

Commentary

Cost saving opportunities identified, endorsed by 
the Board and embedded in FY24 budget.

Review of operating model complete including 
prioritisation of global portfolio of green energy 
projects with a number progressing towards final 
investment decision.

Effective Government, customer and community 
engagement globally has ensured high levels of 
brand awareness and engagement with potential 
customers.

First battery electric haul truck delivered to 
Christmas Creek and testing undertaken in June 
2023.

Integration of Fortescue WAE complete including 
organisation structure, leadership appointments 
and operating model.

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FORTESCUE  FY23 ANNUAL REPORT    |    89

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FY23 ESSIP cash and shares outcomes

The table below details the maximum ESSIP cash and share awards against the actual outcomes for FY23.

FY23

US$

F Hick3

)
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of ESSIP vested 
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ESSIP value2

%
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– 474,334  614,243

474,334 

614,243  

M Hutchinson³

1,339,079

112.5

50

757,856 66,305

85 644,178  644,170  834,171   1,288,348   1,478,349  

D Otranto

I Wells⁴

867,324

444,746

75

75

100

– 56,912

89

– 576,162

746,105 

576,162

746,105  

50

284,082 24,854

n/a

–

–   

–   

–   

–   

Remuneration values have been translated from Australian dollars to US dollars using an average exchange rate of 0.67365.

FY23

A$

F Hick³

R
F
T

704,731 

M Hutchinson³

1,987,796 

D Otranto

I Wells⁴

1,287,500 

660,203 

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100

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911,813 

704,126 

911,813 

50

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956,250 956,238  1,238,286  1,912,488  2,194,536 

100

50

–

56,912  89

–  855,284 

1,107,556  855,284  1,107,556 

421,706 24,854  n/a

– 

–

–

–

–

Elizabeth Gaines was not eligible to participate in the FY23 ESSIP and as such has not been included in the above tables. 

Julie Shuttleworth’s invitation to participate in the ESSIP was based on her Global Growth role, and not in her capacity as KMP, and as such has not been included 
in the above tables.

¹  Participant’s elected weighting in shares (minimum 50 per cent of the total award) divided by the strike price used to determine the number of share rights  

granted being the VWAP of Fortescue shares traded over the first five days of the plan year (A$16.9669).

² Nominal value of ESSIP vested rights is non-IFRS financial information and has not been subject to audit.

³  TFR and ESSIP values for F Hick and M Hutchinson are pro-rated based on commencement on 27 February 2023 and 4 August 2022 respectively.

⁴ TFR and ESSIP values for I Wells are reflective of pro-rata period served as CFO to 31 January 2023, ESSIP rights were lapsed as a result of I Wells resignation. 

FORTESCUE  FY23 ANNUAL REPORT    |    90

Directors' report 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
c.  FY21 LTIP performance outcomes
Each LTIP performance measure has a minimum performance hurdle for vesting with increasing levels applicable to each individual 
measure. There is an ability to earn up to 150 per cent of any individual measure by achieving stretch performance; however, the 
overall cap for the LTIP is 100 per cent of the maximum number of share rights granted.

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The FY21 LTIP was tested over the period from 1 July 2020 to 30 June 2023. The Company has achieved the performance measures 
shown in the table below.

FY21 LTIP Performance Outcomes  

Measure

TSR

ROE

Strategic measures

FY21 LTIP vesting outcome

Overall outcome capped at 100%

Weighting %

Threshold

Result

Achieved %

 Weighted 
achievement %

60th percentile

94th percentile

15%

46%

5 out of 15

5.4 out of 15

134.5

150.0

31.3

33

33

34

100

44.4

49.5

10.6

104.5

100

96.6

% of award vesting after application of Maximum Value Limit

As previously noted, the terms of the FY21 LTIP include a Maximum Value Limit on the vested value of the LTIP to prevent 
executives receiving a windfall gain as a result of growth in Fortescue’s share price over the allocation value of the award.

The cap has been determined and applied as follows:

Base FY21 LTIP Award x 150% = FY21 LTIP Maximum Value Limit

FY21 LTIP Maximum Value Limit / VWAP at vesting = Maximum number of Performance Rights that may vest.

The following table is an example calculation showing how the Maximum Value Limit is applied.

FY21 Performance Rights granted

VWAP at the start of the LTIP performance period

FY21 LTIP value at grant

Value cap

LTIP Maximum Value Limit (Base LTIP Award x 150%) 

VWAP at the end of the LTIP performance period 

Maximum FY21 LTIP Performance Rights (Maximum LTIP Value Limit divided by VWAP) 

100,000

A$14.1462

A$1,414,620

150%

A$2,121,930

A$21.9714

96,576

The calculation results in 96.6 per cent of the rights awarded at the beginning of the performance period vesting for all LTIP 
participants.

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FORTESCUE  FY23 ANNUAL REPORT    |    91

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proportion  
of award 
vested %

Result

Comment

94th 
percentile

134.5

Fortescue achieved a TSR 
of 102.2% and ranking at the 
94th percentile achieving  
result between target and 
stretch for this measure.

Performance measure and objective

TSR (33%)

In line with the Company’s approach to setting stretch targets, 
the Board determined that a vesting schedule more aggressive 
than standard market (local and global) practice was required to 
align executive reward for this performance measure with superior 
shareholder returns. 

The vesting criteria:
•   threshold at the 60th percentile, resulting in 25% of rights vesting;
•   target at the 80th percentile, resulting in 100% of rights vesting; and
•   stretch at the 100th percentile, resulting in 150% of rights vesting.

ROE (33%)

The vesting criteria:
•  threshold was set at 15%, resulting in 25% of rights vesting;
•  target was set at 20%, resulting in 100% of rights vesting; and
•  150% of rights will vest for greater than 30%.

46% 

150

Fortescue’s ROE performance 
exceeded the ROE stretch 
target performance hurdle 
of 30% achieving an average 
ROE over the three year 
period of 46%.

Strategic measures (34%)

Strategic measures

Iron Bridge: First Ore on Ship (FOOS) achieved for Iron Bridge 
in March 2022 and all project finance step-downs completed in 
accordance with the Project Funding commissioning requirements.

Pilbara Energy Connect (PEC): project successfully constructed 
and implemented with 25-30% of stationary energy sourced from 
renewables and a pathway identified to achieve a 26% reduction 
in emissions from existing operations from 2020 levels, by 2030. 
The pathway to include a mobile fleet solution and other initiatives 
subject to Board approval.

FFI: Establish FFI with governance and funding structures 
identified to achieve the following, subject to Board approval; 
Establish a ‘proof of concept’ H-H project in established 
hydropower markets such as Australia or New Zealand; Convert 
as a minimum one of the international opportunities identified 
on the 2020 H-H global trip from a Deed of Agreement to 
defined project and supporting agreements (covering tax, risk 
management and royalties) with an agreed business case and 
funding identified to deliver on an international H-H project.

Iron Ore Growth: Subject to Board approval, grow through 
exploration and/or acquisition of iron ore resources to sustain mine 
life and develop a pipeline of growth opportunities for the iron ore 
operations.

Copper: Develop a pipeline of projects and exploration targets 
for South America (or elsewhere if approved by the Board) with 
the aim of creating a world leading copper producing hub for 
Fortescue.

Heritage: Maintain relationships with native title partners and 
continue to adopt a strategy of avoiding sites of significant 
cultural heritage value whilst at the same time securing 
approvals to achieve mine plan objectives and adhering to the 
requirements of the Aboriginal Heritage Act.

5.4 out 
of 15

31.3

Progress has been made in 
Fortescue’s overall business 
strategy.

Not achieved

First ore on ship not 
achieved in FY23.

Achieved

Not achieved

Transmission line component 
of original PEC complete. 
Decarbonisation pathway 
to real zero developed, 
exceeding original target of 
26% reduction.

FFI strategy has evolved 
significantly since the 
KPI was established, 
deprioritising hydropower.

Achieved

Partly 
Achieved

Achieved

Acquisition of Mindy South 
and commencement of 
mining in Gabon

Portfolio of copper 
exploration options has 
increased across Argentina, 
Chile, Peru, Kazakhstan, and 
Australia. Beyond copper, 
rare earth elements options 
secured in Brazil.

Fortescue has continued to 
follow the strategy of avoiding 
sites of significant cultural 
heritage. 

Industry-leading approaches 
to access inventory, e.g. co-
management plans with TO 
groups, have been developed.

FORTESCUE  FY23 ANNUAL REPORT    |    92

Directors' reportd.  Actual remuneration paid (non-IFRS)
The following tables show the nominal remuneration value realised by the individual and includes fixed remuneration,  
cash incentives and the nominal value of equity at the time the share rights vest or shares are awarded:

US$

Name

E Gaines⁶

F Hick

M Hutchinson

D Otranto

J Shuttleworth⁷

I Wells⁸

1

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233,532 

474,742 

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–   

–   

1,339,079 

644,178  

867,324 

69,931

444,746 

–   

–   

–

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2,325,251

1,331,132 

3,889,915

614,243  

834,171  

746,105  

–   

 –   

–   

–   

–   

772,260

–   

–   

–

–

1,088,985 

2,817,428 

1,613,429 

842,191

 –   

673,650 

1,118,396  

Remuneration values have been translated from Australian dollars to US dollars using an average exchange rate of 0.67365 except for the FY21 LTIP  
which has been translated at 0.71546, which is the three year average exchange rate to reflect the LTIP performance period.

A$

Name

E Gaines⁶

F Hick

M Hutchinson

D Otranto

J Shuttleworth⁷

I Wells⁸

1

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346,667 

704,731 

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3,250,009

1,976,000

5,572,676 

911,813  

1,987,796 

956,250  

1,238,286  

1,287,500 

103,809 

660,203 

–   

–   

–   

1,107,556 

–   

–   

–

–   

–   

1,079,389 

–   

–   

–   

–   

1,616,544  

4,182,332  

2,395,056  

1,183,198  

–   

1,000,000 

1,660,203 

¹ Fixed remuneration includes cash salary, paid leave and superannuation.

² FY23 ESSIP share rights granted at the beginning of the performance period at a VWAP of A$16.9669.

³  FY23 ESSIP vested rights awarded have a nominal value based on A$21.9714 being the five day VWAP at the beginning of FY24. The increase in share 

price over the respective performance period has resulted in an unrealised increase in equity value to KMP in respect to this plan.

⁴ FY21 LTIP share rights granted at the beginning of the performance period at a VWAP of A$14.1462.

⁵  FY21 LTIP vested rights awarded have a nominal value based on A$21.9714 being the five day VWAP at the beginning of FY24. The increase in share price 

over the respective performance periods has resulted in an unrealised increase in equity value to KMP in respect to these plans.

⁶  Elizabeth Gaines served as CEO up to 31 August 2022, the fixed remuneration value in the above table reflects actual remuneration paid up to this date. 
Elizabeth retained eligibility to participate in the FY21 LTIP on a pro-rata basis up to 31 August 2022. The Board awarded Elizabeth a special recognition 
award on cessation to recognise her significant achievements with Fortescue over her tenure, this value is shown in the Other payment column.

⁷ Julie Shuttleworth ceased to be a KMP on 4 August 2022, her fixed remuneration and LTIP value have been pro-rated to reflect this date.

⁸  Ian Wells served as CFO up to 31 January 2023, the fixed remuneration value in the above table reflects the actual remuneration paid up to this date. Ian 

did not retain any ongoing eligibility to participate in the LTIP. The Board awarded Ian a special recognition award on cessation to recognise his significant 
achievements with Fortescue over his tenure, this value is shown in the Other payment column. 

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FORTESCUE  FY23 ANNUAL REPORT    |    93

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5.  INCENTIVE PLAN OPERATION

The purpose of the ESSIP and LTIP is to incentivise and reward key Fortescue Executives (including KMP) for achieving 
annual stretch Company and individual performance objectives that drive shareholder value.

a.  ESSIP
Below we have set out the key terms of the ESSIP for FY23 (noting differences, where applicable, between Fortescue Metals 
and FFI plans):

Element

Delivery

Description

At the start of the performance period, participants elect the portion of award they wish to receive in rights 
with the remaining award to be delivered as cash. The plan allows Executives to elect to receive up to 100% of 
awards in equity (a minimum of 50% must be elected to be received by way of share rights).

Each share right, if vested, entitles the participant to an ordinary share in Fortescue for nil consideration.

Performance  
period

One year (i.e. 1 July to 30 June).

Valuing  
awards

The number of ESSIP share rights are calculated based on the VWAP of Fortescue shares traded over the 
first five trading days of the performance period. As such:

•  If the share price at the time of vesting is higher, Executives will receive higher value per share right.

•  If the share price at the time of vesting is lower, the value to Executives is decreased.

The value of share rights is therefore aligned with shareholder interests from the beginning of the 
performance period as executives receive value consistent with share price movements.

Performance  
measures

The Board continues to recognise the importance of focusing on operational and strategic targets with 
people and culture also being a key driver of success.

In FY23, the Board set a number of challenging targets for Fortescue Metals and FFI (noted below). 

The Board determined the relative weighting and mix of performance objectives for KMP and Executives to 
deliver long term sustainable shareholder value.

Further details of performance measures for FY23 are disclosed at Section 4 above. 

FORTESCUE METALS

FFI

The Board set a number of challenging targets in 
respect to operations, including production, safety, 
cost and revenue across all operating and support 
functions:

•  The operational measures were chosen as they 

The Board set a number of challenging targets specific 
to FFI business including safety, delivery of projects 
in Australia and globally, as well as decarbonisation 
and green industry across all operating and support 
functions:

represent the key drivers of financial performance 
(underlying EBITDA) of the Company and provide 
a framework for delivering long term shareholder 
value, irrespective of the iron ore price.

•  The measures were chosen as they represent the key 
drivers of financial performance of FFI and provide 
a framework for delivering long term shareholder 
value.

•  The inclusion of a people and culture metric 
recognises the importance of supporting the 
Company’s differentiated culture underpinned by 
its core Values, which is fundamental to corporate 
success. 

•  Individual KPIs focus on critical objectives 

and are set at stretch levels of performance 
with measures and weightings aligned to the 
individual’s ability to influence outcomes such as 
the delivery of a project and business expansion.

•  The inclusion of a people and culture metric 

recognises the importance of supporting a culture 
which is fundamental to success in Australia and 
globally. 

•  Similar to Fortescue Metals, individual KPIs focus 

on critical objectives and are set at stretch levels of 
performance with measures and weightings aligned 
to the individual’s ability to influence outcomes such 
as the delivery of a project and business expansion.

FORTESCUE  FY23 ANNUAL REPORT    |    94

Directors' reportElement

Delivery

Description

At the start of the performance period, participants elect the portion of award they wish to receive in rights 

with the remaining award to be delivered as cash. The plan allows Executives to elect to receive up to 100% of 

awards in equity (a minimum of 50% must be elected to be received by way of share rights).

Each share right, if vested, entitles the participant to an ordinary share in Fortescue for nil consideration.

Performance  

One year (i.e. 1 July to 30 June).

period

Valuing  

awards

The number of ESSIP share rights are calculated based on the VWAP of Fortescue shares traded over the 

first five trading days of the performance period. As such:

•  If the share price at the time of vesting is higher, Executives will receive higher value per share right.

•  If the share price at the time of vesting is lower, the value to Executives is decreased.

The value of share rights is therefore aligned with shareholder interests from the beginning of the 

performance period as executives receive value consistent with share price movements.

Performance  

The Board continues to recognise the importance of focusing on operational and strategic targets with 

measures

people and culture also being a key driver of success.

In FY23, the Board set a number of challenging targets for Fortescue Metals and FFI (noted below). 

The Board determined the relative weighting and mix of performance objectives for KMP and Executives to 

deliver long term sustainable shareholder value.

Further details of performance measures for FY23 are disclosed at Section 4 above. 

FORTESCUE METALS

FFI

The Board set a number of challenging targets in 

The Board set a number of challenging targets specific 

respect to operations, including production, safety, 

to FFI business including safety, delivery of projects 

cost and revenue across all operating and support 

in Australia and globally, as well as decarbonisation 

functions:

and green industry across all operating and support 

•  The operational measures were chosen as they 

functions:

represent the key drivers of financial performance 

•  The measures were chosen as they represent the key 

(underlying EBITDA) of the Company and provide 

drivers of financial performance of FFI and provide 

a framework for delivering long term shareholder 

a framework for delivering long term shareholder 

value, irrespective of the iron ore price.

value.

•  The inclusion of a people and culture metric 

•  The inclusion of a people and culture metric 

recognises the importance of supporting the 

recognises the importance of supporting a culture 

Company’s differentiated culture underpinned by 

which is fundamental to success in Australia and 

its core Values, which is fundamental to corporate 

globally. 

success. 

•  Similar to Fortescue Metals, individual KPIs focus 

•  Individual KPIs focus on critical objectives 

on critical objectives and are set at stretch levels of 

and are set at stretch levels of performance 

performance with measures and weightings aligned 

with measures and weightings aligned to the 

to the individual’s ability to influence outcomes such 

individual’s ability to influence outcomes such as 

as the delivery of a project and business expansion.

the delivery of a project and business expansion.

Element

Description

FORTESCUE METALS AND FFI

Target setting

Fortescue Metals and FFI set challenging ESSIP stretch targets and use a sliding scale for each individual 
objective with vesting available for threshold, target and stretch levels of performance. The sliding scale 
does not apply to safety objectives which are either met or not met. When deliberating on performance 
outcomes, the Board considers the level of achievement against targets and may approve a stretch award 
on each KPI to reflect the degree of performance by the business. While each individual KPI has the 
opportunity to achieve stretch levels of performance, the overall outcome is capped at 100%.

Performance Level

Below threshold

Threshold

Between threshold and target

Target

Stretch

% of Target Achieved

% of Target Awarded

< 90% of Target

90% of Target

95% of Target

100% of Target

≥ 120% of Target

Nil

10

50

100

150

Outcomes between performance levels are calculated on a linear basis.

Board 
discretion

Awards under the ESSIP are at all times subject to the Board’s discretion. When deliberating on 
performance outcomes, the Board follows a rigorous assessment process including: 

•  The degree of stretch in the measures and targets and the context in which the targets were set
•  The level of achievement against the stretch targets
•  The operating environment over the performance period and management’s ability to respond to 

unforeseen events (e.g. cyclones, floods, fire, pandemic)
•  Financial performance and shareholder value generated
•  Global competitiveness and level of improvement compared to global peers during the period 
•  The level of improvement across key business drivers on the prior year
•  Any other relevant under or over performance or other criteria not stated above. 

In circumstances where performance against stretch targets is not accurately reflected in the level of 
achievement against stretch targets (whether under or over), the Board may exercise its discretion to 
increase or decrease the vesting level of the incentive and therefore the value awarded. This exercise of 
discretion and the reasons for it, will be clearly communicated in our Remuneration Report.

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FORTESCUE  FY23 ANNUAL REPORT    |    95

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
b.  LTIP
The LTIP operates under the Performance Rights Plan Rules as approved by Shareholders at the Company’s Annual General 
Meeting on 9 November 2021.

Below we have set out the key terms of the LTIP for FY23:

Element

Delivery

Description

Share rights  
Each share right entitles Executives (subject to achievement of the performance conditions) to one fully 
paid ordinary share in Fortescue for nil consideration.

Performance 
period

Three years

Performance 
measures – 
summary

The relative weighting between financial and strategic measures provides the ability to assess 
performance across a cyclical market. The inclusion of strategic measures is deliberate to ensure 
alignment between short and long-term value creation by ensuring long-term value is not compromised.

FORTESCUE METALS

FFI

Performance measure breakdown

Performance measure breakdown

Total Shareholder Return (33%)

Return on Equity (33%)

Key Strategic Measures (34%)

Total Shareholder Return (40%)

Emissions Reduction and Strategic Measures 
(60%)

Each LTIP performance measure has a minimum performance hurdle for vesting with increasing levels 
applicable to each individual measure. There is an ability to earn up to 150% of any individual measure 
by achieving stretch performance. Each individual measure contributes to the overall result with vested 
rights awarded based on the aggregate of the measures.

Vesting between performance levels is calculated on a linear basis with the stretch element considered 
together with the achievement of all performance measures and subject to the aggregate performance 
cap. While each individual performance measure includes stretch targets, with a relative contribution 
on any individual measure of up to 150%, the overall cap for the LTIP is 100% of the maximum number of 
share rights granted.

Relative TSR performance measure

FORTESCUE METALS AND FFI

Relative TSR is a measure of the performance of the Company’s shares over a three year period against 
the ASX 100 Resources Index. It combines share price appreciation and dividends paid to show the total 
return to the shareholder expressed as a percentage. Relative TSR hurdles are valuable because the 
Company needs to outperform a peer group of participants to receive any reward and therefore, is aligned 
to relative market performance.

The comparator group for the FY23 grant comprises the companies in the ASX 100 Resources Index. The 
ASX 100 Resources Index has been chosen as the comparator group because this is a transparent market 
indicator, includes Fortescue’s ASX listed commodity market peers and represents the peer group that 
Fortescue competes with for investment. 

When formulating the vesting schedule for the TSR performance measure, the Board considered both 
local and international market practice. In line with the Company’s approach to setting stretch targets, the 
Board determined that a vesting schedule more aggressive than standard market practice was required 
in order to align executive reward for this performance measure with superior shareholder returns. The 
vesting criteria for both threshold and target have been set at the 60th percentile and 80th percentile 
(respectively), higher than standard market practice. The plan also provides for a premium grant of awards 
(subject to the cap described above) where Fortescue delivers the market leading total shareholder return 
over the performance period. The TSR vesting schedule is as follows:

Performance 
and vesting 
conditions

FORTESCUE  FY23 ANNUAL REPORT    |    96

Directors' report 
 
Element

Description

Performance 
and vesting 
conditions 
(continued)

FORTESCUE METALS

FFI

LTIP TSR target and vesting schedule

Performance

Average TSR

Portion of tranche that vests

Below threshold

Below the 60th percentile

Nil

Threshold

At the 60th percentile

25% of share rights vest

Target

Stretch

At the 80th percentile

100% of share rights vest

At the 100th percentile

150% of share rights vest

Vesting between performance levels is calculated on a linear basis with the stretch element considered 
together with the achievement of all performance measures and subject to the aggregate performance cap.

The Board acknowledge that a relative TSR hurdle can result in unintended outcomes. The intent is to ensure 
no windfall gains or undue penalty. In the event that absolute TSR is negative, but the relative TSR hurdle is 
achieved, the Board will consider overall performance and circumstances and may, at its absolute discretion, 
reduce the level of vesting or determine that no award will be made in respect to the TSR measure.

FORTESCUE METALS

FFI

The ROE performance measure does not apply to the 
FFI LTIP grant.

ROE performance measure

ROE has been used as a measure in Fortescue’s  
LTIP for some time now and measures how 
effectively management is using Fortescue’s  
assets to create profits.

The ROE vesting schedule is as follows:

LTIP ROE target and vesting schedule

Performance

ROE

Portion of tranche 
that vests

Below threshold

<25%

Nil

Threshold

Target

25%

30%

Stretch

>35%

25 per cent of share 
rights vest

100 per cent of share 
rights vest

150 per cent of share 
rights vest

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FORTESCUE  FY23 ANNUAL REPORT    |    97

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Element

Description

FORTESCUE METALS

FFI

Strategic Measures

Emissions Reduction and Strategic Measures

Performance 
and vesting 
conditions

Strategic measures are aimed at directing performance toward the achievement of the Company’s long-
term strategic objectives and not focusing on annual short-term goals. The strategic objectives devised 
by the Board specifically relate to key milestones and objectives that are fundamental to the Company’s 
sustainability, continuing development and growth and delivery of shareholder value. 

In line with the recommendations of the Remuneration and People Committee, the LTIP performance 
measures comprise strategic measures with associated key performance indicators for the Company 
aimed at directing performance towards the Company’s long-term objectives. 

The strategic measures for the FY23 grant are set out below.

Strategic measures

Fortescue Metals

FFI

Decarbonisation

Green industry

Green iron

Mobile fleet and stationary power

Targets with respect to 

Belinga iron ore development

Financials (CAPEX & revenue)

Access to inventory/  
iron ore resources

Projects

Diversity

Whether a strategic objective has been achieved is measured at the end of the three-year performance 
period on an outcome basis (and subject to Board discretion) with vesting as follows:

LTIP strategic measure target and vesting schedule

Performance

Score

Portion of tranche that vests

Below threshold

Threshold

Target

Stretch

<5

5

10

15

Nil

25 per cent of share rights vest

100 per cent of share rights vest

150 per cent of share rights vest

Board 
discretion

The LTIP is subject at all times to the Board’s absolute discretion. 

The terms of the FY21 LTIP include a Maximum Value Limit, which caps the number of share rights 
that will vest in circumstances where there has been a significant increase in share price over the 
performance period. The Maximum Value Limit baseline is 50% share price growth over the performance 
period noting that the Board may approve higher levels of vesting when considering Company 
performance and/or any other fact, event or circumstance that may impact the outcomes of the LTIP. In 
determining the level of the Maximum Value Limit to be applied, the Board will have consideration to any 
perceived windfall gain in Fortescue’s share price, influenced in part by iron ore prices outside the control 
of management.

FORTESCUE  FY23 ANNUAL REPORT    |    98

Directors' reportc.  General terms applying to equity awards
The occurrence of particular events may affect the grant and vesting of the ESSIP and LTIP equity awards. The table below 
outlines how these awards may be addressed, noting that the Board at all times maintains an overriding and absolute discretion 
with respect to the incentive plans:

Element

ESSIP

LTIP

What 
happens on 
cessation of 
employment

Unless the Board exercises its discretion under 
the ESSIP rules, unvested performance rights will 
be forfeited on cessation for individuals who leave 
during the year (i.e. before 30 June).

Unless the Board exercises its discretion under 
the LTIP rules, unvested performance rights will 
be forfeited on cessation for individuals who leave 
during the year (i.e. before 30 June).

Individuals who commence during the year will have 
awards under the ESSIP pro-rated based on service 
during the performance period.

Malus and 
Clawback 
Policy

Fortescue operates a Malus and Clawback Policy which applies to both the ESSIP and LTIP. The Policy will 
be initiated where in the opinion of the Board:

•  a Participant has engaged in fraud, dishonesty or gross misconduct, breached his or her obligations to 

the Group or there is a material misstatement of financial information

•  an Award, which would not have otherwise vested, vests or may vest as a result of the fraud, dishonesty 

or breach of obligations of any other person

•  circumstances have occurred that result in an unfair benefit being obtained by any Participant.

The Board’s discretion, with respect to the operation of the Policy, is considered standard market practice 
and an appropriate mechanism to ensure the Board has sufficient flexibility to respond to changing or 
unexpected circumstances (should they arise).

Change of 
control

The performance period end date will generally be brought forward to the date of the change of control 
and awards will vest over this shortened period, subject to ultimate Board discretion.

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FORTESCUE  FY23 ANNUAL REPORT    |    99

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6.  EXECUTIVE CONTRACT TERMS

KMP are employed on a rolling basis with no specified fixed term. KMP are required to provide written notice of six months 
(as specified in their individual service agreement) to terminate their employment. Contractual termination benefits for KMP 
comply with the limits set by the Corporations Act 2001.

KMP are remunerated on a TFR basis inclusive of superannuation and allowances. The table below details the remuneration 
details for KMP for FY23:

A$

Position

CEO

Executive

E Gaines²

CEO Metals

F Hick³

2,080,000

2,080,000

CEO Energy

M Hutchinson⁴

2,000,000

COO Metals

D Otranto

1,287,500 

CEO FFI

J Shuttleworth⁵

1,103,336

CFO

I Wells⁶

1,124,549

Maximum ESSIP 
opportunity

Maximum LTIP 
opportunity

TFR (A$)1

% of TFR

A$

% of TFR

A$

Nominal value of 
total remuneration 
package at 
maximum 
opportunity A$

112.5

112.5

112.5

75

75

75

2,340,000

2,340,000

2,250,000

965,625 

827,502

843,412

150

150

150

100

100

100

3,120,000

3,120,000

3,000,000

7,540,000

7,540,000

7,250,000

 1,287,500 

3,540,625 

1,103,336

1,124,549

3,034,174

3,092,510

¹ Includes superannuation and allowances. TFR is reviewed annually by the Remuneration and People Committee.

² E Gaines was CEO up to 31 August 2022.

³ F Hick commenced as CEO Metals on 27 February 2023 and departed on 27 August 2023.

⁴ M Hutchinson commenced as CEO FFI (subsequently Fortescue Energy) on 4 August 2022.

⁵ J Shuttleworth was CEO FFI up to 4 August 2022.

⁶ I Wells was CFO up to 31 January 2023.

FORTESCUE  FY23 ANNUAL REPORT    |    100

Directors' report7.  NON-EXECUTIVE DIRECTOR  

REMUNERATION

a.  Non-Executive Director remuneration policy and fees
Fortescue’s policy on Non-Executive Director remuneration requires that Non-Executive Director fees are:

•  Not ‘at risk’ to reflect the nature of their responsibilities and safeguard their independence; and

•  Market competitive with fees set at levels comparable with Non-Executive Director remuneration of comparable 

companies.

The maximum aggregate remuneration payable to Non-Executive Directors is A$4.5 million, which was approved by 
shareholders at the Annual General Meeting on 22 November 2022. 

Most Non-Executive Directors receive fees for both Board and Committee membership (the exception being the Executive 
Chairman, who has elected to forgo all Board fees). The payment of additional fees for serving on a Committee recognises 
the additional time commitment required by Non-Executive Directors who serve on a Committee.

Position 

Board Executive Chairman1

Deputy Chair and Lead Independent Director

Non-Executive Director

Audit, Risk Management and Sustainability Committee (ARMSC) Chair

ARMSC Member

Remuneration and People Committee (RPC) Chair

RPC Member

Finance Sub-Committee Member

FFI Board Fee

Nomination Committee Member

Fee A$ effective  
1 June 2022

–

1,265,0002

230,000

65,000

30,000

65,000

30,000

12,000

184,000

–

1 The Executive Chairman of the Board has elected to forego Directors fees and receives no form of remuneration. 

2 Inclusive of Committee membership fees.

Non-Executive Directors do not receive retirement benefits, nor do they participate in any incentive programs of the Company.

b.  Exertion payment – Elizabeth Gaines
To recognise the additional work, time and travel commitment associated with the Global Ambassador role, in additon to 
her day-to-day Board and Committee duties, the Board approved a one-off exertion cash payment to Elizabeth Gaines of 
A$794,836. As disclosed to the market in June 2023, Elizabeth has transitioned to an Executive Director position effective 
from 1 July 2023 to better reflect the requirements of the role.

c.  Non-executive Director Salary Sacrifice Share Rights Plan
Non-Executive Directors may choose to sacrifice a portion or all of their base fees (excluding Committee fees and Company 
superannuation contributions) to be used to acquire vested rights to Fortescue shares under the Non-Executive Director 
Salary Sacrifice Share Rights Plan.

Shares, to the gross value of the amount salary sacrificed, are purchased on market twice a year following the announcement 
of Fortescue’s half and full year results in February and August.

The VWAP at the time of purchase is used to determine the number of vested rights to be allocated to Non-Executive 
Directors. Vested rights may be exercised at any time, up to 15 years from date of grant.

Shares will be held by Pacific Custodians (as Trustee) until the vested rights are exercised into shares. Vested rights and 
shares acquired under this Plan are not subject to performance conditions because they are issued in lieu of salary which 
would otherwise be payable to the relevant Non-Executive Director.

FORTESCUE  FY23 ANNUAL REPORT    |    101

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8.  REMUNERATION GOVERNANCE

Fortescue believes that robust governance is critical to underpinning the effectiveness of the remuneration strategy.

a.  Remuneration and People Committee
The Remuneration and People Committee (RPC) operates under a Board-approved Charter. The purpose of the RPC is to 
provide assistance and recommendations to the Board to ensure that it is able to fulfil its responsibilities.

The RPC in FY23 consisted solely of Non-Executive Directors. The Chief Executive Officers and others may be invited to 
attend all or part of meetings by the RPC Chair as required but have no vote on matters before the RPC.

A copy of the RPC Charter is available from the Corporate Governance section of our website at www.fortescue.com 

REMUNERATION CONSULTANTS

•   May be engaged directly by the Board 

or RPC to provide advice or information 
relating to KMP that is free from influence of 
management.

•   Will be engaged directly by management 

other than in respect of KMP to  
provide data to ensure Fortescue’s 
remuneration position  
remains competitive.

During the year ended  30 June 2023, 
the Committee sought advice from 
remuneration consultants from time to time 
for remuneration advisory services. This 
did not  involve providing the RPC with any 
remuneration recommendations as  
defined by the Corporations Act 2001.

Board Remuneration 
and People 
Committee

Remuneration
Consultants

BOARD OF DIRECTORS

•   Approve the remuneration of  

Non-Executive Directors and CEO

•   Ensure remuneration practices are 
competitive and strategic and align 
with the attraction and retention 
policies of the Company

Board of 
Directors

Human Resources 
Management

BOARD REMUNERATION  AND  
PEOPLE  COMMITTEE

Advise the Board on:
•   Remuneration strategy, policies and 

practices

•  NED and senior executive remuneration
•  Committee member appointments 
•   Senior executive recruitment and the 
Company’s recruitment, ESSIP, LTIP, 
retention and termination policies and 
annual performance reviews
•   Succession planning and talent 

management

•  Diversity strategy and gender pay equity 

HUMAN RESOURCES 
MANAGEMENT

•   Implement of remuneration 

policies and practices

•   Advise the RPC of changing 

statutory and market conditions

•   Provide relevant information to 
the RPC to assist with decisions

b.  Minimum shareholding conditions
All Directors and employees are encouraged to own Fortescue shares and the Company enables employee participation as a 
shareholder through short and long-term incentives, salary sacrifice and dividend reinvestment programs.

A minimum shareholding policy applies to Directors and Executives to support a long-term focus and further strengthen 
alignment with shareholders. The minimum shareholding required is as follows:

Non-Executive Directors:

100 per cent of annual base fee

CEO¹:

200 per cent of total fixed remuneration

Other Executive KMP:

100 per cent of total fixed remuneration

¹ Applies to Fortescue Metals and Fortescue Energy CEOs.

Participants are required to meet their respective minimum shareholding within a reasonable timeframe, generally within  
five years from the effective date of the policy, or the date of their appointment, if later. The Directors’ and Executives’ Shareholding  
Policy can be accessed from the Corporate Governance section of our website at  www.fortescue.com

c.  Board discretion
The Committee and the Board consider it critical that they are able to exercise full and appropriate discretion in order to ensure  
that remuneration outcomes for Executives appropriately reflect the performance of individuals, the Group, and meet the  
expectations of shareholders.

FORTESCUE  FY23 ANNUAL REPORT    |    102

Directors' reportd.  Securities Trading Policy
Fortescue’s Securities Trading Policy provides guidance on how Company securities may be dealt with. The Securities 
Trading Policy details acceptable and unacceptable periods for trading in Company Securities including detailing potential 
civil and criminal penalties for misuse of confidential information.

Fortescue’s Securities Trading Policy provides guidance on acceptable transactions in dealing in the Company’s various 
securities, including shares, debt notes and options.

The policy also sets out a specific governance approach for how the Chairman and Directors can deal in Company Securities.  
The Company’s Securities Trading Policy can be accessed from the Corporate Governance section of our website at  
www.fortescue.com

9.  STATUTORY DISCLOSURES

Statutory remuneration disclosures are prepared in accordance with Australian Accounting Standards and include share 
based payments expensed during the financial year, calculated in accordance with AASB 2 Share based payments. The 
estimated fair value for ESSIP and LTIP performance rights was determined using an option pricing model as disclosed in 
note 18 of the Financial Report.

a.  Executive remuneration
Statutory remuneration differs significantly from actual remuneration paid to executives due to the accounting treatment of 
share-based payments. For details of remuneration actually paid to the Chief Executive Officers and Executives in FY23 refer 
to Section 4. The tables below include statutory remuneration disclosures for FY23 and FY22. Disclosures are provided in 
USD and AUD.

US$

Short-term employee benefits

Post 
employment 
benefits

Long-term 
employee 
benefits

Share-based 
payments

Total
statutory
remuneration

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FY23

230,444

– 1,331,132 19,230

FY22

1,490,012 708,555 725,950

3,202

3,088

19,964

15,718

–

123,764

1,723,376

88,975

409,630 1,351,985

4,798,273

Other Key Management Personnel of Fortescue

F Hick²

FY23

465,850

FY22

–

–

–

–

–

329

–

8,892

42,911

596,312 

415,859 

 1,530,153 

–

–

–

–

–

FY23 1,320,924 644,178 

– 24,579

18,154

101,767

760,843 

460,164

3,330,609

M Hutchinson3

D Otranto

J Shuttleworth4

FY22

–

FY23

848,799

–

–

FY22

608,669 216,098

FY23

68,327

–

–

–

–

–

FY22

760,528

– 373,864

–

623

6,346

–

–

I Wells⁵

FY23

431,965

– 673,650

7,711

FY22

775,628

–

381,124

3,202

–

18,525

14,973

1,603

17,109

12,780

17,109

–

–

–

–

35,692

680,519  304,560

1,888,718 

26,898

135,746

109,141

6,639

–

28,636

1,117,871

105,205

59,570

435,796

520,638

2,167,505

63,732

– (441,199)

748,639

58,187

316,239

488,552

2,040,041

Remuneration values have been translated from Australian dollars to US dollars using an average exchange rate of 0.72595 for FY22 and 0.67365 for FY23.

FORTESCUE  FY23 ANNUAL REPORT    |    103

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a.  Executive remuneration (continued)

A$

Short-term employee benefits

Post 
employment 
benefits

Long-term 
employee 
benefits

Share-based  
payments

Total
statutory
remuneration

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E Gaines¹

FY23

342,083

–   

1,976,000 28,546

4,583

23,333

–   

183,721

2,558,266

FY22 2,052,500 976,038 1,000,000

4,411

27,500

122,564

564,268 1,862,366

6,609,647

Other Key Management Personnel of Fortescue

F Hick²

FY23

691,532

FY22

–

–

–

–

–

488

13,199

63,700

885,195 

617,322

2,271,435

–

–

–

–

–

–

M Hutchinson³

D Otranto

J Shuttleworth⁴

I Wells⁵

FY23 1,960,847 956,250 

– 36,486

26,949

151,069

1,129,434 

683,091

4,944,126

FY22

–

FY23 1,260,000

–

–

FY22

838,445 297,676

FY23

101,429

FY22

1,047,632

–

–

–

–

–

–

515,000

–

–

–

–

–

–

925

27,500

52,983

1,010,196 

452,104

2,803,708

8,741

20,625

37,052

186,991

150,342

1,539,872

–

–

2,380

9,856

–

42,509

156,173

23,568

82,058

600,312

717,182

2,985,752

FY23

641,231

– 1,000,000

11,446

18,972

94,606

– (654,938)

1,111,317

FY22 1,068,432

-

525,000

4,411

23,568

80,153

435,621

672,983

2,810,168

¹  Elizabeth Gaines served as Executive Director up to 31 August 2022 before transitioning to a Non-Executive Director position. The values in the above table 
for FY23 reflect remuneration up to that date. On leaving the business Elizabeth Gaines was awarded a special recognition award to reflect her significant 
achievements and contributions during her tenure.

² Fiona Hick commenced as CEO Fortescue Metals on 27 February 2023 and departed on 27 August 2023.

³ Mark Hutchinson was appointed to the role of CEO FFI on 4 August 2022 becoming KMP from that date. 

⁴Julie Shuttleworth ceased to be a KMP from 4 August 2022. The values in the above table for FY23 reflect remuneration up to that date. 

⁵  I Wells ceased to be a KMP from the date of his cessation of employment on 31 January 2023. The values in the above table for FY23 reflect remuneration up to 
that date. On leaving the business Ian Wells was awarded a special recognition award to reflect his significant achievements and contributions during his tenure.

FORTESCUE  FY23 ANNUAL REPORT    |    104

Directors' report 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
b.  Non-Executive Director remuneration 
The remuneration of NEDs for the year ended 30 June 2023 and 30 June 2022 is detailed below.

US$

Dr A Forrest AO

M Barnaba AM

Dr J Baderschneider

P Bingham-Hall

Lord S Coe CH, KBE

E Gaines¹

J Morris OAM

Li Yifei

Dr C Zhiqiang²

Dr Y Zhang

Base  
fees

Committee  
fees

Other 
benefits

Superannuation

Total 

FY23

FY22

FY23

FY22

FY23

FY22

FY23

FY22

FY23

FY22

FY23

FY22

FY23

FY22

FY23

FY22

FY23

FY22

FY23

FY22

– 

– 

833,642 

788,563

154,940 

147,138

140,831 

133,247

154,940

147,138

126,310 

–

141,829 

133,385

172,945 

–

–

96,890

 64,558 

147,138

– 

– 

–

–

144,161 

133,692

 44,086 

34,927

–

–

–

–

–

–

–

–

–

–

–

–

 32,950 

 535,441 

–

58,582 

52,543

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

– 

– 

18,525 

19,964

–

–

 18,525 

17,578

–

–

 15,438 

–

18,525 

19,296

–   

–

–

–

–   

–

– 

– 

852,167 

808,527

299,101 

280,830

203,442

185,752

154,940 

147,138

 710,139 

–

218,936 

205,224

172,945 

–

–

96,890

 64,558 

147,138

Remuneration values have been translated from Australian dollars to US dollars using an average exchange rate of 0.72595 for FY22 and 0. 0.67365 for FY23.

Base  
fees

Committee  
fees

Other 
benefits

Superannuation

Total 

A$

Dr A Forrest AO

M Barnaba AM

Dr J Baderschneider

P Bingham-Hall

Lord S Coe CH, KBE

E Gaines¹

J Morris OAM

Li Yifei

Dr C Zhiqiang²

Dr Y Zhang

FY23

FY22

FY23

FY22

FY23

FY22

FY23

FY22

FY23

FY22

FY23

FY22

FY23

FY22

FY23

FY22

FY23

FY22

FY23

FY22

– 

– 

1,237,500

1,086,250

– 

– 

–

–

230,000

214,000

184,162

65,444

48,112

–

–

202,683

209,056

183,548

230,000

202,683

187,501

– 

210,538

183,738

256,728

–

–

133,467

95,833

202,683

–

–

–

–

–

–

–

– 

–

–

– 

– 

27,500

27,500

–

–

27,500

24,214

–

–

– 

– 

1,265,000

1,113,750

444,000

386,845

302,000

255,874

230,000

202,683

48,913

794,836

22,917

1,054,167

–

86,962

72,378

–

–

–

–

–

–

–   

–

–

–

–

–

–

–

–

–

27,500

26,581

–

–

–

–

–

–

 –   

325,000

282,697

256,728

 –   

 –   

133,467

95,833

202,683

¹  Elizabeth Gaines commenced as a Non-Executive Director on 1 September 2022. The values in the above table for FY23 reflect remuneration from that date. 

Elizabeth transitioned to an Executive Director role effective July 2023.

²  Dr Cao Zhiqiang resigned on 25 February 2022.

FORTESCUE  FY23 ANNUAL REPORT    |    105

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c.  Details of performance grants to Executive Directors
There were no performance rights granted to Executive Directors in FY23. 

d.  Details of share-based payments relating to LTIP
The following table provides details of the number of share rights granted under the LTIP during the financial years ended 
30 June 2021 to 30 June 2023. The value of the rights has been determined using the grant date fair value.

l

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US$

A$

US$

A$

E Gaines¹

FY21

11/11/2020

FY22

9/11/2021

1/7/20 to 
30/6/23

1/7/21 to 
30/6/2024

212,072

7.55 10.34 1,601,639 2,192,824

100%

69.7% 147,920

64,152

132,338

6.23

8.42 824,466

1,114,286                Determined 2024

80,874

FY23

F Hick

FY21

FY22

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

FY23

3/04/2023

1/7/22 to 
30/6/2025

143,452

8.76

12.91 1,256,640 1,851,965

 M Hutchinson

FY21

FY22

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

Determined in 2025

–

–

–

–

FY23

7/12/2022

1/7/22 to 
30/6/2025

D Otranto

176,814

7.80

11.59 1,379,149 2,049,274

Determined in 2025

FY21

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

FY22

22/11/2021

FY23

7/12/2022

J Shuttleworth²

FY21

18/11/2020

FY22

23/05/2022

FY23

7/12/2022

I Wells³

FY21

11/11/2020

FY22

22/11/2021

FY23

7/12/2022

1/7/21 to 
30/6/2024

1/7/22 to 
30/6/2025

1/7/20 to 
30/6/23

1/7/21 to 
30/6/2024

1/7/22 to 
30/6/2025

1/7/20 to 
30/6/23

1/7/21 to 
30/6/2024

1/7/22 to 
30/6/2025

48,602

6.76

9.28 328,550

451,027

Determined in 2024

75,883

8.03

11.93 609,340

905,284

Determined in 2025

72,812

7.55 10.34

549,901

752,876

100%

96.6% 70,319

2,493

45,437

8.95 12.70

406,661

577,050

Determined in 2024

65,028

7.80

11.59

507,218

753,675

Determined in 2025

74,225

7.55 10.34

560,572

767,487

46,319

6.76

9.28

313,116

429,840

66,278

8.03

11.93

532,212

790,697

–

–

–

–

–

–

– 74,225

– 46,319

– 66,278

¹  Elizabeth Gaines remains eligible to participate in the FY21 and FY22 LTIP on a pro-rata basis. The vesting outcome of 69.7% reflects the lapsing of a  

pro-rata proportion of rights on cessation of employment and application of the LTIP Maximum Value Limit.

²  Julie Shuttleworth ceased to be KMP effective 4 August 2022. The values shown above are the full grants and have not been pro-rated to reflect actual  

time served as KMP. Julie is no longer in a role classified as KMP. 

³ Ian Wells did not remain eligible to participate in any outstanding LTIP grants and as such all unvested performance rights lapsed.

FORTESCUE  FY23 ANNUAL REPORT    |    106

Directors' report 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
e.  KMP share rights
Share rights granted under the ESSIP at the beginning of FY23 (granted at the VWAP for Fortescue shares traded over 
the first five trading days of the performance year) based on the participants election of performance rights (ranging 
from a minimum of 50 per cent up to a maximum of 100 per cent). Share rights granted under the LTIP at the beginning of 
FY21 which vested in FY23 are shown below. The ultimate value of these share rights to the Executives will reflect either 
an improvement or decline in the Company’s share price over the performance period. The adoption of this approach 
is specifically to ensure that awards made to Executives have a value which reflects sustainable value of shareholder’s 
investment in the Company. The last column details the actual number of share rights that vested on actual performance.

FY21 LTIP and FY23 ESSIP share rights movement

Executive

E Gaines 
FY23 ESSIP
FY21 LTIP

F Hick
FY23 ESSIP
FY21 LTIP

M Hutchinson
FY23 ESSIP
FY21 LTIP

D Otranto
FY23 ESSIP
FY21 LTIP

J Shuttleworth
FY23 ESSIP
FY21 LTIP

I Wells
FY23 ESSIP
FY21 LTIP

Share  
rights granted

Share  
rights lapsed

Share  
rights forfeited

Share  
rights vested

                – 
212,072  

46,853 
                 – 

66,305  
                 – 

56,912 
                 – 

                 – 
64,152 

5,353
                 – 

9,946
                 – 

6,503
                 – 

                 – 
            72,812  

                 – 
            2,493 

24,854  
74,225 

24,854  
74,225 

–
–

–
–

–
–

–
–

–
–

–
–

                 – 
147,920

41,500
                 – 

   56,359 
                 – 

50,409 
                 – 

                 – 
70,319

                   –  
                 – 

Share rights movement in FY23

Non-Executive Directors do not participate in Fortescue’s incentive plans and do not hold unvested share rights. The movement 
during the reporting period in the number of options and share rights over ordinary shares in the Company held directly, 
indirectly or beneficially, by each of the KMP, including their related parties is as follows:

Balance 
at the 
start of 
the year Granted

FY23

Executive Director

Exercised / 
converted

Forfeited 
/ lapsed

Other¹

E Gaines

696,022

–

(286,654)

(204,741)

Other Key Management Personnel of Fortescue

F Hick

M Hutchinson

–

–

190,305

243,119

–

–

–

–

D Otranto

63,514

132,795

(12,626)

(2,286)

–

–

–

–

J Shuttleworth

261,151

–

(118,068)

(24,834)

(118,249)

I Wells

264,107

91,132

(117,794)

(237,445)

–

¹ Negative amounts reflect the number held at the date of ceasing to be a KMP.

Balance 
at the 
end of 
the year

204,627

190,305

243,119

181,397

–

–

Vested Unvested

Not 
exercisable

–

–

–

–

–

–

204,627

204,627

190,305

190,305

243,119

181,397

243,119

181,397

–

–

–

–

FORTESCUE  FY23 ANNUAL REPORT    |    107

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f.  KMP shareholdings
The numbers of shares in the Company held during the financial year by each Director and KMP, including their related 
parties, are set out below:

FY23

Held at  
1 July 2022

Received on 
conversion  
of rights

Issued Purchases 

Sales

Transfers

Other¹  

Held at  
30 June 2023

Non-executive Directors of Fortescue

M Barnaba AM

40,300

Dr J Baderschneider

138,000

P Bingham-Hall

Lord S Coe CH, KBE

J Morris OAM

Li Yifei

E Gaines

56,038 

 –

18,943 

–

341,294 

286,654

Dr Y Zhang

12,000 

Executive Chairman

Dr A Forrest AO

1,131,365,000

Other Key Management Personnel of Fortescue

F Hick

M Hutchinson

I Wells

D Otranto

J Shuttleworth

–

–

774,961

128

951,212

117,794

12,626

118,068

–

–

–   

–   

–   

–   

–   

–

–   

–

–

–

–   

–   

–   

–   

–   

–   

–

–   

–

–   

 –   

–

–

–

3,823

5,000

2,233

–

–

–

–   

–   

–   

–   

– (286,654)

 –   

–

–   

114

–   

–

–   

–   

–   

(117,794)

 250 

(12,626)

–

–

–

–

–   

–   

– 

–   

–   

–

–   

–

–

–

–

–   

(21,176)

–   

–      

40,300

138,000

59,861 

 5,000 

–  

–

341,294 

(12,000)

          –   

–   

1,131,365,000

–   

19,000

(774,961)

–      

–

19,114

–

378 

–

23 

–

 –  

(1,069,303)

¹ Negative amounts reflect the number held at the date of ceasing to be a KMP.

FORTESCUE  FY23 ANNUAL REPORT    |    108

Directors' reportFINANCIAL 
REPORT
2023

08

Fortescue is working 
to establish the 
building blocks of a 
new global renewable 
energy value chain

CONSOLIDATED INCOME STATEMENT 
For the year ended 30 June 2023

Operating sales revenue

Cost of sales

Gross profit

Other income

Other expenses

Operating profit

Finance income

Finance expenses

Note

3

5

4

6

7

7

Share of (loss) / profit from equity accounted investments

23(c)

Profit before tax

Income tax expense

Net profit after tax

Net profit is attributable to:

Equity holders of the Company

Non-controlling interest

Net profit after tax

14(a)

2023
US$m

16,871

(7,817)

9,054

53

(2,087)

7,020

149

(275)

(8)

6,886

(2,090)

4,796

4,798

(2)

4,796

2022
US$m

17,390

(7,649)

9,741

11

(752)

9,000

14

(174)

6

8,846

(2,649)

6,197

6,197

–

6,197

Earnings per share attributable to the ordinary equity holders 
of the Company:

Basic earnings per share

Diluted earnings per share

8

8

156.0

155.7

201.4

201.0

Note

Cents

Cents

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME  
For the year ended 30 June 2023

Net profit after tax

Other comprehensive income:

Items that may be reclassified to profit or loss in subsequent periods,  
net of tax:

Exchange differences on translation of foreign operations

Items that will not be reclassified to profit or loss in subsequent periods,  
net of tax:

Gain/(loss) on investments taken to equity

Other comprehensive income, net of tax

Total comprehensive income for the period, net of tax

Total comprehensive income for the period attributable to:

Equity holders of the Company

Non-controlling interest

Total comprehensive income for the period, net of tax

2023 
US$m

4,796

52

4

56

4,852

4,854

(2)

4,852

2022 
US$m

6,197

21

(2)

19

6,216

6,216

–

6,216

The above consolidated income statement and consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

FORTESCUE  FY23 ANNUAL REPORT    |    110

Financial report 
 
 
CONSOLIDATED STATEMENT OF FINANCIAL POSITION   
At 30 June 2023

ASSETS

Current assets

Cash and cash equivalents

Trade and other receivables

Inventories

Other current assets

Total current assets

Non-current assets

Trade and other receivables

Inventories

Property, plant and equipment

Intangible assets

Investments accounted for using the equity method

Financial assets at fair value through other comprehensive income

Other non-current assets

Total non-current assets

Total assets

LIABILITIES

Current liabilities

Trade and other payables

Borrowings and lease liabilities

Provisions

Deferred income

Current tax payable

Total current liabilities

Non-current liabilities

Borrowings and lease liabilities

Provisions

Deferred income

Deferred tax liabilities

Total non-current liabilities

Total liabilities

Net assets

EQUITY

Contributed equity

Reserves

Retained earnings

Equity attributable to equity holders of the Company

Non-controlling interest

Total equity

Note

9(b)

10(a)

10(c) 

10(c)

12(a)

12(b)

23(c)

10(b) 

9(a)

13

10(d)

14(c) 

9(a)

13

10(d)

14(d)

9(d)

2023 
US$m

4,287

520

1,189

89

6,085

16

458

20,974

299

260

77

49

22,133

28,218

1,482

165

445

71

304

2,467

5,156

1,063

28

1,506

7,753

10,220

17,998

1,044

170

16,775

17,989

9

17,998

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

FORTESCUE  FY23 ANNUAL REPORT    |    111

2022 
US$m

5,224

468

1,084

123

6,899

24

469

20,650

257

70

–

6

21,476

28,375

1,484

173

396

80

284

2,417

5,930

889

21

1,773

8,613

11,030

17,345

1,053

109

16,175

17,337

8

17,345

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CONSOLIDATED STATEMENT OF CASH FLOWS  
For the year ended 30 June 2023

Note

Cash flows from operating activities

Cash receipts from customers

Payments to suppliers and employees

Cash generated from operations

Interest received

Interest paid

Income tax paid

Net cash inflow from operating activities

9(c)

Cash flows from investing activities

Payments for property, plant and equipment - Fortescue

Payments for property, plant and equipment - joint operations

Proceeds from disposal of plant and equipment

Receipt of settlement (2022: acquisition) of subsidiary  
purchase consideration

22

Receipt of contributions from non-controlling interest 

Payments for acquisition of equity accounted investments

Purchase of financial assets

Net cash outflow from investing activities

Cash flows from financing activities

Proceeds from borrowings

Repayment of borrowings 

Repayment of lease liabilities

Finance costs paid

Dividends paid

Purchase of shares by employee share trust

Net cash outflow from financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents at the beginning of the period

Effects of exchange rate changes on cash and cash equivalents

Cash and cash equivalents at the end of the period

9(b)

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

2023 
US$m

16,849

(6,833)

10,016

144

(349)

(2,379)

7,432

(1,959)

(942)

51

4

11

(221)

(59)

(3,115)

–

(760)

(138)

(30)

(3,922)

(151)

(5,001)

(684)

5,224

(253)

4,287

2022 
US$m

17,603

(7,088)

10,515

12

(214)

(3,667)

6,646

(2,005)

(798)

4

(210)

–

(49)

(12)

(3,070)

1,900

–

(134)

(28)

(6,699)

(138)

(5,099)

(1,523)

6,930

(183)

5,224

FORTESCUE  FY23 ANNUAL REPORT    |    112

Financial report 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY  
For the year ended 30 June 2023

Attributable to equity holders of the Company

Reserves 
US$m

Retained 
earnings 
US$m

Balance at 1 July 2021

Net profit after tax

Other comprehensive income

Total comprehensive income for the period, net of tax

Transactions with owners:

Purchase of shares under employee share plans

Employee share awards vested

Equity settled share-based payment transactions

Dividends declared

Other

Contributed  
equity 
US$m

1,105

–

–

–

(137)

85

–

–

–

46

–

19

19

–

(85)

128

–

1

Total
US$m

17,727

6,197

19

16,576

6,197

–

6,197

6,216

–

–

–

(137)

–

128

(6,596)

(6,596)

(2)

(1)

Balance at 30 June 2022

1,053

109

16,175

17,337

Balance at 1 July 2022

Net profit after tax

Other comprehensive income

Total comprehensive income for the period, net of tax

Transactions with owners:

Purchase of shares under employee share plans

Employee share awards vested

Equity settled share-based payment transactions

Acquisition of non-controlling interest

Contributions from non-controlling interests

Dividends declared

Other

Balance at 30 June 2023

1,053

109

16,175

17,337

–

–

–

(151)

142

–

–

–

–

–

1,044

–

56

56

–

(142)

148

–

–

–

(1)

170

4,798

4,798

–

56

4,798

4,854

–

–

–

–

–

(151)

–

148

–

–

(4,199)

(4,199)

1

–

16,775

17,989

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes. 

Non- 
controlling 
interest 
US$m

8

–

–

–

–

–

–

–

–

8

8

(2)

–

(2)

–

–

–

(8)

11

–

–

9

Total 
equity 
US$m

17,735

6,197

19

6,216

(137)

–

128

(6,596)

(1)

17,345

17,345

4,796

56

4,852

(151)

–

148

(8)

11

(4,199)

–

17,998

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FORTESCUE  FY23 ANNUAL REPORT    |    113

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOTES TO THE CONSOLIDATED  
FINANCIAL STATEMENTS 

FOR THE YEAR ENDED 30 JUNE 2023

Basis of preparation

01   Basis of preparation 

Financial performance  
02  Segment information 

03  Operating sales revenue  

04  Other income 

05  Cost of sales 

06  Other expenses 

07  Finance income and finance expenses 

08  Earnings per share 

Capital management
09  Capital management 

9(a)  Borrowings and lease liabilities 

9(b)  Cash and cash equivalents 

9(c)  Cash flow information 

9(d)  Contributed equity 

9(e)  Dividends 

10  Working capital 

10(a)  Trade and other receivables 

10(b)  Trade and other payables 

10(c)  Inventories 

10(d)  Deferred income 

11  Financial risk management 

11(a)  Market risk 

11(b)  Credit risk 
11(c)   Liquidity risk 

11(d)  Fair values 

115

116

118

118

118

119

119

119

120

121

123

123

124

125

125 
125

126

126

127

127

127

129 
130

131

Key balance sheet items 
12  Property, plant and equipment and  

intangible assets 

12(a) Property, plant and equipment 

12(b) Intangible assests 

13  Provisions 

Taxation
14 

 Taxation 

14(a)  Income tax expense 

14(b)   Prima facie income tax expense  

reconciliation 

14(c)    Reconciliation of income tax expense  

to current tax payable 

132

132

135

136

137

137

137

138

14(d)  Deferred tax assets and liabilities 
138 
14(e)  Unrecognised tax losses and tax credits  139

Unrecognised items
15  Commitments and contingencies 

16  Events occurring after the reporting period 

Other 
17  Related party transactions 

18  Share-based payments 

19  Remuneration of auditors 

20  Deed of cross guarantee 

21  Parent entity financial information 

22  Business combination 

23  Interests in other entities 

24  Summary of significant accounting policies 

140

140

141

142

144

145

146

147

148

150

25  Critical accounting estimates and judgements  163

FORTESCUE  FY23 ANNUAL REPORT    |    114

Financial report 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements   
For the year ended 30 June 2023

BASIS OF PREPARATION

01  Basis of preparation

The financial statements cover the consolidated group 
comprising Fortescue Metals Group Ltd (the Company) 
and its subsidiaries, together referred to as Fortescue or 
the Group. The Company is a for-profit company limited 
by shares and incorporated in Australia, whose shares are 
publicly traded on the Australian Stock Exchange. 

These general purpose financial statements have been 
prepared in accordance with Australian Accounting 
Standards, other authoritative pronouncements of the 
Australian Accounting Standards Board (AASB), including 
Australian Interpretations, and the Corporations Act 2001. 

(a) Compliance with IFRS 

The financial statements of the Group also comply with 
International Financial Reporting Standards (IFRS) as issued 
by the International Accounting Standards Board. 

(b) Historical cost convention 

The financial statements have been prepared under the 
historical cost convention, except for certain financial 
instruments, which have been measured at fair value. 

(c) Functional and presentation currency 

The financial statements are presented in United States 
dollars, which is the Group’s reporting currency and the 
functional currency of the Company and the majority of its 
significant subsidiaries. 

(d) Critical accounting estimates 

The preparation of financial statements requires 
management to use estimates, judgements and 
assumptions. Application of different assumptions and 
estimates may have a significant impact on Fortescue’s net 
assets and financial results. Estimates and assumptions are 
reviewed on an ongoing basis and are based on the latest 
available information at each reporting date. Actual results 
may differ from the estimates. 

The areas involving a higher degree of judgement and 
complexity, or areas where assumptions are significant to 
the financial statements are: 

•  Iron ore reserve estimates 

•   Exploration and evaluation expenditure - recoverable 

amount

•   Development expenditure - recoverable amount 

•   Property, plant and equipment - recoverable amount 

•   Rehabilitation estimates 

•   Revenue

•   Joint arrangements

•   Fair value measurement of financial assets.

The accounting estimates and judgements applied to these 
areas are disclosed in note 25. 

(e) Rounding of amounts 

All amounts in the financial statements have been rounded 
to the nearest million dollars, except as indicated, in 
accordance with the ASIC Corporations Instrument 2016/191.

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FORTESCUE  FY23 ANNUAL REPORT    |    115

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements   
For the year ended 30 June 2023

FINANCIAL PERFORMANCE

02 Segment information

Fortescue’s chief operating decision-makers are identified 
as the Chief Executive Officer of Fortescue Metals and 
the Chief Executive Officer of Fortescue Energy, and its 
segments are identified based on the internal reports that 
are reviewed and used by the Chief Executive Officers in 
assessing performance and determining the allocation of 
resources. The following operating segments have been 
identified: 

•   Metals: Exploration, development, production, 

processing, sale and transportation of iron ore, and the 
exploration for other minerals.

•   Energy: Undertaking activities in the global development 
of green electricity, green hydrogen and green ammonia 
projects. FFI is included within the Energy segment.

The scope of the operating segments has been modified 
following the changes in management responsibilities in 
2023. Energy segment now includes WAE Technologies Ltd 
(Fortescue WAE, formerly Williams Advanced Engineering 
Ltd) which was previously included in the Metals segment. 
Accordingly, the comparative period 30 June 2022 in (a) 
and (b) below has been restated to reflect the change in 
segment structure. 

Corporate includes cash, debt and tax balances which are 
managed at a Group level, together with other corporate 
activities. Corporate is not considered to be an operating 
segment and includes activities that are not allocated to 
other operating segments.

Transfer prices between segments are set on an arm’s 
length basis in a manner similar to transactions with third 
parties. Where segment revenue, expenses and results 
include transfers between segments, those transfers 
are eliminated on consolidation and are not considered 
material.

(a) Underlying EBITDA

Fortescue uses underlying EBITDA defined as earnings 
before interest, tax, depreciation and amortisation, 
exploration, development and other expenses, and 
impairment expense, as a key measure of its financial 
performance. The reconciliation of underlying EBITDA to 
the net profit after tax is presented below. The segment 
information is prepared in conformity with the Group’s 
accounting policies.

Metals

Energy

Corporate

Consolidated

Note

2023 
US$m

2022 
US$m

2023 
US$m

2022 
US$m

2023 
US$m

2022 
US$m

2023 
US$m

2022 
US$m

Revenue from external customers

3

16,764

17,364

107

26

–

–

16,871

17,390

Underlying EBITDA

10,545

11,158

(617)

(396)

35

(201)

9,963

10,561

Depreciation and amortisation

5, 6

Finance income

Finance expense

Exploration, development and 
other

Impairment expense

7

7

6

6

Income tax expense

14(a)

Net profit after tax

(1,744)

(1,528)

149

14

(275)

(174)

(170)

(27)

(1,037)

–

(2,090)

(2,649)

4,796

6,197

FORTESCUE  FY23 ANNUAL REPORT    |    116

Financial reportNotes to the consolidated financial statements  
For the year ended 30 June 2023

FINANCIAL PERFORMANCE

02 Segment information (continued)

(b) Segment assets and liabilities

Metals

Energy

Corporate

Consolidated

2023 
US$m

2022 
US$m

2023 
US$m

2022 
US$m

2023 
US$m

2022 
US$m

2023 
US$m

2022 
US$m

Segment assets

22,748

22,327

819

453

4,651

5,595

28,218

28,375

(c) Geographical information

Fortescue operates predominantly in the geographical location of Australia, and this is the location of the vast majority 
of the Group’s assets. In presenting information on the basis of geographical segments, segment revenue is based on the 
geographical location of customers. 

Revenues from external customers

China

Other

(d) Major customer information 

2023 
US$m

15,015

1,856

16,871

2022 
US$m

15,290

2,100

17,390

Revenue from the two largest customers amounted to US$1,793 million and US$1,206 million respectively (2022: US$1,807 
million and US$1,279 million), arising from the sale of iron ore and the related shipment of product.

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FORTESCUE  FY23 ANNUAL REPORT    |    117

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements  
For the year ended 30 June 2023

FINANCIAL PERFORMANCE

03 Operating sales revenue

Iron ore revenue

Provisional pricing adjustments - iron ore

Total iron ore revenue1

Shipping revenue

Provisional pricing adjustments - shipping revenue

Total shipping revenue1

Manufacturing and engineering services revenue²

Other revenue³

Operating sales revenue

2023 
US$m

15,482

(164)

15,318

1,386

(30)

1,356

106

91

16,871

2022 
US$m

16,227

(834)

15,393

1,858

61

1,919

26

52

17,390

¹ Certain sales contracts are provisionally priced at the initial revenue recognition (bill of lading) date, with the final settlement price based on a pre-determined 
quotation period. Operating sales revenue from these contracts each comprise two parts: 

(i)   Iron ore revenue and shipping revenue recognised at the bill of lading date at current prices; and

(ii)  Provisional pricing adjustments which represent any difference between the revenue recognised at the bill of lading date and the final settlement price. 

Shipping revenue and the provisional pricing adjustments to shipping revenue are recognised over the period during which the shipping service has been 
provided. 

²Manufacturing and engineering services revenue are recognised on a percentage of completion basis.

³Other revenue includes towage services provided by Fortescue which is recognised as performed.

04 Other income

Net foreign exchange gain

Other

05 Cost of sales

Mining and processing costs

Rail costs

Port costs

Shipping costs

Government royalty

Depreciation and amortisation

Manufacturing and engineering services costs

Other operating expenses

2023 
US$m

48

5

53

2023 
US$m

2,856

266

251

1,455

1,124

1,708

76

81

7,817

2022 
US$m

–

11

11

2022 
US$m

2,539

243

219

1,976

1,130

1,474

20

48

7,649

Total employee benefits expense included in cost of sales, research expenditure and administration expenses is US$1,711 million 
(2022: US$1,433 million).

FORTESCUE  FY23 ANNUAL REPORT    |    118

Financial report 
 
 
 
Notes to the consolidated financial statements  
For the year ended 30 June 2023

FINANCIAL PERFORMANCE

06 Other expenses

Administration expenses

Research expenditure¹

Impairment expense²

Exploration, development and other

Depreciation and amortisation

Fair value change in financial instruments

Net foreign exchange loss

¹ Research expenditure comprises of FFI research expenditures. 

² Impairment expense relates to the impairment of the Iron Bridge CGU as described in note 12(a). 

07 Finance income and finance expenses

Finance income

Interest income

Finance expenses

Interest expense on borrowings and lease liabilities

Loss on early debt redemption

Other

08 Earnings per share

(a)  Earnings per share

Basic 

Diluted

(b)  Reconciliation of earnings used in calculating earnings per share

Net profit attributable to the ordinary equity holders of the Company used in 
calculating basic and diluted earnings per share

2023 
US$m

288

553

1,037

170

36

3

–

2,087

2022 
US$m

204

354

–

27

54

10

103

752

2023 
US$m

2022 
US$m

149

149

228

2

45

275

2023 
cents

156.0

155.7

US$m

4,798

14

14

150

–

24

174

2022 
cents

201.4

201.0

US$m

6,197

(c)  Weighted average number of shares used as denominator

Number

Number

Weighted average number of ordinary shares used as the denominator in 
calculating basic earnings per share

3,075,997,351

3,076,669,539

Adjustments for calculation of diluted earnings per share:  

Potential ordinary shares

Weighted average number of ordinary and potential ordinary shares used as 
the denominator in calculating diluted earnings per share

5,793,933

6,284,729

3,081,791,284

3,082,954,268

(d) Information on the classification of securities 

Share rights granted to employees under the Fortescue incentive plan are considered to be potential ordinary shares and have 
been included in the determination of diluted earnings per share to the extent to which they are dilutive. Details relating to the 
share rights are set out in note 18.

FORTESCUE  FY23 ANNUAL REPORT    |    119

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Notes to the consolidated financial statements  
For the year ended 30 June 2023

CAPITAL MANAGEMENT

09 Capital management

Fortescue’s capital management policy supports its strategic objectives and provides a framework to maintain a strong 
capital structure to deliver consistent returns to its shareholders as well as invest in future developments and expansion of 
the business. 

Fortescue’s capital includes total equity and net debt. Net debt is defined as borrowings and lease liabilities less cash and 
cash equivalents.

Borrowings

Lease liabilities

Cash and cash equivalents

Net debt

Equity attributable to equity holders of the Company

Non-controlling interest

Total equity

Capital management involves a continuous process of: 

Note

9(a)

9(a)

9(b)

2023 
US$m

4,587

734

(4,287)

1,034

17,989

9

17,998

2022 
US$m

5,348

755

(5,224)

879

17,337

8

17,345

• Evaluating capital requirements against the risks arising from Fortescue’s activities and its operating environment 

• Raising, refinancing and repaying debt 

• Development, maintenance and implementation of the dividend policy. 

Fortescue has developed target ranges for a number of financial indicators. These indicators include gearing, net gearing, 
debt to underlying EBITDA and interest coverage ratio, and are monitored together with a number of other financial and 
non-financial indicators. Target ranges for the financial ratios may vary upon the investment and commodity cycles. During 
periods of intensive investment, for example expansion programs or a commodity downturn, the capital management policy 
contemplates interim ratio levels returning to a targeted longer term level. Interim levels acknowledge and consider the 
requirements, in certain circumstances, for remedial actions to be taken. 

As per previous disclosures, Fortescue has a share buy-back program in place that is an important part of the capital 
management strategy. The program was put in place in 2018 and was extended in October 2020 for an unlimited duration. 

FORTESCUE  FY23 ANNUAL REPORT    |    120

Financial report 
 
 
Notes to the consolidated financial statements  
For the year ended 30 June 2023

CAPITAL MANAGEMENT

09 Capital management (continued)

(a) Borrowings and lease liabilities

Senior unsecured notes

Green senior unsecured notes

Syndicated term loan

Lease liabilities

Total current borrowings and lease liabilities

Senior unsecured notes

Green senior unsecured notes

Syndicated term loan

Lease liabilities

Total non-current borrowings and lease liabilities

Total borrowings and lease liabilities

2023 
US$m

36

14

9

106

165

2,774

788

966

628

5,156

5,321

2022 
US$m

41

15

10

107

173

3,519

787

976

648

5,930

6,103

(i)  Senior unsecured and green senior unsecured notes

In May 2023, Fortescue repaid its US$750 million 2024 senior unsecured notes from its cash on hand. 

As at 30 June 2023, the Company had the following senior unsecured notes on issue:

Date of issue

Date of maturity 

Non-call  
period

Face value 
US$m

Carrying value  
US$m

Coupon rate % Currency

September 2019

September 2027

8 years

March 2021

April 2022

April 2022

April 2031

April 2030

April 2032

10 years

8 years

10 years

600

1,500

700

800

3,600

605

1,503

702

802

3,612

4.500%

4.375%

5.875%

6.125%

USD

USD

USD

USD

Fortescue’s listed debt instruments are classified as level 1 financial instruments in the fair value hierarchy with their fair values 
based on quoted market prices at the end of the reporting period. Refer to note 11(d).

(ii)  Syndicated term loan

The syndicated term loan matures in June 2026, and as at 30 June 2023 had a carrying value of US$975 million (30 June 2022: 
US$986 million) with a coupon rate linked to Secured Overnight Financing Rate (SOFR) plus a fixed margin. The reference rate 
was amended from LIBOR to SOFR on 5 October 2022; other repayment terms remain unchanged. The facility has principal 
repayment of 1 per cent per annum with early repayment of the facility at Fortescue’s option without penalty.

An additional syndicated term loan facility was executed in December 2022 to the value of US$500 million, being available to 
draw until December 2023. If drawn, interest would accrue based on a variable rate linked to SOFR plus a fixed margin, with the 
principal due at maturity date of June 2027. This syndicated term loan facility was undrawn as at 30 June 2023.

FORTESCUE  FY23 ANNUAL REPORT    |    121

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Notes to the consolidated financial statements  
For the year ended 30 June 2023

CAPITAL MANAGEMENT

09 Capital management (continued)

(a) Borrowings and lease liabilities (continued)

(iii) Revolving credit facility

The revolving credit facility has a maturity date on 28 July 2025, until which date, the US$1,025 million facility remains 
undrawn at 30 June 2023 and 30 June 2022. On 5 October 2022, the Company completed a single amendment to the 
facility’s reference rate, other repayment terms remained unchanged. The revolving credit facility was indexed to LIBOR and 
under the amendment, the reference rate changed to SOFR. If drawn, interest accrues based on a variable rate linked to 
SOFR plus a fixed margin and is payable at the end of the interest period selected (either one, two, three or six months), with 
the principal due at maturity.

(iv)  Lease liabilities 

The Group enters into contractual arrangements for the leases of mining equipment, vehicles, buildings and other assets. 
Typically, the duration of these contracts is for periods of between 2 and 5 years, some of which include extension options 
and are recognised within lease liabilities. 

2023 
US$m

2022 
US$m

Expense relating to short-term leases 

Expense relating to leases of low-value assets that are not shown above as short-term 
leases 

Expense relating to variable lease payments not included in the measurement of lease 
liabilities

Future cash flows from leases not yet commenced

176

4

133

58

(v)  Summary of movements in borrowings and lease liabilities

Senior 
unsecured 
notes 
US$m

Green senior
unsecured 
notes
US$m

Syndicated 
term loan 
US$m

Lease  
liabilities 
US$m

Balance at 1 July 2021

Additions

Interest expense

Payments

Transaction costs

Foreign exchange gain

Balance at 30 June 2022

Additions

Interest expense

Payments

Transaction costs

Foreign exchange gain

2,855

700

144

(132)

(7)

–

3,560

–

173

(925)

2

–

Balance at 30 June 2023

2,810

–

800

11

–

(9)

–

802

–

50

(50)

–

–

802

587

400

22

(22)

(1)

–

986

–

59

(66)

(4)

–

975

810

141

50

(206)

–

(40)

755

139

58

(201)

–

(17)

734

195

2

101

61

Total 
US$m

4,252

2,041

227

(360)

(17)

(40)

6,103

139

340

(1,242)

(2)

(17)

5,321

Information about Fortescue’s exposure to interest rate risk and foreign exchange rate risk is disclosed in note 11. 

FORTESCUE  FY23 ANNUAL REPORT    |    122

Financial report 
Notes to the consolidated financial statements  
For the year ended 30 June 2023

CAPITAL MANAGEMENT

09 Capital management (continued)

(b) Cash and cash equivalents

Cash at bank

Short term deposits

2023 
US$m

2,693

1,594

4,287

Cash and cash equivalents do not have any restrictions by contractual or legal arrangements.

(c) Cash flow information 

Reconciliation of net profit after tax to net cash inflow from operating activities

Net profit after tax 

Depreciation and amortisation 

Impairment expense

Exploration, development and other 

Share-based payment expense 

Net unrealised foreign exchange loss 

Rehabilitation expenditure 

Depreciation in inventory 

Equity accounted investments

Other non-cash items 

Working capital adjustments: 

Decrease in payables

(Increase) / decrease in receivables 

Increase in inventories 

Increase in other assets 

(Decrease) / increase in deferred income 

Increase in provisions 

Decrease in income taxes payable 

(Decrease) / increase in deferred tax liabilities 

Net cash inflow from operating activities 

2023 
US$m

4,796

1,744

1,037

170

148

6

(22)

31

15

(103)

(1)

(60)

(94)

(18)

(2)

72

(20)

(267)

7,432

2022 
US$m

2,636

2,588

5,224

2022 
US$m

6,197

1,528

–

27

128

248

(8)

97

(16)

(135)

(407)

277

(330)

(4)

13

49

(1,076)

58

6,646

FORTESCUE  FY23 ANNUAL REPORT    |    123

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Notes to the consolidated financial statements  
For the year ended 30 June 2023

CAPITAL MANAGEMENT

09 Capital management (continued)

(d) Contributed equity

(i) Share capital

Issued  
shares

Treasury  
shares

Contributed 
equity

Issued  
shares

Treasury  
shares

Contributed 
equity

Number

Number

Number

US$m

US$m

US$m

At 1 July 2021

3,078,964,918

(1,660,510)

3,077,304,408

1,195

Purchase of shares under 
employee share plans

Employee share awards 
vested

–

–

(10,861,898)

(10,861,898)

10,097,122

10,097,122

–

–

At 30 June 2022

3,078,964,918

(2,425,286)

3,076,539,632

1,195

Purchase of shares under 
employee share plans

Employee share awards 
vested

–

–

(12,941,756)

(12,941,756)

12,288,513

12,288,513

–

–

At 30 June 2023

3,078,964,918

(3,078,529)

3,075,886,389

1,195

(90)

(137)

85

(142)

(151)

142

(151)

1,105

(137)

85

1,053

(151)

142

1,044

(ii) Issued shares 

Issued shares are fully paid and entitle the holders to one vote per share and the rights to participate in dividends. Ordinary 
shares participate in the proceeds on winding up of the Company in proportion to the number of shares held. 

(iii) Treasury shares 

Movements in treasury shares represent acquisition of the Company’s shares on market and allocation of shares to the 
Company’s employees from the vesting of awards and exercise of rights under the employee share-based payment plans.

(iv) Share buy-back program

During the period, the Company acquired none of its own shares on market under the share buy-back program, which was 
extended on 10 October 2020 for an unlimited duration. The maximum number of shares which can be bought back is 
determined periodically by the Company’s 10/12 limit, being that a company cannot buy back more than 10 per cent of its 
voting shares within the span of any 12-month period.

FORTESCUE  FY23 ANNUAL REPORT    |    124

Financial reportNotes to the consolidated financial statements  
For the year ended 30 June 2023

CAPITAL MANAGEMENT

09 Capital management (continued)

(e) Dividends

(i)  Dividends paid during the year

Final fully franked dividend for the year ended 30 June 2022: A$1.21 per share 
(30 June 2021: A$2.11 per share)

Interim fully franked dividend for the half-year ended 31 December 2022: 
A$0.75 per share (31 December 2021: A$0.86 per share)

(ii) Dividends declared and not recognised as a liability

Final fully franked dividend: A$1.00 per share (2022: A$1.21 per share)

(iii)  Franking credits

Franking credit account balance at the end of the financial year at 30% (2022: 
30%)

Franking credits that will arise from the payment of current tax payable as at 
the end of the year

2023 
US$m

2,591

1,608

4,199

2023 
US$m

1,975

2023 
A$m

6,183

431

Franking debits that will arise from the payment of the final dividend for the year

(1,320)

10  Working capital

(a)  Trade and other receivables

Trade debtors

GST receivables

Other receivables

Total current receivables

5,294

2023 
US$m

331

68

121

520

2022 
US$m

4,712

1,884

6,596

2022 
US$m

2,591

2022 
A$m

5,346

376

(1,597)

4,125

2022 
US$m

362

35

71

468

FORTESCUE  FY23 ANNUAL REPORT    |    125

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Notes to the consolidated financial statements  
For the year ended 30 June 2023

CAPITAL MANAGEMENT

10 Working capital (continued)

(a) Trade and other receivables (continued)

Iron ore trade receivables with embedded derivatives for provisional pricing are measured at fair value through profit or loss 
under AASB 9 Financial Instruments. The remaining trade and other receivables are recognised at amortised cost using the 
effective interest method, less an allowance for impairment.

The Group applies the expected credit loss model to all receivables not held at fair value through profit or loss. A provision 
for doubtful receivables is established based on the expected credit loss model and reviewed on an ongoing basis. Expected 
credit losses on trade and other receivables held at amortised cost are insignificant and no provision has been recognised at 
30 June 2023 (2022: nil).

The carrying value of the receivables approximates their fair value. Information about Fortescue’s exposure to foreign 
currency risk, interest rate risk and price risk pertaining to the trade and other receivables balances is disclosed in note 11. 

Disclosures relating to receivables from related parties are set out in note 17. 

(b) Trade and other payables

Trade payables

Royalty accrual

Other payables

Total current payables

(c) Inventories

Iron ore stockpiles

Warehouse stores, materials and work in progress 

Total current inventories

Iron ore stockpiles

Total non-current inventories

2023 
US$m

984

346

152

1,482

2023 
US$m

786

403

1,189

458

458

2022 
US$m

927

378

179

1,484

2022 
US$m

705

379

1,084

469

469

Iron ore stockpiles, warehouse stores, materials and work in progress are stated at cost. Inventories expensed through cost 
of sales, including depreciation, during the year ended 30 June 2023 amounted to US$5,157 million (2022: US$4,495 million). 
During the year, inventory write-offs of US$35 million (2022: US$15 million) were recognised in relation to specific items of 
warehouse stores and materials that were identified as obsolete.

FORTESCUE  FY23 ANNUAL REPORT    |    126

Financial reportNotes to the consolidated financial statements  
For the year ended 30 June 2023

CAPITAL MANAGEMENT

10 Working capital (continued)

(d) Deferred income

Deferred revenue - Iron ore sales

Deferred revenue - Manufacturing and engineering services

Total current deferred income

Deferred revenue - Infrastructure

Deferred income - Government grants

Total non-current deferred income

11 Financial risk management

2023 
US$m

2022 
US$m

61

10

71

21

7

28

55

25

80

21

–

21

Fortescue is exposed to a range of financial risks, including market risk, credit risk and liquidity risk. Fortescue has 
established a risk management framework that provides a structured approach to the identification and control of risks 
across the business, sets the appropriate risk tolerance levels and incorporates active management of financial risks. 
The risk management framework has been approved by the Board of Directors, through the Audit, Risk Management and 
Sustainability Committee. The day-to-day management responsibility for execution of the risk management framework has 
been delegated to the Metals CEO and Metals CFO. Periodically, the Metals CFO reports to the Audit, Risk Management and 
Sustainability Committee on risk management performance, including management of financial risks. 

The key elements of financial risk are further explained below.

(a) Market risk

Market risk arises from Fortescue’s exposure to commodity price risk and the use of interest bearing and foreign currency 
financial instruments. It is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of 
changes in iron ore (commodity price risk), interest rates (interest rate risk) or foreign exchange rates (foreign currency 
exchange risk).

(i) Commodity price risk

Fortescue is exposed to commodity price risk, as its iron ore sales are predominantly subject to prevailing market prices. 
Fortescue does not directly influence market prices of iron ore and manages the commodity price risk through a focus on 
improving its cash margins and strengthening its corporate balance sheet through refinancing and early debt repayments. 

The majority of Fortescue’s iron ore sales contracts are structured on a provisional pricing basis, with the final sales 
price determined using the iron ore price indices on or after the vessel’s arrival to the port at discharge. The estimated 
consideration in relation to the provisionally priced contracts is marked to market using the spot iron ore price at the end 
of each reporting period, with the impact of the iron ore price movements recorded as provisional pricing adjustments to 
revenue. At 30 June 2023, Fortescue had 2.6 million tonnes of iron ore sales (2022: 2.4 million tonnes) that remained subject 
to provisional pricing, with the final price to be determined in the following financial year.

A three per cent movement in the realised iron ore price on these provisionally priced sales would have an impact on the 
Group’s profit of US$6 million (2022: 10 per cent movement would have an impact on the Group’s profit of US$18 million), 
before the impact of taxation. This analysis assumes all other factors, including the foreign currency exchange rates, are held 
constant.

FORTESCUE  FY23 ANNUAL REPORT    |    127

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Notes to the consolidated financial statements  
For the year ended 30 June 2023

CAPITAL MANAGEMENT

11 Financial risk management (continued)

(a) Market risk (continued)

(ii) Interest rate risk

The Group’s interest rate risk arises from variable rates on the syndicated term loan, the revolving credit facility to the extent 
it is drawn, and the lease liabilities relating to the ore carriers. Changes in rates applicable to the short-term deposits forming 
part of cash and cash equivalents also give rise to interest rate risk.

Fortescue’s policy is to reduce interest rate risk over the cash flows on its long-term debt funding through the use of fixed rate 
instruments whenever appropriate. 

Fortescue’s variable rate financial assets and liabilities at the end of the financial year are summarised below:

Cash and cash equivalents

Syndicated term loan

Lease liabilities

Note

9(b)

9(a)

2023 
US$m

2,693

(975)

(294)

1,424

2022 
US$m

2,636

(986)

(320)

1,330

Management analyses the Group’s interest rate exposure on a regular basis by simulating various scenarios which take into 
consideration refinancing, renewal of existing positions, alternative financing options and hedging. 

A change of 50 basis points in interest rates in variable instruments would have an impact on the Group’s profit of  
US$7 million (2022: a change of 100 basis points would impact profit by US$13 million), before the impact of taxation.

This analysis assumes that all other factors remain constant, including foreign currency rates.

(iii) Foreign currency exchange risk 

Fortescue operates in Australia with a significant portion of its operating costs and capital expenditure incurred and paid in 
Australian dollars and, as such, is exposed to the movements in the Australian dollar exchange rate.

Fortescue’s risk management policy is to target specific levels at which to convert United States dollars to Australian dollars 
by entering into either spot or short-term forward exchange contracts or structured foreign currency option arrangements 
(i.e. collars) to fix a portion of the Group’s Australian dollar exposure to within a Board-approved range. The Group has not 
applied hedge accounting to any of these contracts during the year. 

FORTESCUE  FY23 ANNUAL REPORT    |    128

Financial report 
Notes to the consolidated financial statements  
For the year ended 30 June 2023

CAPITAL MANAGEMENT

11 Financial risk management (continued)

(a) Market risk (continued)

(iii) Foreign currency exchange risk (continued)

The carrying amounts of the financial assets and liabilities denominated in Australian dollars and Chinese Yuan (CNY) 
(expressed in US dollars), are set out below:

Financial assets

Cash and cash equivalents

Trade and other receivables

Other financial assets

Total financial assets

Financial liabilities

Borrowings and lease liabilities

Trade and other payables

Current tax payable

Total financial liabilities

AUD denominated

CNY denominated

2023 
US$m

2022 
US$m

2023 
US$m

2022 
US$m

945

201

72

1,218

392

891

304

1,587

1,506

83

10

1,599

390

858

284

1,532

436

–

–

436

–

13

–

13

218

–

–

218

–

71

–

71

A change of two per cent in the Australian dollar exchange rate would have a net impact on the Group’s profit of US$7 million 
(2022: a change of two per cent would have an impact of US$1 million), before the impact of taxation. A change of two per 
cent in the Chinese Yuan exchange rate would have a net impact on the Group’s profit of US$8 million (2022: a change of two 
per cent would have an impact of US$2 million), before the impact of taxation. This analysis assumes that all other variables, 
including interest rates and iron ore price, remain constant.

(b) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to 
Fortescue and is managed on a consolidated basis. Credit risk arises from cash and cash equivalents, deposits with banks, 
and financial institutions and receivables from customers. 

Contracts for iron ore sales allow for pricing mechanisms in which the price can be finalised over multiple periods. On this 
basis, the Group does not consider in the first instance that the ageing of receivables is an indicator of risk of default, rather 
an indication of the contractual terms and conditions agreed within the sales contract. 

The Group’s exposure to customer credit risk for trade receivables other than iron ore trade receivables is influenced mainly 
by the individual characteristics of each customer. Contracts for iron ore sales are completed under a Letter of Credit. New 
customers are analysed individually for creditworthiness, taking into account credit ratings where available, previous trading 
experience and other factors. In monitoring customer credit risk, customers are assessed individually by their debtor ageing 
profile. Monitoring of receivable balances on an ongoing basis minimises the exposure to bad debts. Historically, bad debt 
write-offs have been insignificant.

At 30 June 2023, the Group had US$2 million (2022: US$4 million) of trade receivables which have not been settled within the 
normal terms and conditions agreed with the customer. The Group applies a forward-looking expected credit loss model. To 
measure the expected credit losses, these trade receivables have been grouped based on shared credit risk characteristics. 
Fortescue allocates each group of trade receivables to a credit risk grade based on data that is determined to be predictive 
of the risk of loss including but not limited to external ratings and available press information about customers. Credit risk 
grades are defined using qualitative and quantitative factors that are indicative of the risk of default and are aligned to 
external credit rating definitions from agencies. The Group assesses expected credit losses by considering the risk of default 
modified for credit enhancements such as letters of credit obtained. On this basis the resulting expected credit loss on trade 
receivables is not material.

FORTESCUE  FY23 ANNUAL REPORT    |    129

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Notes to the consolidated financial statements  
For the year ended 30 June 2023

CAPITAL MANAGEMENT

11 Financial risk management (continued)

(b) Credit risk (continued)

Fortescue has not recognised any bad debt expense from trading counterparties in the years ended 30 June 2023 and 30 June 
2022. 

The exposure to the credit risk from cash and short-term deposits held in banks is managed by the Group’s treasury 
department and monitored by the Metals CFO. Fortescue minimises the credit risks by holding funds with a range of financial 
institutions with credit ratings approved by the Board.

(c) Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as and when they fall due. Fortescue 
manages liquidity risk by maintaining adequate cash reserves and banking facilities, by continuously monitoring actual and 
forecast cash flows and by matching the maturity profiles of its assets and liabilities. 

The table below analyses Fortescue’s financial liabilities into relevant maturity groupings based on the period to the contracted 
maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

30 June 2022

Trade and other payables

Borrowings 

Lease liabilities

     Lease expenditure 

commitments

    Effect of discounting

30 June 2023

Trade and other payables

Borrowings

Lease liabilities

     Lease expenditure 

commitments

    Effect of discounting

Less than  
6 months 
US$m 

6 to 12 
months 
US$m

1 to 2  
years 
US$m

2 to 5  
years 
US$m

Over  
5 years 
US$m

Total 
contractual 
cash flows 
US$m

Carrying 
amount 
US$m

1,768

144

58

82

(24)

1,970

1,786

146

59

89

(30)

1,991

–

134

57

78

(21)

191

–

136

56

84

(28)

192

–

1,014

142

204

(62)

–

1,581

152

243

(91)

–

4,247

346

501

(155)

1,768

7,120

1,108

1,108

–

1,768

5,348

755

1,156

1,733

4,593

9,996

7,871

–

265

98

149

(51)

–

2,167

203

320

(117)

–

3,475

318

477

(159)

1,786

6,189

1,119

1,119

–

1,786

4,587

734

363

2,370

3,793

9,094

7,107

Management monitors rolling forecasts of the Group’s cash and overall liquidity position on the basis of expected cash flows.

FORTESCUE  FY23 ANNUAL REPORT    |    130

Financial report 
  
 
 
 
 
 
 
 
Notes to the consolidated financial statements  
For the year ended 30 June 2023

CAPITAL MANAGEMENT

11 Financial risk management (continued)

(d) Fair values

The carrying amounts and estimated fair values of all the Group’s financial instruments recognised in the financial 
statements are materially the same, with the exception of Fortescue’s listed debt instruments. The senior unsecured notes 
are classified as level 1 financial instruments in the fair value hierarchy, with their fair values based on quoted market prices at 
the end of the financial year, as outlined below.

Senior unsecured notes

Green senior unsecured notes

2023

 2022

Carrying value

Fair value

Carrying value

Fair value

US$m

2,810

802

US$m

2,504

760

US$m

3,560

802

US$m

3,145

730

The Group enters into derivative financial instruments (foreign currency options and commodity swap contracts) with 
various counterparties, principally financial institutions with investment-grade credit ratings. It also recognises trade 
receivables in relation to its provisionally priced iron ore sales contracts at fair value. All derivatives and provisionally priced 
iron ore trade receivables are valued using valuation techniques which employ the use of market observable inputs, such 
as foreign exchange spot and forward rates, yield curves of the respective currencies, interest rate curves and forward rate 
curves of the underlying commodity. Accordingly, these instruments are classified as Level 2. Refer to note 10(a) for the fair 
value of provisionally priced iron ore trade receivables as at 30 June 2023.

For all fair value measurements and disclosures, the Group uses the following levels to categorise the method used: 

Level 1: the fair value is calculated using quoted prices in active markets for identical assets and liabilities. 

Level 2: the fair value is estimated using inputs other than quoted prices included within Level 1 that are observable for the 
asset or liability, either directly (as prices) or indirectly (derived from prices). 

Level 3: inputs for the asset or liability that are not based on observable market data.

For financial instruments that are carried at fair value on a recurring basis, the Group determines whether transfers have 
occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to 
the fair value measurement as a whole) at the end of each reporting period. There were no transfers between levels during 
the year.

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FORTESCUE  FY23 ANNUAL REPORT    |    131

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements  
For the year ended 30 June 2023

KEY BALANCE SHEET ITEMS

12 Property, plant and equipment and intangible assets

(a) Property, plant and equipment

Plant and
equipment
US$m

Land and 
buildings
US$m

Exploration 
and
evaluation
US$m

Assets
under
development
US$m

Development
US$m

Right of use assets

Plant and
equipment
US$m

Land and 
buildings
US$m

Total 
US$m

Net carrying value

At 1 July 2021

Transfers of assets

Additions

Disposals and write-offs

10,117

671

4

(6)

641

10

–

–

Depreciation

(1,115)

(67)

Changes in restoration and 
rehabilitation estimate¹

Other

At 30 June 2022

Cost 

Accumulated depreciation

Net carrying value

At 1 July 2022

Transfers of assets

Additions

Disposals and write-offs

–

–

–

–

9,671

584

19,052

1,199

(9,381)

(615)

9,671

1,662

11

(46)

584

85

1

–

Depreciation

(1,224)

(59)

Impairment expense

Changes in restoration and 
rehabilitation estimate¹

Other

–

–

–

–

–

–

At 30 June 2023

10,074

611

Cost net of impairment

20,679

1,285

Accumulated depreciation

(10,605)

(674)

653

(29)

139

(5)

–

–

–

758

758

–

758

(2)

159

(100)

–

–

–

–

815

815

–

3,214

(749)

2,696

(3)

–

–

(1)

5,157

5,157

3,823

43

–

(2)

837

–

121

(19)

102

19,387

–

20

–

(54)

2,980

(35)

(278)

(117)

(12)

(1,589)

(37)

(1)

3,548

5,668

–

–

822

1,285

–

–

110

137

(37)

(2)

20,650

33,256

–

(2,120)

(463)

(27)

(12,606)

5,157

3,548

822

(2,083)

2,831

–

-

(1,037)

–

8

4,876

4,876

–

267

–

–

–

85

–

110

–

56

–

(298)

(142)

(16)

–

171

(5)

–

–

–

3,683

6,101

(2,418)

765

1,370

(605)

–

–

–

150

193

(43)

20,650

(71)

3,143

(146)

(1,739)

(1,037)

171

3

20,974

35,319

(14,345)

¹  Refer to note 13(a) for movements in the restoration and rehabilitation provision.

Transfers of assets were made between the categories of property, plant and equipment, intangible assets, exploration and 
evaluation, development expenditure and right of use assets. 

During the year, geology work in Ecuador tenements was put on standby while commercial prioritisation of exploration  
projects take place. For the year ended 30 June 2023, management determined these tenements are no longer prospective  
and US$63 million was written-off for the exploration and evaluation assets.

FORTESCUE  FY23 ANNUAL REPORT    |    132

Financial reportNotes to the consolidated financial statements  
For the year ended 30 June 2023

KEY BALANCE SHEET ITEMS

12 Property, plant and equipment and intangible assets (continued)

(a) Property, plant and equipment (continued)

In accordance with the Accounting Standards and internal policies, the Group is required to assess at each reporting date 
whether there is any indication that its assets may be impaired. In considering impairment, assets are grouped together 
based on their capability of producing independent cash inflows and are referred to as Cash Generating Units (CGUs). 
Management has identified the Group has two CGUs; (i) Pilbara Operations comprising existing mining operations, inclusive 
of Port and Rail; and (ii) Fortescue’s assets attributable to it's share of the Iron Bridge Unincorporated Joint Venture (Iron 
Bridge CGU). The carrying amount of each CGU is compared to the CGU's recoverable amount with an impairment loss 
recognised for the amount by which an assets’ carrying amount exceeds its recoverable amount.

During the financial year, the cumulative effect of the events below occurred which management assessed as indicators of 
impairment in relation to the Iron Bridge CGU:

•  An increase in the forecast production costs reflecting a combination of inflationary pressures consistent with that 

experienced within the industry over the period;

•  Increase in discount rates reflecting the increase in the risk-free rate over the period; and

•  The extension of the project ramp up to name plate production volumes.

Accordingly, an impairment assessment was completed for the Iron Bridge CGU. In assessing impairment, the Group is 
required to determine the recoverable amount as the higher of the value in use, being the net present value of expected 
future cashflows of the CGU in its current condition, and the fair value less cost of disposal (FVLCD). The Group has used the 
FVLCD approach to assess the recoverable amount of the Iron Bridge CGU. 

The FVLCD is based on discounted cashflows using market-based exchange rates, commodity prices, expected pricing 
premiums, estimated quantities of recoverable resources, production levels, operating costs and capital requirements, and 
the cost of its eventual disposal, based on CGU budgets and latest Life of Mine (LoM) plans. Where appropriate, the fair value 
has included probability weighted scenarios in calculating inputs. These cash flows were discounted using a nominal post-
tax discount rate that reflected current market assessments of the time value of money and the risks specific to the CGU.

Production outputs, recoverability of resources and operating and capital costs are based on both LoM plans and internal 
budgets. Mine closure and rehabilitation is based on a combination of internal estimates on disturbance (based on LoM) and 
independent experts' estimates on fixed infrastructure decommissioning. 

The determination of FVLCD for the Iron Bridge CGU is considered to be Level 3 fair value measurements as they are derived 
from valuation techniques that include inputs that are not based on observable market data. As a result of the recoverable 
amount analysis, an impairment expense of US$1,037 million was recognised for the Iron Bridge CGU. 

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FORTESCUE  FY23 ANNUAL REPORT    |    133

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements  
For the year ended 30 June 2023

KEY BALANCE SHEET ITEMS

12 Property, plant and equipment and intangible assets (continued)

(a) Property, plant and equipment (continued)

The table below summarises the key assumptions for the Iron Bridge CGU FVLCD assessment and how they have been 
determined:

Price for Iron Bridge 
product

Operating cost

Published third-party forecast prices available for the 65% Fe Index are used as the basis for 
future Iron Bridge product pricing, with a grade adjustment to 67% Fe, and incorporates an 
additional long-term premium to reflect product value and increasing demand for energy 
efficient magnetite product. The pricing is calculated using probability weighted scenarios 
including any premiums expected.

Operating cost for the ramp up period is based on a Board approved budget. Upon reaching 
nameplate capacity, the model estimates a life of mine operating cost excluding shipping and 
State government royalties of approximately US$45/wmt (real) attributable to Fortescue (net of 
fees for port and power services).

Board approved ramp up is assumed to be at nameplate capacity of 22mt (wet) for FY26.

Production output

Production volumes are based on detailed life of mine plans factoring in current resources 
and reserves, recoverable quantities of ore, environmental and heritage factors.

Exchange rates 
AUD/USD

Long term exchange rate of 0.74 is derived with reference to analyst consensus which 
involves market analysis including equity analyst estimates and internal management 
estimates. 

Discount rates

In calculating FVLCD, a post-tax nominal discount rate of 9.5% was applied to the post tax 
cash flows. The discount rate is impacted by the risk-free rate and other benchmark interest 
rates. The discount rate takes into account both debt and equity. The cost of equity is 
derived from the expected return on investment by the Group’s investors. The cost of debt is 
based on its interest-bearing borrowings the Group is obliged to service. Segment-specific 
risk is incorporated by applying individual beta factors. The beta factors are evaluated 
annually based on publicly available market data.

Summary of impairment:
The carrying amount of the Iron Bridge CGU was US$3,468 million prior to impairment, the recoverable amount was 
calculated to be US$2,431 million calculated on a FVLCD method. An impairment expense of US$1,037 million has been 
recognised at 30 June 2023 reflecting the differences between the carrying amount and the recoverable amount. The post 
tax impact of the impairment assessment was US$726 million.

Sensitivity:

The Iron Bridge CGU is highly sensitive to Iron Bridge product prices, changes in discount rate and foreign exchange rate and 
changes in operating costs. Changes in the key assumptions will impact the recoverability of the CGU. Changes in production 
ramp up cannot be quantified separately given the interrelationship of various assumptions. 

Sensitivities are below:

Sensitivity scenario

US$5/dmt movement in Iron Bridge product price

0.5% change in discount rate

AUD 1 cent movement in the AUD to USD exchange rate

1% movement on operating costs

Impact (US$m)

568 

150

101

71

FORTESCUE  FY23 ANNUAL REPORT    |    134

Financial reportNotes to the consolidated financial statements  
For the year ended 30 June 2023

KEY BALANCE SHEET ITEMS

12 Property, plant and equipment and intangible assets (continued)

(b) Intangible assets

Note

Goodwill
US$m

Other 
intangible
assets 
US$m

Total 
US$m

Net carrying value

At 1 July 2021

Additions

Transfers

Acquisition of a subsidiary

22

Amortisation

At 30 June 2022

Cost 

Accumulated amortisation

Net carrying value

At 1 July 2022

Transfers

Additions

Disposals

Adjustment to subsidiary purchase consideration

22

Amortisation

At 30 June 2023

Cost 

Accumulated amortisation

–

–

–

199

–

199

199

–

199

–

–

–

(4)

–

195

195

–

10

30

54

–

(36)

58

239

(181)

58

71

25

(14)

–

(36)

104

321

10

30

54

199

(36)

257

438

(181)

257

71

25

(14)

(4)

(36)

299

516

(217)

(217)

In considering impairment, the goodwill recognised from the acquisition of Fortescue WAE by Fortescue is allocated to the 
CGUs expected to benefit from Fortescue WAE’s battery electric technology. Fortescue has allocated the goodwill to its 
Pilbara Operations CGU reflecting the electrification of its mining and rail fleet.

The Group has considered the recoverability of the goodwill in respect to current and forecast financial performance of the 
Pilbara Operations CGU and note no indications the goodwill needs to be impaired.

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FORTESCUE  FY23 ANNUAL REPORT    |    135

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements  
For the year ended 30 June 2023

KEY BALANCE SHEET ITEMS

13 Provisions

Employee benefits

Restoration and rehabilitation

Total current provisions

Employee benefits

Restoration and rehabilitation

Total non-current provisions

2023 
US$m

441

4

445

4

1,059

1,063

(a) Provision for restoration and rehabilitation

Movements in the provision for restoration and rehabilitation during the financial year are set out below:

At 1 July

Changes in restoration and rehabilitation estimate

Unwinding of discount

Payments for restoration and rehabilitation activities

At 30 June

2023 
US$m

912

171

2

(22)

1,063

2022 
US$m

370

26

396

3

886

889

2022 
US$m

958

(37)

(1)

(8)

912

The provision for restoration and rehabilitation has been made in full for all disturbed areas at the reporting date based on 
current cost estimates for rehabilitation and infrastructure removal, discounted to their present value based on expected 
timing of future cash flows. 

Payments for restoration and rehabilitation activities exclude ongoing rehabilitation performed as part of normal operations.

FORTESCUE  FY23 ANNUAL REPORT    |    136

Financial reportNotes to the consolidated financial statements  
For the year ended 30 June 2023

TAXATION

14 Taxation

For the year ended 30 June 2023, Fortescue continues to be a signatory to the Board of Taxation’s voluntary Tax Transparency 
Code (TTC). The TTC recommends a number of additional tax disclosures to be publicly available, in two separate parts. The 
Part A disclosure requirements are addressed in this note.

(a)  Income tax expense

Current tax

Deferred tax

Income tax expense in the consolidated income statement

(b) Prima facie income tax expense reconciliation 

Consolidated group

2023 
US$m

2,360

(270)

2,090

2022 
US$m

2,591

58

2,649

Fortescue operates in a number of jurisdictions and pays income taxes accordingly. The Company’s effective corporate income 
tax rate is reflective of the statutory corporate income tax rates in each jurisdiction. The majority of the Group’s taxes are paid 
in Australia consistent with the location of its mining operations. The Australian Group includes Fortescue’s wholly owned 
Australian entities. 

For the year ended 30 June 2023, the Group’s global effective tax rate was 30.4 per cent. This is in line with the Australian 
corporate tax rate of 30 per cent.

Consolidated 
group 2023 
US$m

Australian group 
2023 
US$m

Consolidated 
group 2022 
US$m

Australian group 
2022 
US$m

Profit before income tax expense

Tax at the Australian tax rate of 30 per cent 
(2022: 30 per cent)

Research and development 

Adjustments in respect of income tax 
expense of prior periods

Foreign exchange variations and other 
transactions adjustments

Tax impact of overseas jurisdiction

Non-deductible expenditure

Share-based payments 

Other

Income tax expense

Effective tax rate

6,886

2,066

(8)

(11)

(1)

64

31

(20)

(31)

2,090

30.4%

6,992

2,098

(8)

(11)

(1)

13

31

(20)

(33)

2,069

29.6%

8,846

2,654

(3)

(1)

(31)

12

32

(16)

2

2,649

29.9%

8,732

2,620

(3)

(1)

(31)

16

32

(16)

9

2,626

30.1%

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FORTESCUE  FY23 ANNUAL REPORT    |    137

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements  
For the year ended 30 June 2023

TAXATION

14 Taxation (continued)

(c) Reconciliation of income tax expense to current tax payable

Income tax expense in the consolidated income statement

Deferred tax (expense) / benefit

Current tax payable at 1 July

Tax payments made to tax authorities¹

Impact of foreign exchange on income tax payable²

Current tax payable at 30 June

Consolidated group

2023 
US$m

2,090

270

2,360

284

(2,336)

(4)

304

2022 
US$m

2,649

(58)

2,591

1,468

(3,672)

(103)

284

¹  In Australia, Fortescue pays pay as you go (PAYG) instalments based on a set rate, as advised by the Australian Taxation Office. This rate has been varied to 
more accurately reflect estimated tax liabilities.

² Fortescue’s income tax payments are made in the local currency of the country where taxes are due, being predominantly Australian dollars.

(d) Deferred tax assets and liabilities 

Deferred tax assets and liabilities represent the difference between the carrying value of assets and liabilities compared to 
their income tax base. Deferred tax assets and liabilities are measured at the relevant tax rates enacted for the reporting 
period. Fortescue’s main operations are in Australia and therefore the main taxable income arises in Australia. The 
Company’s major deferred tax assets and liabilities also arise in Australia, predominantly relating to capital investments in 
the Pilbara region.

Deferred tax assets

Deferred tax liabilities

Net deferred tax liabilities

Consolidated group

2023 
US$m

790

(2,296)

(1,506)

2022 
US$m

721

(2,494)

(1,773)

FORTESCUE  FY23 ANNUAL REPORT    |    138

Financial reportNotes to the consolidated financial statements  
For the year ended 30 June 2023

TAXATION

14 Taxation (continued)

(d)  Deferred tax assets and liabilities (continued)

Composition of and movements in deferred tax assets and liabilities during the year are set out below:

Deferred tax assets

Deferred tax liabilities

Charged / (credited) to 
the income statement

Consolidated group

Consolidated group

Consolidated group

Temporary differences arising from 

Exploration expenditure

Development

Property, plant and equipment

Inventories

Foreign exchange losses / (gains)

Provisions

Other financial liabilities 

Other items¹

2023

US$m

2022

US$m

–

–

–

–

29

447

246

68

790

–

–

–

–

–

387

257

77

721

2023

US$m

(192)

(668)

(1,218)

(218)

–

–

–

–

2022

US$m

(177)

(592)

(1,514)

(203)

(8)

–

–

–

2023

US$m

2022

US$m

15

76

(296)

15

(37)

(60)

11

6

26

(97)

109

32

–

(4)

19

(27)

58

(2,296)

(2,494)

(270)

¹ Deferred tax asset of US$3 million in 30 June 2023 and nil in 2022 was recognised in equity.

(e) Unrecognised tax losses and tax credits

At 30 June 2023, the Group had income tax losses of US$145 million (2022: US$20 million) and tax credits of US$2 million 
(2022: nil), in respect of which no deferred tax asset has been recognised. The Group recognises the benefit of tax losses only 
to the extent of anticipated future taxable income or gains in relevant jurisdictions. Of the US$145 million of tax losses, US$21 
million expires not later than 10 years and US$7 million expires later than 10 years and not later than 20 years. The remaining 
tax losses and tax credits do not expire.

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FORTESCUE  FY23 ANNUAL REPORT    |    139

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements  
For the year ended 30 June 2023

UNRECOGNISED ITEMS

15 Commitments and contingencies

(i)  Capital commitments 

Within one year 

Between one and five years

Later than five years

Total commitments 

(ii) Contingent assets and liabilities

2023
US$m

728

373

–

1,101

2022
US$m

528

437

–

965

On 26 August 2022, Fortescue joined the Native Title Compensation Claim proceedings brought by the Yindjibarndi Ngurra 
Aboriginal Corporation (YNAC) against the State of Western Australia in the Federal Court of Australia. At the date of this 
report, there is no present indication of the quantum of compensation sought in the proceedings. The Court has issued a 
timetable for the proceedings which includes several hearings. The first hearing (for opening submissions and on-country 
evidence) commenced in August 2023 and the final hearing (for closing submission) will be in October 2024.

Fortescue remains open to negotiating a Land Access Agreement to the benefit of all Yindjibarndi people on similar terms to 
the agreements it has in place with other native title groups in the region. 

Fortescue had no material contingent assets or contingent liabilities at 30 June 2023 or at the date of this report. Fortescue 
occasionally receives claims arising from its activities in the normal course of business. It is expected that any liabilities arising 
from such claims would not have a material effect on the Group’s operating results or financial position.

16 Events occurring after the reporting period 

On 28 August 2023, the Directors declared a final dividend of 100 Australian cents per ordinary share payable in  
September 2023.

FORTESCUE  FY23 ANNUAL REPORT    |    140

Financial reportNotes to the consolidated financial statements  
For the year ended 30 June 2023

OTHER

17 Related party transactions

(a) Subsidiaries and joint operations 

Interests in significant subsidiaries and joint operations are set out in note 23.

(b) Key management personnel remuneration

Short-term employee benefits

Share-based payments

Long-term employee benefits

Post-employment benefits

2023 
US$'000

8,673

2,929

266

134

12,002

2022 
US$'000

7,868

3,768

234

126

11,996

Detailed information about the remuneration received by each key management person is provided in the remuneration report 
on pages 74 to 108. 

(c)  Transactions and balances with joint operations partners

Transactions with joint operations partners

Other revenue

Heavy mobile equipment rental expense

Goods and services recharged

Purchase of heavy mobile equipment

Balances at 30 June

Other receivables - current

Trade and other payables - current

2023 
US$'000

4,342

1,675

1,714

–

138,282

8

2022 
US$'000

2,204

30,360

–

89,114

126,186

108,121

(d)  Transactions with personally related entities

Key management personnel of the Group hold or have held positions in other companies (personally related entities) where 
it is considered they control or significantly influence the financial or operating policies of those entities. Transactions with 
those entities during the year amounted to US$12 million (2022: US$9 million). There were no amounts owed by the Group to 
personally related entities at 30 June 2023 (2022: US$8 million).

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FORTESCUE  FY23 ANNUAL REPORT    |    141

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements  
For the year ended 30 June 2023

OTHER

18  Share-based payments

(a)  Employee share rights plans

During the year ended 30 June 2023, Fortescue issued 1,179,558 (2022: 604,499) short term share rights and 2,019,419 (2022: 
1,198,293) long term share rights to employees and senior executives, convertible to one ordinary share per right. The short 
term rights vest over one year, and the long term rights vest over three years.

Outstanding at 1 July 

Share rights granted 

Share rights forfeited or lapsed 

Share rights converted or exercised 

Outstanding at 30 June 

2023 
Number

7,084,421

3,198,977

(1,192,508)

(1,881,397)

7,209,493

2022 
Number

12,347,830

1,802,792

(3,733,567)

(3,332,634)

7,084,421

The weighted average fair value of share rights granted during the year ended 30 June 2023 and 2022 are presented below:

Metals

Energy

2023 
A$/right

2022 
A$/right

2023 
A$/right

Short term share rights

Long term share rights

20.20

12.05

14.69

9.17

20.04

11.59

2022 
A$/right

20.22

12.70

The estimated fair value of the short term share rights was determined using a binomial option pricing model and the 
estimated fair value of the long term share rights was determined using a combination of analytical approaches, binomial 
tree and Monte Carlo simulation. The fair value estimation takes into account the exercise price, the effective life of the right, 
the impact of dilution, the share price at grant date, expected price volatility of the underlying share, the effect of additional 
market conditions, the expected dividend yield, estimated share conversion factor and the risk free interest rate for the term 
of the right.

The weighted average inputs used to determine the fair value of share rights granted during the year ended 30 June 2023 
and 2022 were: 

Share price, A$

Exercise price, A$

Volatility, %

Effective life, years

Dividend yield, %

Risk free interest rate, %

Metals

Energy

2023

21.28

–

41

1.93

7.5

3.1

2022

15.65

–

41

2.16

8.4

0.6

2023

2022

21.17

–

41

1.90

7.5

3.1

20.71

–

41

1.40

8.8

2.1

FORTESCUE  FY23 ANNUAL REPORT    |    142

Financial reportNotes to the consolidated financial statements  
For the year ended 30 June 2023

OTHER

18 Share-based payments (continued)

(a) Employee share rights plans (continued) 

Details of Metals share rights outstanding at 30 June 2023 are presented in the following table:

Exercise 
price

Balance at 
the end of the 
year

Metals

Vested and 
exercisable 
at the end of 
the year

Remaining 
contractual 
life

Vesting conditions

A$

Number

Number

Years

Market

Non-
market

Short term share rights 2016 

Short term share rights 2017

Short term share rights 2018

Short term share rights 2019

Short term share rights 2020

Short term share rights 2021

Short term share rights 2022

Short term share rights 2023

Long term share rights 2016 

Long term share rights 2017

Long term share rights 2018

Long term share rights 2019

Long term share rights 2020

Long term share rights 2021

Long term share rights 2022

Long term share rights 2023

–

–

–

–

–

–

–

–

–

–

–

–

–

–

38,641

71,942

38,641

71,942

44,307

44,307

269,553

269,553

171,999

83,139

54,688

804,520

181,360

125,759

172,178

67,491

171,999

83,139

54,688

–

181,360

125,759

172,178

67,491

1,182,822

1,182,822

956,888

616,406

1,264,837

–

–

–

6,106,530

2,463,879

7.5

8.3

9.5

10.5

11.5

12.5

13.5

14.5

7.5

8.3

9.5

10.5

11.5

12.5

13.5

14.5

–

–

–

–

–

–

–

–

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Details of Energy share rights outstanding at 30 June 2023 are presented in the following table: 

Exercise 
price

Balance at 
the end of the 
year

Energy

Vested and 
exercisable 
at the end of 
the year

Remaining 
contractual 
life

Vesting conditions

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Number

Number

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Market

Short term share rights 2022

Short term share rights 2023

Long term share rights 2022

Long term share rights 2023

–

–

–

–

10,959

10,959

350,184

146,899

594,921

–

–

–

1,102,963

10,959

13.5

14.5

13.5

14.5

–

–

Yes

Yes

Non-
market

Yes

Yes

Yes

Yes

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FORTESCUE  FY23 ANNUAL REPORT    |    143

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements  
For the year ended 30 June 2023

OTHER

18 Share-based payments (continued)

(b) Employee expenses 

Total expenses arising from share-based payments transactions recognised during the period as part of employee benefit 
expense were as follows:

Share-based payment expense

19 Remuneration of auditors

PricewaterhouseCoopers Australia 

Audit and other assurance services 

Audit and review of financial statements

Other assurance services

Total audit and assurance services

Other services

Consulting services

Total remuneration of PricewaterhouseCoopers Australia

Network firms of PricewaterhouseCoopers Australia

Audit and other assurances 

Audit and review of financial statements

Total auditors’ remuneration

2023 
US$m

148

2022 
US$m

128

2023 
US$'000

2022 
US$'000

1,546

368

1,914

117

2,031

709

709

2,740

1,084

1,359

2,443

117

2,560

555

555

3,115

FORTESCUE  FY23 ANNUAL REPORT    |    144

Financial report 
Notes to the consolidated financial statements  
For the year ended 30 June 2023

OTHER

20 Deed of cross guarantee

Fortescue Metals Group Ltd and certain of its subsidiaries are parties to a deed of cross guarantee under which each 
company guarantees the debts of the others. By entering into the deed, the wholly owned entities have been relieved from 
the requirement to prepare a financial report and Directors’ report under ASIC Corporations (Wholly-owned Companies) 
Instrument 2016/785 issued by the Australian Securities and Investments Commission.

Holding entity 

•  Fortescue Metals Group Ltd 

Group entities

•  FMG Pilbara Pty Ltd

•  Chichester Metals Pty Ltd

•  Pilbara Mining Alliance Pty Ltd

•  Fortescue Services Pty Ltd

•  FMG Resources (August 2006) Pty Ltd

•  FMG Personnel Pty Ltd

•  International Bulk Ports Pty Ltd

•  The Pilbara Infrastructure Pty Ltd

•  FMG Solomon Pty Ltd

•  FMG Nyidinghu Pty Ltd

•  FMG Personnel Services Pty Ltd

•  FMG Resources Pty Ltd

•  CSRP Pty Ltd

•  FMG Training Pty Ltd

•  FMG Procurement Services Pty Ltd

•  Fortescue Green Technologies Pty Ltd

•  Pilbara Gas Pipeline Pty Ltd

•  Pilbara Marine Pty Ltd

•  Pilbara Power Pty Ltd

•  FMG JV Company Pty Ltd

•  FMG Ashburton Pty Ltd

•   WAE Technologies HoldCo Pty Ltd  

(formerly Fortescue Green Fleet Pty Ltd)

•  FMG Exploration Pty Ltd

•  W Hub Pty Ltd

•  IRBR Pty Ltd

(a)  Consolidated income statement, consolidated statement of comprehensive income, consolidated statement 
of financial position and consolidated statement of changes in equity 

The consolidated income statement, consolidated statement of other comprehensive income and consolidated statement 
of changes in equity for the year ended 30 June 2023 along with the consolidated statement of financial position at 30 June 
2023 for the closed group represented by the above companies are materially the same as that of the Group.

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FORTESCUE  FY23 ANNUAL REPORT    |    145

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements  
For the year ended 30 June 2023

OTHER

21 Parent entity financial information

(a) Summary financial information

Current assets¹ 

Non-current assets¹ 

Total assets 

Current liabilities 

Non-current liabilities

Total liabilities

Net assets

Contributed equity

Reserves

Retained earnings

Total equity

Profit for the year

Total comprehensive income for the year

2023 
US$m

15

10,467

10,482

345

675

1,020

9,462

1,044

122

8,296

9,462

4,130

4,130

2022 
US$m

30

10,276

10,306

312

459

771

9,535

1,053

116

8,366

9,535

7,745

7,745

¹  During the year, the 2022 comparative information was restated to reclassify investments in subsidiaries of US$1,723 million from current to non-current assets.

The parent entity’s financial information has been prepared using the same basis, including the accounting policies, as the 
consolidated financial information, except as outlined below: 

•  Investments in subsidiaries, associates and joint operations have been accounted for at cost, less accumulated impairment 

losses in the balance sheet.

•   Profit for the year includes dividends received from subsidiaries of US$4,028 million (2022: US$6,493 million).

(b) Guarantees entered into by the parent entity

The parent entity is a party to the following guarantee: 

•  Deed of cross guarantee, as described in note 20.

•  Guarantee to an unrelated party in relation to leases entered into by a subsidiary of the Group, which is not a party to the deed of 

cross guarantee described in note 20. 

No liabilities were recognised by the parent entity or the Group in relation to these guarantees.

(c) Contingent liabilities of the parent entity  

The parent entity is a party to the legal proceedings disclosed in note 15(ii) but otherwise did not have any contingent liabilities at 
30 June 2023 or 30 June 2022.

FORTESCUE  FY23 ANNUAL REPORT    |    146

Financial reportNotes to the consolidated financial statements  
For the year ended 30 June 2023

OTHER

22 Business combination

Prior year acquisition of Fortescue WAE

On 28 February 2022, WAE Technologies HoldCo Pty Ltd (formerly Fortescue Green Fleet Pty Ltd), a wholly owned subsidiary 
of Fortescue Metals Group Ltd, acquired 100% of the United Kingdom-based WAE Technologies Ltd (formerly Williams 
Advanced Engineering Ltd), for a total purchase consideration of US$191 million. 

Total cash outflow in prior year 2022 to acquire Fortescue WAE, net of cash acquired, was as follows:

Outflow of cash to acquire subsidiary, net of cash acquired

Cash consideration

Repayment of borrowings 

Less: Balances acquired

           Cash

Net outflow of cash-investing activities

2022
US$m

191

28

219

(9)

210

The purchase price accounting for Fortescue WAE has been finalised during the period. The Group received US$4 million 
from previous owners arising from working capital adjustment reducing the purchase consideration, with a corresponding 
decrease in goodwill to US$195 million (initial goodwill recognised at 30 June 2022: US$199 million). 

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FORTESCUE  FY23 ANNUAL REPORT    |    147

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements  
For the year ended 30 June 2023

OTHER

23 Interests in other entities

(a) Subsidiaries

The consolidated financial statements incorporate the assets, liabilities and results of the following significant subsidiaries, in 
accordance with the accounting policy described in note 24(a)(i):

Country of incorporation

Class  
of shares

2023 
%

2022 
%

Equity holding

Metals Segment

Chichester Metals Pty Ltd

FMG International Pte Ltd

FMG International Shipping Pte Ltd

FMG Insurance Singapore Pte Ltd

FMG Iron Bridge (Aust) Pty Ltd

FMG Magnetite Pty Ltd

FMG Pilbara Pty Ltd

The Pilbara Infrastructure Pty Ltd

Pilbara Marine Pty Ltd

Pilbara Power Pty Ltd

Karribi Developments Pty Ltd 

FMG Air Pty Ltd

FMG Procurement Services Pty Ltd

Pilbara Housing Services Pty Ltd

FMG Autonomy Pty Ltd

Pilbara Iron Ore Pty Ltd

Pilbara Energy Company Pty Ltd

Pilbara Energy (Generation) Pty Ltd

FMG Solomon Pty Ltd

FMG Resources (August 2006) Pty Ltd

FMG Trading Shanghai Co., Ltd

Australia

Singapore

Singapore

Singapore

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

China

FMG Hong Kong Shipping Ltd

Hong Kong

FMG Exploration Pty Ltd

FMG Resources Pty Ltd

FMG International Exploration Pte Ltd

Argentina Fortescue S.A.U.

Ivindo Iron SA

Australia

Australia

Singapore

Argentina

Gabon

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

Ordinary

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

72

100

100

100

100

99.6

99.6

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

–

FORTESCUE  FY23 ANNUAL REPORT    |    148

Financial reportNotes to the consolidated financial statements  
For the year ended 30 June 2023

OTHER

23 Interests in other entities (continued)

(a) Subsidiaries (continued)

Country of 
incorporation

Class  
of shares

Equity holding

2023 
%

2022 
%

Energy Segment

Fortescue Future Industries Pty Ltd

Australia

Ordinary

WAE Technologies HoldCo Pty Ltd (formerly 
Fortescue Green Fleet Pty Ltd)

WAE Technologies Ltd (formerly Williams 
Advanced Engineering Ltd)

FFI USA Investments Inc.

MIH2 Pty Ltd

Australian Fortescue Future Industries Pty Ltd

Gladstone Fortescue Future Industries Pty Ltd

Netherlands Fortescue Future Industries 
Holdings B.V.

Australian Fortescue Future Industries Holdings 
Pty Ltd

Australia

Ordinary

United Kingdom

Ordinary

USA

Australia

Australia

Australia

Ordinary

Ordinary

Ordinary

Ordinary

Netherlands

Ordinary

Australia

Ordinary

Argentina Fortescue Future Industries SA

Argentina

Ordinary

100

100

100

100

100

100

100

100

100

100

100

100

100

–

100

100

100

–

100

100

Entities not included in the list of significant subsidiaries are deemed immaterial in relation to the Group.

(b) Joint operations 

The consolidated financial statements incorporate Fortescue’s share in the assets, liabilities and results of the following 
principal joint operations, in accordance with the accounting policy described in note 24(a)(iii).

Joint operations

Country of 
incorporation

Holding entity

Principal activities

2023

2022

Iron Bridge             
Joint Venture

Australia

FMG Magnetite Pty Ltd

Development of magnetite 
assets and production of 
magnetite concentrate

69

69

Participating interest %

(c) Investments accounted for using the equity method

The Group also holds interests in a number of individually immaterial joint ventures and an associate that are accounted for 
using the equity method.

Associates

Joint ventures

Total

Aggregate carrying amount as at 30 June

Aggregate amounts of the Group’s share of:

2023

US$m

119

     Profit/(loss) from operations

–

2022

US$m

14

9

2023

US$m

141

(8)

2022

US$m

56

(3)

2023

US$m

260

2022

US$m

70

(8)

6

FORTESCUE  FY23 ANNUAL REPORT    |    149

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Notes to the consolidated financial statements  
For the year ended 30 June 2023

OTHER

24 Summary of significant accounting policies

The principal accounting policies adopted in the preparation 
of these consolidated financial statements are set out below.

(a) Principles of consolidation

(i) Subsidiaries

The consolidated financial statements incorporate the 
financial statements of the Company and its subsidiaries, 
being the entities controlled by the Company. Control exists 
when the Group is exposed to, or has right to, variable 
returns from its involvement with the entity and has the 
ability to affect those returns through its power to direct the 
activities of the entity.

The financial statements of subsidiaries are prepared for 
the same reporting period as the Company, using consistent 
accounting policies. All intercompany balances and 
transactions, including unrealised profits and losses arising 
from intra-group transactions, have been eliminated in full. 
Subsidiaries are consolidated from the effective date of 
acquisition to the effective date of disposal.

The acquisition method of accounting is used to account 
for the Group’s business combinations. Identifiable assets 
acquired and liabilities assumed in a business combination 
are, with limited exceptions, measured initially at their fair 
values at the acquisition date. 

Acquisition-related costs are expensed as incurred and 
included in administration expenses.

The excess of the consideration transferred over the fair 
value of the net identifiable assets acquired is recorded 
as goodwill. If those amounts are less than the fair value 
of the net identifiable assets of the business acquired, the 
difference is recognised directly in profit or loss as a bargain 
purchase.

Where settlement of any part of consideration is deferred, 
the amounts payable in the future are discounted to their 
present value as at the date of exchange. The discount rate 
used is the entity’s incremental borrowing rate, being the 
rate at which a similar borrowing could be obtained from 
an independent financier under comparable terms and 
conditions.

Contingent consideration is classified either as equity or a 
financial liability. Amounts classified as a financial liability are 
subsequently remeasured to fair value with changes in fair 
value recognised in profit or loss.

Non-controlling interests in the results and equity of 
subsidiaries are shown separately in the consolidated income 
statement, the consolidated statement of comprehensive 
income, consolidated statement of changes in equity and 
consolidated statement of financial position respectively.

(ii) Associates

Associates are all entities where the Group holds significant 
influence. Significant influence is the power to participate in 
the financial and operating policy decisions of the investee, 
but is not control or joint control over those policies. 
Associates are entities where the Group holds less than 20% 
of the voting rights, but has determined that it has significant 
influence over those entities due to the Group having 
representation on the Board of directors and participation in 
decisions over the relevant activities of those entities.

Investments in associates are accounted for using the equity 
method of accounting (see (iv) below), after initially being 
recognised at cost.

(iii) Joint arrangements

A joint arrangement is an arrangement when two or more 
parties have joint control. Joint control exists when the parties 
agree contractually to share control over the activities that 
significantly affect the entity’s returns (relevant activities), and 
the decisions about relevant activities require the unanimous 
consent of the parties sharing joint control.

Joint arrangements are classified as either joint operations or 
joint ventures, based on the contractual rights and obligations 
between the parties to the arrangement.

FORTESCUE  FY23 ANNUAL REPORT    |    150

Financial reportNotes to the consolidated financial statements  
For the year ended 30 June 2023

OTHER

24 Summary of significant accounting policies (continued)

(a) Principles of consolidation (continued)

Joint operations

If the contractual arrangement specifies a right to the 
assets and the obligations for the liabilities for the parties, 
the arrangement is classified as joint operation. The Group 
recognises its direct right to the assets, liabilities, revenues 
and expenses of joint operations and its share of any jointly 
held or incurred assets, liabilities, revenue and expenses.

These have been incorporated in the financial statements 
under the appropriate headings. Details of the joint 
operations are set out in note 23(b).

To support operations and construction projects of some 
of the joint operations, Fortescue and other parties to 
the joint arrangements are required, from time to time, to 
contribute funds in the form of cash calls, in proportion to 
their respective interests in the joint arrangements. These 
funds, if contributed by the parties to the joint arrangements 
in different financial years, may give rise to deferred joint 
venture contribution assets or liabilities.

Joint ventures

If the contractual arrangement grants the parties the right 
to the arrangement’s net assets, it is classified as a joint 
venture. Interests in joint ventures are accounted for using 
the equity method, after initially being recognised at cost in 
the consolidated statement of financial position.

(iv) Equity method

Under the equity method of accounting, the investments 
are initially recognised at cost and adjusted thereafter to 
recognise the Group’s share of the post-acquisition profits 
or losses of the investee in profit or loss, and the Group’s 
share of movements in other comprehensive income of 
the investee in other comprehensive income. Dividends 
received or receivable from associates and joint ventures 
are recognised as a reduction in the carrying amount of the 
investment.

Where the Group’s share of losses in an equity-accounted 
investment equals or exceeds its interest in the entity, 
including any other unsecured long-term receivables, the 
Group does not recognise further losses, unless it has 
incurred obligations or made payments on behalf of the 
other entity.

Unrealised gains on transactions between the Group and its 
associates and joint ventures are eliminated to the extent of 
the Group’s interest in these entities. Unrealised losses are 
also eliminated unless the transaction provides evidence of 
an impairment of the asset transferred. Accounting policies 
of equity-accounted investees have been changed where 
necessary to ensure consistency with the policies adopted 
by the Group.

The carrying amount of equity-accounted investments 
is tested for impairment in accordance with the policy 
described in note 24(q).

(b) Employee share trust

The Group has formed a trust to administer its employee 
share schemes. The trust is consolidated as the substance 
of the relationship is that the trust is controlled by the Group. 
Shares held by the share trust are disclosed as treasury 
shares and deducted from contributed equity.

(c) Foreign currency translation

Transactions in foreign currencies have been converted 
at rates of exchange at the date of those transactions. 
Monetary assets and liabilities denominated in foreign 
currencies are translated at the rates of exchange of 
the reporting date, with the resulting gains and losses 
recognised in the income statement, except as set out 
below:

•   For qualifying cash flow hedges, the gains and losses 

arising on foreign currency translations are deferred in 
other comprehensive income.

•   Translation differences on site rehabilitation provisions are 

capitalised as part of the development assets. 

•   Gains and losses on assets and liabilities carried at fair 
value are reported as part of the fair value gain or loss.

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FORTESCUE  FY23 ANNUAL REPORT    |    151

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements  
For the year ended 30 June 2023

OTHER

24 Summary of significant accounting policies (continued)

(d) Revenue recognition

(e) Deferred income

The Group is principally engaged in the business of 
producing iron ore and providing related freight/shipping 
services. Revenue is measured at the amount the Group 
expects to be entitled to in exchange for those goods or 
services and is recognised at the point at which control of 
the goods or services is transferred to the customer.

(i) Sale of products

Revenue from the sale of products is recognised when 
control has passed to the customer, no further work or 
processing is required by the Group, the quantity and quality 
of the products have been determined with reasonable 
accuracy, the price can be reasonably estimated and 
collectability is reasonably assured.

The above conditions are generally satisfied when title 
passes to the customer, typically on the bill of lading date 
when iron ore is delivered to the vessel, or alternatively on 
collection for port sales.

Revenue is recorded at the invoiced amounts. However, 
the shipping service represents a separate performance 
obligation, and is recognised separately from the sale of iron 
ore over the period during which the shipping service has 
been provided, along with any associated shipping costs.

Fortescue’s iron ore sales contracts, which also include 
shipping services, may provide for provisional pricing of 
sales at the time the product is delivered to the vessel with 
final pricing determined using the relevant price indices on 
or after the vessel’s arrival at the port of discharge. Under 
AASB 9 the receivable asset is measured at fair value 
through profit and loss.

(ii) Services revenue

Revenue from the provision of towage services is recognised 
in the accounting period in which the services are rendered, 
and revenue from manufacturing and engineering services 
are recognised on a percentage of completion basis.

(iii) Interest income

Interest income is accrued using the effective interest rate 
method.

Deferred income represents payments collected but 
not earned at the end of the reporting period. These 
payments are recognised as revenue when the performance 
obligations are satisfied.

Where deferred income is considered to contain a financing 
component and if the period of time between the receipt 
of the upfront cash and the satisfaction of the future 
performance obligations is greater than 1 year, an interest 
charge of the upfront amount will be recognised.

(f) Income tax

The income tax expense for the year is the tax payable on 
the current year’s taxable income based on the applicable 
income tax rate for each jurisdiction. Income tax on the profit 
or loss for the period comprises current and deferred tax.

Current income tax charge is calculated on the basis of the 
taxation laws enacted or substantively enacted at the end of 
the reporting period in the countries where the Company’s 
subsidiaries operate and generate taxable income. Current 
income tax represents the expected tax payable on the 
taxable income for the year and any adjustments to tax 
payable in respect to previous years.

Where the amount of tax payable or recoverable is 
uncertain, a provision is established based on the Group’s 
understanding of applicable tax law at the time. Settlement 
of these matters may result in changes to current and 
deferred income tax if the settlement differs from the 
provision.

Deferred income tax is provided in full, using the liability 
method, on temporary differences arising between the tax 
bases of assets and liabilities and their carrying amounts 
(subject to the Pillar Two disclosure exception noted below).

However, the deferred income tax is not accounted for if 
it arises from the initial recognition of an asset or liability 
in a transaction, other than a business combination, 
that at the time of the transaction affects neither the 
accounting nor taxable profit or loss. Deferred income 
tax is determined using tax rates and laws that have been 
enacted or substantially enacted by the reporting date and 
are expected to apply when the related deferred income tax 
asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for future deductible 
temporary differences and carry forward of unused tax 
losses only if it is probable that future taxable amounts 
will be available to utilise those temporary differences and 
losses. Deferred tax assets are reviewed at each reporting 
date and are reduced to the extent that it is no longer 
probable that the related tax benefit will be realised.

FORTESCUE  FY23 ANNUAL REPORT    |    152

Financial reportNotes to the consolidated financial statements  
For the year ended 30 June 2023

OTHER

24 Summary of significant accounting policies (continued)

(f) Income tax (continued)

(g) Cash and cash equivalents

Deferred tax assets and liabilities are offset when there is 
a legal right to offset current tax assets and liabilities and 
when the deferred tax balances relate to the same taxation 
authority. Current tax assets and tax liabilities are offset 
where the Group has a legally enforceable right to offset and 
intends either to settle on a net basis, or to realise the asset 
and settle the liability simultaneously.

In a future year, the Group is expected to be subject to the 
Base Erosion and Profit Shifting (BEPS) Pillar Two rules 
which seek to ensure a 15% minimum tax rate is paid by large 
multinational groups in each global jurisdiction in which 
they operate. Although the Australian Government has 
committed to implementing these rules for financial years 
starting on or after 1 January 2024, the relevant legislation 
has not yet been substantively enacted. In this regard, 
the International Accounting Standards Board released 
amendments to IAS 12 Income Taxes relating to Pillar Two 
in May 2023. Consistent with these amendments, in relation 
to the current year, the Group has applied the mandatory 
exception to recognising and disclosing information about 
deferred tax assets and liabilities relating to Pillar Two 
income taxes.

Fortescue and its wholly owned Australian controlled entities 
have implemented the tax consolidation legislation at 1 
July 2002, namely the FMG tax consolidated group, and 
are therefore taxed as a single entity from that date. FMG 
Iron Bridge (Aust) Pty Ltd and its wholly owned Australian 
controlled entities have implemented the tax consolidation 
legislation as at 28 September 2011, namely the FMG Iron 
Bridge tax consolidated group, and are therefore taxed as 
a single entity from that date. On 1 July 2022, the FMG Iron 
Bridge tax consolidated group merged with the FMG tax 
consolidated group, and are therefore taxed as a single 
entity from this date.

The head entity and the controlled entities in the tax 
consolidated group continue to account for their own 
current and deferred tax amounts. These tax amounts are 
measured as if each entity in the tax consolidated group 
continues to be a standalone taxpayer in its own right.

In addition to its own current and deferred tax amounts, 
the head entity of the group also recognises the current 
tax liabilities, or assets, and the deferred tax assets it has 
assumed from unused tax losses and unused tax credits 
from controlled entities in the tax consolidated group.

Cash and cash equivalents include cash on hand, short-term 
deposits and other short-term highly liquid investments that 
are subject to an insignificant risk of changes in value, and 
are readily convertible to known amounts of cash.

(h) Trade and other receivables

Trade receivables other than iron ore sales receivables and 
other receivables are recognised at amortised cost using the 
effective interest method, less an allowance for impairment. 
Trade receivables with embedded derivatives for provisional 
pricing are measured at fair value through profit and loss 
under AASB 9.

The collectability of trade and other receivables is reviewed 
on a monthly basis. Uncollectable amounts for iron ore sales 
trade receivables are considered in the measurement of fair 
value through the income statement under AASB 9. Trade 
and other receivables that are measured at amortised cost 
are determined using the expected credit loss model. Total 
receivables which are known to be uncollectable are written 
off by reducing the carrying amount directly. Significant 
financial difficulties of the customer, probability that the 
customer will enter bankruptcy or financial reorganisation 
and default or delinquency in payments are considered 
indicators that the receivable may not be collected. The 
amount of the impairment allowance is the difference 
between the receivable’s carrying amount and the present 
value of estimated future cash flows, discounted at the 
original effective interest rate. Cash flows relating to 
short-term receivables are not discounted if the effect of 
discounting is immaterial.

The amount of the impairment allowance is recognised in 
the income statement within administration expenses. When 
a receivable for which an impairment allowance had been 
recognised becomes uncollectable in a subsequent period, 
it is written off against the allowance account. Subsequent 
recoveries of amounts previously written off are credited 
against other administration expenses.

(i) Accrued income

Accrued income primarily relates to the Group’s rights 
to consideration for work performed but not billed at the 
reporting date. The accrued income is transferred to trade 
receivables in accordance with contractual terms with the 
customer, when the rights have become unconditional. 

Payments from customers are received based on a billing 
schedule / milestone basis, as established in the contract.

FORTESCUE  FY23 ANNUAL REPORT    |    153

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Notes to the consolidated financial statements  
For the year ended 30 June 2023

OTHER

24 Summary of significant accounting policies (continued)

(i) Inventories

Warehouse stores and materials, work in progress 
and finished goods are stated at the lower of cost and 
net realisable value. Cost for raw materials and stores 
is determined as the purchase price. Cost of work in 
progress comprises direct materials, direct labour and 
an appropriate proportion of variable and fixed overhead 
expenditure, the latter being allocated on the basis of 
normal operating capacity.

For partly processed and saleable iron ore, cost is based on 
the weighted average cost method and includes:

• Materials and production costs, directly attributable to the 
extraction, processing and transportation of iron ore to 
the existing location.

• Production and transportation overheads.

• Depreciation of property, plant and equipment used in the 

extraction, processing and transportation of iron ore.

Iron ore stockpiles represent iron ore that has been 
extracted and is available for further processing or sale. 
Quantities are assessed primarily through internal and third 
party surveys. Where there is an indication that inventories 
are obsolete or damaged, these inventories are written 
down to net realisable value. Net realisable value is the 
estimated selling price in the ordinary course of business 
less the estimated costs of completion and the estimated 
costs necessary to make the sale.

Iron ore stockpiles classified as non-current assets reflect 
stockpiles which are not expected to be utilised within the 
next 12 months, with the net realisable value calculated on a 
discounted cashflow basis.

(j) Financial assets

Fortescue classifies its financial assets into the following 
categories: those to be measured subsequently at fair 
value, being through either other comprehensive income 
or through profit and loss, and those that are to be held at 
amortised cost.

The classification depends on the purpose for which the 
financial assets were acquired. Management determines 
the classification of its financial assets at initial recognition.

(i) Financial assets held at amortised cost

The Group classifies its financial assets as held at amortised 
cost only if the asset is held within a business model with 
the objective to collect the contractual cash flows, and the 
contractual terms give rise to cash flows that are solely 
payments of principal and interest. The classification of 
financial assets held at amortised cost applies to Fortescue’s 
loans and receivables. These debt instruments are initially 
measured at fair value and subsequently carried at 
amortised cost. They are included in current assets, except 
for those with maturities greater than 12 months after the 
reporting date which are classified as non-current assets. At 
the end of each reporting period, loans and receivables are 
reviewed for impairment.

(ii) Financial assets held at fair value through other 
comprehensive income (FVOCI)

The Group’s classification of financial assets held at fair 
value through other comprehensive income applies 
to equity investments where the Group has made the 
irrevocable election to present the fair value gains or losses 
on revaluation of the asset in other comprehensive income. 
This election can be made for each investment; however, it 
is not applicable to equity investments which are held for 
trading. These assets are included in non-current assets 
unless management intends to dispose of the investment 
within 12 months of the reporting date. These instruments 
are recognised at fair value, with changes in fair value being 
recognised directly in other comprehensive income.

(iii) Financial assets held at fair value through profit or loss 
(FVPL)

This category comprises trade receivables including the 
quotation period for the sale of iron ore, derivatives (unless 
designated as effective hedging instruments) and equity 
investments which are held for trading or where the FVOCI 
election has not been applied. They are carried on the 
statement of financial position at fair value with changes 
in fair value or dividend income recognised in profit or loss 
with any associated changes in fair value recognised in the 
income statement. The receivables relating to quotation 
period for the sale of iron ore are recorded as trade 
receivables.

FORTESCUE  FY23 ANNUAL REPORT    |    154

Financial reportNotes to the consolidated financial statements  
For the year ended 30 June 2023

OTHER

24 Summary of significant accounting policies (continued)

(k) Financial liabilities

(i) Trade payables

Trade and other payables are initially recognised at fair value 
and subsequently carried at amortised cost and represent 
liabilities for goods and services provided to the Group prior 
to the end of the financial year that are unpaid.

(ii) Borrowings

Borrowings are initially recognised at fair value of the 
consideration received, less directly attributable transaction 
costs. After initial recognition, borrowings are subsequently 
measured at amortised cost using the effective interest 
method.

Borrowings are derecognised when the contractual 
obligations are discharged, cancelled or expire, or when 
the terms of an existing borrowing are substantially 
modified. Any difference between the carrying amount of a 
derecognised liability and the carrying amount of the new 
liability is recognised in the income statement.

(l) Property, plant and equipment

(i) Recognition and measurement

Each class of property, plant and equipment is stated at 
historical cost less, where applicable, any accumulated 
depreciation and impairment loss. Historical cost includes 
expenditure that is directly attributable to the acquisition of 
the assets.

The cost of self-constructed assets includes the cost of 
materials and direct labour and any other costs directly 
attributable to bringing an asset to a working condition 
ready for its intended use. Assets under construction 
are recognised in assets under development. Upon 
commissioning, which is the date when the asset is in the 
location and condition necessary for it to be capable of 
operating in the manner intended by management, the 
assets are transferred into property, plant and equipment or 
development assets, as appropriate.

Cost may also include transfers from equity of any gain or 
loss on qualifying cash flow hedges of foreign currency 
purchases of property, plant and equipment. Borrowing 
costs related to the acquisition or construction of qualifying 
assets are capitalised. Costs required for dismantling and 
rehabilitation are included in rehabilitation estimates. 
Further information on rehabilitation is in note 24(p).

When separate parts of an item of property, plant and 
equipment have different useful lives, they are accounted 
for as separate items of property, plant and equipment. 
Purchased software that is integral to the functionality of the 
related equipment is capitalised as part of the equipment.

Gains and losses arising on disposal of property, plant and 
equipment are recognised in the income statement and 
determined by comparing proceeds from the sale of the 
assets to their carrying amount.

(ii) Subsequent costs

Subsequent costs are included in the asset’s carrying 
amount or recognised as a separate asset, as appropriate, 
only when it is probable that future economic benefits 
associated with these subsequent costs will flow to 
Fortescue and the cost of the item can be measured reliably. 
Ongoing repairs and maintenance are recognised as an 
expense in the income statement during the financial period 
in which they are incurred.

(iii) Depreciation

Depreciation of assets, other than land which is not 
depreciated, is calculated using the straight-line method 
or units of production method, net of residual values, over 
estimated useful lives. Depreciation commences on the 
date when an asset is available for use, that is, when it is in 
the location and condition necessary for it to be capable of 
operating in the manner intended by management. Assets 
acquired under leases are depreciated over the shorter of 
the individual asset’s useful life and the lease term.

Straight-line method

Where the useful life is not linked to the quantities of iron ore 
produced, assets are generally depreciated on a straight-line 
basis. The estimated useful lives for the principal categories 
of property, plant and equipment depreciated on a straight-
line basis are as follows:

•  Buildings 20 to 40 years

•  Rolling stock 25 to 30 years

•  Plant and equipment 2 to 20 years

•  Rail and port infrastructure assets 40 to 50 years.

The estimated useful lives, residual values and depreciation 
method are reviewed at the end of each reporting period 
with the effect of any changes in estimate accounted for on a 
prospective basis.

Units of production method

Where the useful life of an asset is directly linked to the 
extraction of iron ore from a mine, the asset is depreciated 
using the units of production method.

The units of production method is an amortised charge 
proportional to the depletion of the estimated proven and 
probable reserves at the mines.

FORTESCUE  FY23 ANNUAL REPORT    |    155

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Notes to the consolidated financial statements  
For the year ended 30 June 2023

OTHER

24 Summary of significant accounting policies (continued)

Development costs are accumulated in respect of 
each separate area of interest. Costs associated with 
commissioning new assets in the period before they 
are capable of operating in the manner intended by 
management are capitalised. Development costs incurred 
after the commencement of production are capitalised 
to the extent they are expected to give rise to a future 
economic benefit.

When an area of interest is abandoned or the Directors 
decide that it is not commercially or technically feasible, 
any accumulated cost in respect of that area is written off in 
the financial period that the decision is made. Each area of 
interest is reviewed at the end of each accounting period and 
the accumulated costs written off to the income statement 
to the extent that they will not be recoverable in the future.

Amortisation of development costs capitalised is charged on 
a unit of production basis over the life of estimated proven 
and probable reserves at the mines.

(m) Stripping costs

(i) Development stripping costs

Overburden and other mine waste materials are often 
removed during the initial development of a mine in order 
to access the mineral deposit. This activity is referred to as 
development stripping and the directly attributable costs, 
inclusive of an allocation of relevant overhead expenditure, 
are capitalised as development costs.

Capitalisation of development stripping costs ceases and 
amortisation of those capitalised costs commences upon 
commercial extraction of ore.

Amortisation of capitalised development stripping costs is 
determined on a unit of production basis for each area of 
interest. 

Development stripping costs are considered in combination 
with other assets of an operation for the purpose of 
undertaking impairment assessments.

(l) Property, plant and equipment (continued)

(iv) Exploration and evaluation expenditure

Exploration and evaluation activities involve the search for 
mineral resources, the determination of technical feasibility 
and the assessment of commercial viability of an identified 
resource. Exploration and evaluation expenditure incurred is 
accumulated and capitalised in respect of each identifiable 
area of interest, and carried forward to the extent that:

•  Rights to tenure of the identifiable area of interest are 

current.

•   At least one of the following conditions is also met:

(i)  The expenditure is expected to be recouped through 
the successful development of the identifiable area of 
interest, alternatively by its sale; or

(ii)  Where activities in the identifiable area of interest have 
not, at the reporting date, reached a stage that permits 
a reasonable assessment of the existence or otherwise 
of economically recoverable reserves and activities in, 
or in relation to, the area of interest, are continuing.

Exploration and evaluation assets are reviewed at each 
reporting date for indicators of impairment and tested for 
impairment where such indicators exist. If the test indicates 
that the carrying value might not be recoverable, the asset 
is written down to its recoverable amount. These charges 
are recognised within exploration, development and other 
expenses in the income statement.

Where an impairment loss subsequently reverses, the 
carrying amount of the asset is increased to the revised 
estimate of its recoverable amount, but only to the extent 
that the increased carrying amount does not exceed the 
carrying amount that would have been determined had no 
impairment loss been recognised for the asset in previous 
years.

Once the technical feasibility and commercial viability of 
the extraction of mineral resources in an area of interest are 
demonstrable, exploration and evaluation assets attributable 
to that area of interest are first tested for impairment 
and then reclassified from exploration and evaluation 
expenditure to development expenditure.

(v) Development expenditure

Development expenditure includes capitalised exploration 
and evaluation costs, pre-production development costs, 
development studies and other expenditure pertaining 
to that area of interest. Costs related to surface plant and 
equipment and any associated land and buildings are 
accounted for as property, plant and equipment.

FORTESCUE  FY23 ANNUAL REPORT    |    156

Financial report 
 
Notes to the consolidated financial statements  
For the year ended 30 June 2023

OTHER

24 Summary of significant accounting policies (continued)

(m) Stripping costs (continued)

(ii) Production stripping costs

Overburden and other mine waste materials continue to 
be removed throughout the production phase of the mine. 
This activity is referred to as production stripping, and 
the associated costs charged to the income statement, as 
operating cost, except when all three criteria below are met:

•   Production stripping activity provides improved access to 
the specific component of the ore body, and it is probable 
that economic benefit arising from the improved access 
will be realised in future periods.

(i) Research and development costs

Research costs are expensed as incurred. Development 
expenditures on an individual project are recognised as an 
intangible asset only when the Group can demonstrate all of 
the following:

•   The technical feasibility of completing the intangible asset 

so that the asset will be available for use or sale.

•   Its intention to complete and its ability and intention to use 

or sell the asset.

•   How the asset will generate future economic benefits

•   The availability of resources to complete the asset.

•   The Group can identify the component of the ore body for 

•   The ability to measure reliably the expenditure during 

which access has been improved.

development.

Following initial recognition of the development expenditure 
as an asset, the asset is carried at cost less any accumulated 
amortisation and accumulated impairment losses. 
Amortisation of the asset begins when development is 
complete and the asset is available for use. It is amortised 
over the period of expected future benefit. Amortisation is 
recorded in cost of sales. During the period of development, 
the asset is tested for impairment annually.

(ii) Goodwill

Goodwill is measured as described in note 24(a)(i). Goodwill 
on acquisition of subsidiaries is included in intangible assets. 
Goodwill is not amortised but it is tested for impairment 
annually, or more frequently if events or changes in 
circumstances indicate that it might be impaired, and is 
carried at cost less accumulated impairment losses. 

Goodwill is allocated to cash-generating units for the 
purpose of impairment testing. The allocation is made to 
those cash-generating units or groups of cash-generating 
units that are expected to benefit from the business 
combination in which the goodwill arose.

•   The costs relating to the production stripping activity 

associated with that component can be measured reliably.

If all of the above criteria are met, production stripping costs 
resulting in improved access to the identified component of 
the ore body are capitalised as part of development asset 
and are amortised over the life of the component of the ore 
body.

The determination of components of the ore body is 
individual for each mine. The allocation of costs between 
production stripping activity and the costs of ore produced 
is performed using relevant production measures, typically 
strip ratios.

Changes to the mine design, technical and economic 
parameters affecting life of the components and strip ratios 
are accounted for prospectively.

(n) Intangible assets

The Group capitalises amounts paid for the acquisition of 
identifiable intangible assets, such as software, licenses, 
trademarks and patents, where it is considered they will 
contribute to future periods through revenue generation or 
reductions in cost. The cost of intangible assets acquired 
in a business combination are recognised at fair value at 
the acquisition date. Following initial recognition, intangible 
assets are carried at cost less amortisation and any 
impairment losses. Intangible assets with finite lives are 
amortised on a straight-line basis over their useful lives and 
tested for impairment whenever there is an indication that 
they may be impaired. The amortisation period and method 
is reviewed at each financial year end.

FORTESCUE  FY23 ANNUAL REPORT    |    157

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Notes to the consolidated financial statements  
For the year ended 30 June 2023

OTHER

24 Summary of significant accounting policies (continued)

(o) Leases

The Group enters into contractual arrangements for the 
leases of mining equipment, vehicles, buildings and other 
assets. The nature of these arrangements can be lease 
contracts or service contracts with embedded assets. 
Typically, the duration of these contracts is for periods of 
between two and five years, some of which include extension 
options.

Leases are recognised on the statement of financial position 
as a right of use asset, representing the lessee’s entitlement 
to the benefits of the identified asset over the lease term, 
and a lease liability representing the lessee’s obligation to 
make the lease payments. Each lease payment is allocated 
between its liability and finance cost component. The 
finance cost is charged to the income statement over the 
lease period so as to produce a constant periodic rate of 
interest on the remaining balance of the liability for each 
period. 

The right of use asset is amortised on a straight-line basis 
over the shorter of the useful life of the asset and lease 
term. When the right of use asset is used in the extraction, 
processing and transportation of ore, depreciation is 
included in inventory.

Liabilities arising from contractual arrangements which 
contain leases are initially measured at the present value 
of the future lease payments. These payments include the 
present value of fixed payments prescribed in the contract; 
variable lease payments based on an index or prescribed 
rate; amounts expected to be payable by the lessor under 
residual value guarantees; and exercise price of a purchase 
option if it is reasonably certain that the option will be 
exercised.

Right of use assets are initially measured at the amount of 
the initial lease liability plus any lease payments at or before 
commencement date less incentives received, plus any 
initial direct costs, and any costs required for dismantling 
and rehabilitation. Right of use assets are subsequently 
measured at cost less any accumulated depreciation and 
accumulated impairment losses, and any adjustment for 
remeasurement of the lease liability. Lease liabilities are 
subsequently measured at present value, adjusted for any 
variations to the underlying contract terms.

Lease payments are discounted using the interest rate 
implicit in the lease. If this rate cannot be determined, the 
Group’s incremental borrowing rate is used, which is the 
rate which the Group would have to pay to borrow the funds 
necessary to obtain an asset of a similar value in a similar 
economic environment over a similar term and security.

Payments for short-term leases and low value assets are 
recognised on a straight-line basis as an expense in the 
income statement. Short-term leases are for a period of 
12 months or less and contracts involving low value assets 
typically comprise small items of IT hardware and minor 
sundry assets.

(p) Rehabilitation provision

Provisions are recognised when Fortescue has a present 
legal or constructive obligation as a result of past events. 
It is more likely than not that an outflow of resources will 
be required to settle the obligation and the amount can be 
reliably estimated.

The mining, extraction and processing activities of Fortescue 
give rise to obligations for site rehabilitation. Rehabilitation 
obligations include decommissioning of facilities, removal 
or treatment of waste materials, land rehabilitation and site 
restoration.

The extent of work required and the associated costs 
are estimated using current restoration standards and 
techniques. Provisions for the cost of each rehabilitation 
program are recognised at the time that environmental 
disturbance occurs. Rehabilitation provisions are initially 
measured at the expected value of future cash flows 
required to rehabilitate the relevant site, discounted to their 
present value using Australian Government bond market 
yields that match, as closely as possible, the timing of 
the estimated future cash outflows. The judgements and 
estimates applied for the estimation of the rehabilitation 
provisions are discussed in note 25(e).

When provisions for closure and rehabilitation are initially 
recognised, the corresponding cost is capitalised into the 
cost of mine development assets, representing part of 
the cost of acquiring the future economic benefits of the 
operation. The capitalised cost of closure and rehabilitation 
activities is recognised within development assets and is 
amortised based on the units of production method over the 
life of the mine. The value of the provision is progressively 
increased over time as the effect of discounting unwinds, 
creating an expense recognised in finance costs.

At each reporting date, the rehabilitation liability is 
remeasured to account for any new disturbance, updated 
cost estimates, inflation, changes to the estimated reserves 
and lives of operations, new regulatory requirements, 
environmental policies and revised discount rates. Changes 
to the rehabilitation liability are added to or deducted from 
the related rehabilitation asset and amortised accordingly.

FORTESCUE  FY23 ANNUAL REPORT    |    158

Financial reportNotes to the consolidated financial statements  
For the year ended 30 June 2023

OTHER

24 Summary of significant accounting policies (continued)

(q) Impairment of non-financial assets

(r) Finance costs

Assets are reviewed for impairment whenever events or 
changes in circumstances indicate that the carrying amount 
may not be recoverable. The Group conducts an internal 
review of asset values bi-annually, which is used as a source 
of information to assess for any indications of impairment. 
External factors, such as changes in expected future prices, 
costs and other market factors are also monitored to assess 
for indications of impairment. If any such indication exists, 
an estimate of the asset’s recoverable amount is calculated, 
being the higher of fair value less direct costs to sell and the 
asset’s value in use. An impairment loss is recognised for the 
amount by which the asset’s carrying amount exceeds its 
recoverable amount.

Fair value is determined as the amount that would be 
obtained from the sale of the asset in an arm’s length 
transaction between knowledgeable and willing parties. 

Fair value for mineral assets is generally determined using 
independent market assumptions to calculate the present 
value of the estimated future cash flows expected to arise 
from the continued use of the asset, including any expansion 
prospects, and its eventual disposal. These cash flows are 
discounted using an appropriate discount rate to arrive at a 
net present value of the asset.

Value in use is determined as the present value of the 
estimated future cash flows expected to arise from the 
continued use of the asset in its present form and its 
eventual disposal, discounted using a pre-tax discount rate 
that reflects current market assessments of the time value 
of money and the risks specific to the asset for which the 
estimates of future cash flows have not been adjusted.

Value in use is determined by applying assumptions specific 
to the Group’s continued use and does not take into account 
future development. 

In testing for indications of impairment and performing 
impairment calculations, assets are considered as collective 
groups and referred to as cash generating units. Cash 
generating units are the smallest identifiable groups of 
assets and liabilities that generate cash inflows that are 
largely independent of the cash inflows from other assets or 
groups of assets.

Impaired assets are reviewed at each reporting date whether 
there is any indication that an impairment recognised in 
prior periods may no longer exist or may have decreased. If 
any such indication exists, the recoverable amount of that 
asset is estimated and may result in a reversal of impairment 
loss. The carrying amount of this asset is increased to its 
revised recoverable amount, provided that this amount 
does not exceed the carrying amount that would have been 
determined had no impairment loss been recognised for 
the asset in prior years. A reversal of impairment loss for an 
asset is recognised in profit or loss.

Finance costs principally represent interest expense and are 
recognised as incurred except when associated with major 
projects involving substantial development and construction 
periods. In addition, finance costs include losses arising on 
derecognition of finance liabilities at above their carrying 
value, unwinding of the discount on provisions and bank 
charges.

Interest expense and other borrowing costs directly 
attributable to major projects are added to the cost of the 
project assets until such time as the assets are substantially 
ready for their intended use or sale. Where funds are used 
to finance an asset form part of general borrowings, the 
amount capitalised is calculated using a weighted average 
of rates applicable to relevant general borrowings during the 
construction period.

Investment income earned on the temporary investment of 
specific borrowings pending their expenditure on qualifying 
assets is deducted from the borrowing costs eligible for 
capitalisation.

(s) Employee benefits

(i) Wages and salaries and annual leave

Liabilities for wages and salaries recognised in trade and 
other payables, and non-monetary benefits and annual leave 
recognised in provisions that are expected to be settled 
within 12 months of the reporting date, are classified as 
current liabilities in respect of employee services up to the 
reporting date. They are measured at the amounts expected 
to be paid when the liabilities are settled.

(ii) Long service leave

The liability for long service leave is recognised in provisions 
and measured as the present value of expected future 
payments to be made in respect of services provided by 
employees up to the reporting date. Consideration is given 
to expected future wage and salary levels, probability of 
employee departures and periods of service.

Expected future payments are discounted using market 
yields at the reporting date on Australian Government bonds 
with terms to maturity and currency that match, as closely 
as possible, the estimated future cash outflows. The liability 
for long service leave for which settlement within 12 months 
of the reporting date cannot be deferred is recognised in 
the current provision. The liability for long service leave 
for which settlement can be deferred beyond 12 months 
from the reporting date is recognised in the non-current 
provision.

FORTESCUE  FY23 ANNUAL REPORT    |    159

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Notes to the consolidated financial statements  
For the year ended 30 June 2023

OTHER

24 Summary of significant accounting policies (continued)

(w) Goods and Services Tax (GST) and other taxes on 
consumption

Revenues, expenses and assets are recognised net of the 
amount of associated consumptive tax, except where the 
amount of consumptive tax incurred is not recoverable 
from the taxation authority. In these circumstances the 
consumptive tax is recognised as part of the cost of 
acquisition of the asset or as part of an item of the expense. 
Receivables and payables in the statement of financial 
position are shown inclusive of consumptive tax. The net 
amount of consumptive tax recoverable from, or payable 
to, the taxation authority is included as a current asset or 
liability in the statement of financial position.

Cash flows are presented in the cash flow statement on a 
gross basis, except for the consumptive tax component of 
investing and financing activities, which is disclosed as an 
operating cash flow.

(x) Derivative financial instruments

From time to time, the Group holds derivative financial 
instruments to hedge its foreign currency and commodity 
price risk exposures. Derivatives are initially measured at 
fair value. Subsequent to initial recognition, derivatives are 
measured at fair value, and changes therein are generally 
recognised in profit or loss.

(y) Government grants

Grants from the government are recognised at their fair 
value where there is a reasonable assurance that the grant 
will be received and the Group will comply with all attached 
conditions. Government grants relating to costs are deferred 
and recognised in profit or loss as other income over the 
period necessary to match them with the costs that they 
are intended to compensate. Government grants relating to 
the purchase of property, plant and equipment are included 
in non-current liabilities as deferred income and they are 
credited to profit or loss as other income on a straight-line 
basis over the expected lives of the related assets.  

(z) Comparatives

Where applicable, certain comparatives have been adjusted 
to conform with current year presentation.

(t) Share-based payments

Share-based remuneration benefits are provided to 
employees under Fortescue’s share rights plan, as set out in 
note 18.

The fair value of rights is measured at grant date and is 
recognised as an employee benefits expense over the 
period during which the employees become unconditionally 
entitled to the rights, with a corresponding increase in equity.

The fair value at grant date is determined using an option 
pricing model that takes into account the exercise price, 
the term of the right, the impact of dilution, the share price 
at grant date and expected price volatility of the underlying 
share, the effect of additional market conditions, the 
expected dividend yield and the risk free interest rate for the 
term of the right. 

The fair value of the rights granted is measured to reflect 
expected market vesting conditions, but excludes the 
impact of any non-market vesting conditions (for example, 
profitability). Non-market vesting conditions are included 
in assumptions about the number of rights that are 
expected to become exercisable. At each reporting date, 
the entity revises its estimate of the number of rights that 
are expected to become exercisable. The employee benefit 
expense recognised each period takes into account the 
most recent estimate. The impact of the revision to original 
estimates, if any, is recognised in the income statement with 
a corresponding adjustment to equity.

(u) Dividends

Provision is made for the amount of any dividend declared, 
being appropriately authorised and no longer at the 
discretion of the Company, on or before the end of the 
reporting period but not distributed at the end of the 
reporting period.

(v) Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing net profit 
after tax attributable to the ordinary shareholders by the 
weighted average number of ordinary shares on issue during 
the financial year.

(ii) Diluted earnings per share

Diluted earnings per share is calculated by dividing net 
profit after tax attributable to the ordinary shareholders by 
the weighted average number of ordinary shares on issue 
during the financial year, after adjusting for the effects of 
all potential dilutive ordinary shares that were outstanding 
during the financial year.

FORTESCUE  FY23 ANNUAL REPORT    |    160

Financial reportNotes to the consolidated financial statements  
For the year ended 30 June 2023

OTHER

24 Summary of significant accounting policies (continued)

(aa) New accounting standards and interpretations

(i) New and amended standards adopted by the Group

The following new standards and amendments to standards are mandatory for the first time for the financial year beginning  
1 July 2022 and have been adopted by the Group:

Accounting standard

Description of change

 AASB 2020-3 
Amendments to 
Australian Accounting 
Standards – Annual 
Improvements 
2018–2020 and Other 
Amendments (AASB 
3, AASB 9, AASB 116 & 
AASB 137) 

•  AASB 9 Financial Instruments – clarifies which fees should be included in the 10% test for 

derecognition of financial liabilities. 

•  AASB 3 Business Combinations – updates the references to the Conceptual Framework for 
Financial Reporting and adds an exception for the recognition of liabilities and contingent 
liabilities within the scope of AASB 137 Provisions, Contingent Liabilities and Contingent 
Assets and Interpretation 21 Levies. The amendments also confirm that contingent assets 
should not be recognised at the acquisition date. 

•  AASB 116 Property, Plant and Equipment (PP&E) – prohibits an entity from deducting from 
the cost of an item of PP&E any proceeds received from selling items produced while the 
entity is preparing the asset for its intended use. It also clarifies that an entity is ‘testing 
whether the asset is functioning properly’ when it assesses the technical and physical 
performance of the asset. The financial performance of the asset is not relevant to this 
assessment. Entities must disclose separately the amounts of proceeds and costs relating to 
items produced that are not an output of the entity’s ordinary activities. 

•   AASB 137 – clarifies that the direct costs of fulfilling a contract include both the incremental 
costs of fulfilling the contract and an allocation of other costs directly related to fulfilling 
contracts. Before recognising a separate provision for an onerous contract, the entity 
recognises any impairment loss that has occurred on assets used in fulfilling the contract. 

These amendments had no impact on the consolidated financial statements of the Group.

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FORTESCUE  FY23 ANNUAL REPORT    |    161

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the consolidated financial statements  
For the year ended 30 June 2023

OTHER

24 Summary of significant accounting policies (continued)

(aa) New accounting standards and interpretations (continued)

(ii) New accounting standards and interpretations not yet adopted

Certain new accounting standards and interpretations have been published that are not mandatory for the 30 June 2023 
reporting period. Those that are applicable to Fortescue, and which may have an effect on the Group’s accounting policies, 
financial position or performance are disclosed below. These standards and interpretations have not been early adopted.

Accounting standard

Description of change

AASB 2020-1 
Amendments to 
Australian Accounting 
Standards–Classification 
of Liabilities as Current or 
Non-current

AASB 2021-2 
Amendments to 
Australian Accounting 
Standards–Disclosure of 
Accounting Policies and 
Definition of Accounting 
Estimates

AASB 2014-10  
Amendments to 
Australian Accounting 
Standards: Sale or 
Contribution of Assets 
Between an Investor and 
its Associate or Joint 
Venture 

AASB 2015-10 
Amendments to 
Australian Accounting 
Standards – Effective 
Date of Amendments to 
AASB 10 and AASB 128 

AASB 2017-5 and AASB 
2021 -7 Amendments to 
Australian Accounting 
Standards – Effective 
Date of Amendments to 
AASB 10 and AASB 128 
and Editorial Corrections

This amendment to AASB 101 Presentation of Financial Statements 
clarifies the requirements for classifying liabilities as current or  
non-current. They must be applied retrospectively in accordance with 
the normal requirements in AASB 108 Accounting Policies, Changes in 
Accounting Estimates and Errors.

The AASB amended AASB 101 to require entities to disclose their material 
rather than their significant accounting policies. The amendments define 
what is ‘material accounting policy information’ and explain how to identify 
when accounting policy information is material. They further clarify that 
immaterial accounting policy information does not need to be disclosed. 
If it is disclosed, it should not obscure material accounting information.  
To support this amendment, the AASB also amended AASB Practice 
Statement 2 Making Materiality Judgements to provide guidance on how 
to apply the concept of materiality to accounting policy disclosures.  

The amendment to AASB 108 Accounting Policies, Changes in Accounting 
Estimates and Errors clarifies how companies should distinguish 
changes in accounting policies from changes in accounting estimates. 
The distinction is important, because changes in accounting estimates 
are applied prospectively to future transactions and other future 
events, whereas changes in accounting policies are generally applied 
retrospectively to past transactions and other past events as well as the 
current period. 

The AASB has made limited scope amendments to AASB 10 Consolidated 
Financial Statements and AASB 128 Investments in Associates and Joint 
Ventures. The amendments clarify the accounting treatment for sales 
or contribution of assets between an investor and their associates or 
joint ventures. They confirm that the accounting treatment depends on 
whether the non-monetary assets sold or contributed to an associate 
or joint venture constitute a ‘business’ (as defined in AASB 3 Business 
Combinations). 

Application date

Standard: 1 
January 2024

Group: 1 July 
2024

Standard: 1 
January 2023

Group: 1 July 
2023

Standard: 1 
January 2023

Group: 1 July 
2023

Where the non-monetary assets constitute a business, the investor will 
recognise the full gain or loss on the sale or contribution of assets. If the 
assets do not meet the definition of a business, the gain or loss is recognised 
by the investor only to the extent of the other investor’s interests in the 
associate or joint venture. The amendments apply prospectively. 

Standard: 1 
January 2025

Group: 1 July 
2025

FORTESCUE  FY23 ANNUAL REPORT    |    162

Financial reportNotes to the consolidated financial statements  
For the year ended 30 June 2023

OTHER

25  Critical accounting estimates and judgements

(b) Exploration and evaluation expenditure - 
recoverable amount

Fortescue’s accounting policy for exploration and 
evaluation expenditure results in expenditure being 
capitalised for an area of interest where it is considered 
likely to be recoverable by future exploitation or sale 
or where the activities have not reached a stage which 
permits a reasonable assessment of the existence of 
reserves. This policy requires management to make 
certain estimates as to future events and circumstances, 
in particular whether an economically viable extraction 
operation can be established. Any such estimates and 
assumptions may change as new information becomes 
available. If, after having capitalised the expenditure 
under the policy, a judgement is made that recovery of the 
expenditure is unlikely, the relevant capitalised amount will 
be written off to the income statement.

(c) Development expenditure - recoverable amount

Development activities commence after commercial 
viability and technical feasibility of the project is 
established. Judgement is applied by management 
in determining when a project is commercially viable 
and technically feasible. In exercising this judgement, 
management is required to make certain estimates 
and assumptions as to future events. If, after having 
commenced the development activity, a judgement is 
made that a development asset is impaired, the relevant 
capitalised amount will be written off to the income 
statement.

The preparation of the consolidated financial statements 
requires management to make judgements and estimates 
and form assumptions that affect how certain assets, 
liabilities, revenue, expenses and equity are reported. 
At each reporting period, management evaluates its 
judgements and estimates based on historical experience 
and on other factors it believes to be reasonable under the 
circumstances, the results of which form the basis of the 
carrying values of assets and liabilities that are not readily 
apparent from other sources. Actual results may differ from 
these estimates under different assumptions and conditions.

Fortescue has identified the following critical accounting 
policies where significant judgements and estimates are 
made by management in the preparation of these financial 
statements.

(a) Iron ore reserve estimates

Iron ore reserves are estimates of the amount of product that 
can be economically and legally extracted from Fortescue’s 
current mining tenements. In order to calculate ore reserves, 
estimates and assumptions are required about a range 
of geological, technical and economic factors, including 
quantities, grades, production techniques, recovery rates, 
production costs, transport costs, commodity demand, 
commodity prices and exchange rates. Estimating the 
quantity and grade of ore reserves requires the size, shape 
and depth of ore bodies or fields to be determined by 
analysing geological data such as drilling samples. This 
requires complex and difficult geological judgements and 
calculations to interpret the data.

As economic assumptions used to estimate reserves change 
and as additional geological data is generated during the 
course of operations, estimates of reserves may vary from 
period to period. Changes in reported reserves may affect 
Fortescue’s financial results and financial position in a 
number of ways, including the following:

•   Asset carrying values may be affected due to changes in 

estimated future cash flows.

•   Depreciation and amortisation charges in the income 

statement may change where such charges are 
determined by the units of production method, or where 
the useful economic lives of assets change.

•   The carrying value of deferred tax assets may change 

due to changes in estimates of the likely recovery of tax 
benefits.

FORTESCUE  FY23 ANNUAL REPORT    |    163

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Notes to the consolidated financial statements  
For the year ended 30 June 2023

OTHER

25  Critical accounting estimates and judgements (continued)

(d) Property, plant and equipment – recoverable 
amount

The determination of FVLCD and value in use requires 
management to make estimates about expected production 
and sales volumes, commodity prices, reserves (see ‘iron 
ore reserve estimates’ above), operating costs, rehabilitation 
costs and future capital expenditure. Management also 
considers the impact of material climate-related risks, 
both transitional and physical, on estimates of future costs 
and useful lives of assets. Changes in circumstances may 
alter these projections, which may impact the recoverable 
amount of the assets. In such circumstances, some or all of 
the carrying value of the assets may be impaired and the 
impairment would be charged to the income statement.

(i) Iron Bridge CGU – recoverable amount

The Group has used the FVLCD approach to assess the 
recoverable amount of the Iron Bridge CGU (refer to note 
12(a)). The FVLCD is based on discounted cashflows using 
market-based exchange rates, commodity prices, expected 
pricing premiums, estimated quantities of recoverable 
resources, production levels, operating costs and capital 
requirements, and the cost of its eventual disposal, based 
on CGU budgets and latest Life of Mine (LoM) plans. Where 
appropriate, the fair value has included probability weighted 
scenarios in calculating inputs. These cash flows were 
discounted using a nominal post-tax discount rate that 
reflected current market assessments of the time value of 
money and the risks specific to the CGU.

Production outputs, recoverability of resources and 
operating and capital costs are based on both LoM plans 
and internal budgets. Mine closure and rehabilitation is 
based on a combination of internal estimates on disturbance 
(based on LoM) and independent experts estimates on fixed 
infrastructure decommissioning. 

(e) Rehabilitation estimates

Fortescue’s accounting policy for the recognition of 
rehabilitation provisions requires significant estimates 
including the magnitude of possible works required for the 
removal of infrastructure and of rehabilitation works, future 
cost of performing the work, the inflation and discount rates 
and the timing of cash flows. These uncertainties may result 
in future actual expenditure differing from the amounts 
currently provided.

(f) Revenue

(i) Revenue from iron ore sales

The transaction price at the date control passes for sales 
made subject to the provisional pricing mechanism is 
estimated with reference to quoted index prices. For sales 
where the final settlement price is yet to be determined, 
the value of this revenue is adjusted by considering tonnes 
subject to price finalisation at the end of the period and 
applying the closing spot rate.

(ii) Revenue from engineering services

Revenue from engineering services is recognised over time, 
as the services are provided to the customer, based on costs 
incurred for work performed to date as a percentage of total 
estimated costs under the contract or amounts billed as a 
percentage of the contract value. Judgements made that could 
have a significant effect on the financial report and estimates 
with a risk of adjustment in the next year are as follows:

• Determination of stage of completion

• Estimation of total contract revenue and contract costs

• Estimation of project completion date.

(g) Joint arrangements

Judgement is required to determine when the Group has 
joint control, which requires an assessment of the relevant 
activities and when the decisions in relation to those activities 
require unanimous consent. The Group has determined that 
the relevant activities for its joint arrangements relate to the 
operating and capital decisions of the arrangement, such 
as the approval of the capital expenditure program for each 
year. The considerations made in determining joint control 
are similar to those necessary to determine control over 
subsidiaries (refer to note 24(a)). 

Judgement is also required to classify a joint arrangement 
as either a joint operation or joint venture. Classifying the 
arrangement requires the Group to assess its rights and 
obligations arising from the arrangement. Specifically, it 
considers:

•  The structure of the joint arrangement – whether it is 

structured through a separate vehicle

•  When the arrangement is structured through a separate 

vehicle, the Group also considers the rights and obligations 
arising from:

-  the legal form of the separate vehicle

-  the terms of the contractual arrangement 

-  other facts and circumstances (when relevant).

This assessment often requires significant judgement, and 
a different conclusion on joint control, and also whether 
the arrangement is a joint operation or joint venture, may 
materially impact the accounting.

(h) Fair value measurement of financial assets

When the fair values of financial assets recorded in the 
statement of financial position cannot be measured based on 
quoted prices in active markets, their fair value is measured 
using valuation techniques including the discounted cash flow 
model. The inputs to these models are taken from observable 
markets where possible, but where this is not feasible, a 
degree of judgement is required in establishing fair values. 
Judgements include considerations of inputs such as liquidity 
risk, credit risk and volatility. Changes in assumptions relating 
to these factors could affect the reported fair value of financial 
instruments.

FORTESCUE  FY23 ANNUAL REPORT    |    164

Financial report 
 
 
DIRECTORS’ 
DECLARATION

DR ANDREW FORREST AO

In the Directors’ opinion: 

(a)   the financial statements and notes set out on pages 109 to 164 are in accordance with 

the Corporations Act 2001, including: 

  (i)   complying with Accounting Standards, the Corporations Regulations 2001 and other 

mandatory professional reporting requirements, and

  (ii)   giving a true and fair view of the consolidated entity’s financial position at 30 June 

2023 and of its performance for the year ended on that date, and

(b)   there are reasonable grounds to believe that the Company will be able to pay its debts 

as and when they become due and payable, and

(c)   at the date of this declaration, there are reasonable grounds to believe that the members 
of the extended closed group identified in note 20 will be able to meet any obligations or 
liabilities to which they are, or may become, subject to and by virtue of the deed of cross 
guarantee described in note 20.

Note 1(a) confirms that the financial statements comply with International Financial 
Reporting Standards as issued by the International Accounting Standards Board.

The Directors have been given the declaration by the Chief Executive Officers and Chief 
Financial Officer required by section 295A of the Corporations Act 2001. 

This declaration is made in accordance with a resolution of the Directors.

Dr Andrew Forrest AO 

Executive Chairman 

Dated in Perth this 28th day of August 2023.

FORTESCUE  FY23 ANNUAL REPORT    |    165

 
 
Auditor's independence declaration  
For the year ended 30 June 2023

Auditor’s Independence Declaration
As lead auditor for the audit of Fortescue Metals Group Ltd for the year ended 30 June 2023, I declare that to the best of my 
knowledge and belief, there have been: 

(a)   no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

(b)   no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Fortescue Metals Group Ltd and the entities it controlled during the period.

Chris Dodd 
Partner   

PricewaterhouseCoopers

Perth
28 August 2023

PricewaterhouseCoopers, ABN 52 780 433 757 
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840 
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

FORTESCUE  FY23 ANNUAL REPORT    |    166

   PricewaterhouseCoopers, ABN 52 780 433 757 Brookfield Place, 125 St Georges Terrace, PERTH  WA  6000, GPO Box D198, PERTH  WA  6840 T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au Liability limited by a scheme approved under Professional Standards Legislation.   Independent auditor’s report To the members of Fortescue Metals Group Ltd Report on the audit of the financial report Our opinion In our opinion: The accompanying financial report of Fortescue Metals Group Ltd (the Company) and its controlled entities (together the Group) is in accordance with the Corporations Act 2001, including: (a) giving a true and fair view of the Group's financial position as at 30 June 2021 and of its financial performance for the year then ended, and  (b) complying with Australian Accounting Standards and the Corporations Regulations 2001. What we have audited The Group financial report comprises: • the consolidated statement of financial position as at 30 June 2021 • the consolidated statement of comprehensive income for the year then ended • the consolidated statement of changes in equity for the year then ended • the consolidated statement of cash flows for the year then ended • the consolidated income statement for the year then ended • the notes to the consolidated financial statements, which include significant accounting policies and other explanatory information, and • the directors’ declaration. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.  
Independent auditor’s report   
For the year ended 30 June 2023

Independent auditor’s report
To the members of Fortescue Metals Group Ltd

Report on the audit of the financial report

Our opinion
In our opinion:

The accompanying financial report of Fortescue Metals Group Ltd (the Company) and its controlled entities (together the 
Group or Fortescue) is in accordance with the Corporations Act 2001, including:

(a)  giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its financial performance for the 

year then ended, and 

(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.

What we have audited

The Group financial report comprises:

•  the consolidated statement of financial position as at 30 June 2023

•  the consolidated income statement for the year then ended

•  the consolidated statement of comprehensive income for the year then ended

•  the consolidated statement of cash flows for the year then ended

•  the consolidated statement of changes in equity for the year then ended

•  the notes to the consolidated financial statements, which include significant accounting policies and other explanatory 

information

•  the directors’ declaration.

Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are 
further described in the Auditor’s responsibilities for the audit of the financial report section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 
2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for 
Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report 
in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

PricewaterhouseCoopers, ABN 52 780 433 757 
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840 
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

FORTESCUE  FY23 ANNUAL REPORT    |    167

   PricewaterhouseCoopers, ABN 52 780 433 757 Brookfield Place, 125 St Georges Terrace, PERTH  WA  6000, GPO Box D198, PERTH  WA  6840 T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au Liability limited by a scheme approved under Professional Standards Legislation.   Independent auditor’s report To the members of Fortescue Metals Group Ltd Report on the audit of the financial report Our opinion In our opinion: The accompanying financial report of Fortescue Metals Group Ltd (the Company) and its controlled entities (together the Group) is in accordance with the Corporations Act 2001, including: (a) giving a true and fair view of the Group's financial position as at 30 June 2021 and of its financial performance for the year then ended, and  (b) complying with Australian Accounting Standards and the Corporations Regulations 2001. What we have audited The Group financial report comprises: • the consolidated statement of financial position as at 30 June 2021 • the consolidated statement of comprehensive income for the year then ended • the consolidated statement of changes in equity for the year then ended • the consolidated statement of cash flows for the year then ended • the consolidated income statement for the year then ended • the notes to the consolidated financial statements, which include significant accounting policies and other explanatory information, and • the directors’ declaration. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. Independent auditor’s report   
For the year ended 30 June 2023

Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from material misstatement. 
Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could 
reasonably be expected to influence the economic decisions of users taken on the basis of the financial report.

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial 
report as a whole, taking into account the geographic and management structure of the Group, its accounting processes 
and controls and the industry in which it operates.

Materiality

Key audit 
matters

Audit scope

  Materiality

•  For the purpose of our audit we used overall Group materiality of US$495 million, which represents approximately 5% of 

the Group’s weighted average profit before tax for the current and previous two years, adjusting for infrequently occurring 
items, including impairment expense recognised in the current year.

•  We applied this threshold, together with qualitative considerations, to determine the scope of our audit and the nature, 
timing and extent of our audit procedures and to evaluate the effect of misstatements on the financial report as a whole.

•  We chose adjusted Group profit before tax because, in our view, it is the benchmark against which the performance of 
the Group is most commonly measured. We applied a three year weighted average to address potential volatility in the 
calculation of materiality that arises from iron ore price fluctuations between years.

•  We utilised a 5% threshold based on our professional judgement, noting it is within the range of commonly acceptable 

thresholds. 

  Audit Scope

•  Our audit focused on where the Group made subjective judgements; for example, significant accounting estimates 

involving assumptions and inherently uncertain future events.

•  The primary activity of the Group is the operation of integrated iron ore mining operations and infrastructure comprising 

various iron ore mines in the Pilbara region of Western Australia, a rail network and port facilities in Port Hedland. 
Additionally, the Group is developing and acquiring green energy technologies and projects through the activities of the 
Fortescue Energy operating segment. Our audit procedures were predominantly performed in Perth, where many of the 
Corporate and Group Operations functions are centralised. This was supported by visits to Fortescue’s mining operations.

FORTESCUE  FY23 ANNUAL REPORT    |    168

   PricewaterhouseCoopers, ABN 52 780 433 757 Brookfield Place, 125 St Georges Terrace, PERTH  WA  6000, GPO Box D198, PERTH  WA  6840 T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au Liability limited by a scheme approved under Professional Standards Legislation.   Independent auditor’s report To the members of Fortescue Metals Group Ltd Report on the audit of the financial report Our opinion In our opinion: The accompanying financial report of Fortescue Metals Group Ltd (the Company) and its controlled entities (together the Group) is in accordance with the Corporations Act 2001, including: (a) giving a true and fair view of the Group's financial position as at 30 June 2021 and of its financial performance for the year then ended, and  (b) complying with Australian Accounting Standards and the Corporations Regulations 2001. What we have audited The Group financial report comprises: • the consolidated statement of financial position as at 30 June 2021 • the consolidated statement of comprehensive income for the year then ended • the consolidated statement of changes in equity for the year then ended • the consolidated statement of cash flows for the year then ended • the consolidated income statement for the year then ended • the notes to the consolidated financial statements, which include significant accounting policies and other explanatory information, and • the directors’ declaration. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. Independent auditor’s report   
For the year ended 30 June 2023

Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial 
report for the current period. The key audit matters were addressed in the context of our audit of the financial report as a whole, 
and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Further, any commentary on 
the outcomes of a particular audit procedure is made in that context. We communicated the key audit matters to the Audit, Risk 
Management and Sustainability Committee.

Key audit matter

How our audit addressed the key audit matter

Impairment assessment of the Iron Bridge Cash Generating Unit (CGU)
Refer to note 12 and 25(d)

In accordance with Australian Accounting Standards 
and internal policies, Fortescue is required to assess at 
each reporting date whether there is any indication that 
its assets may be impaired. During the financial year, it 
was determined that indicators of impairment existed 
in relation to their Iron Bridge CGU. Accordingly, an 
impairment assessment was completed which resulted 
in an impairment expense of US$1,037 million being 
recognised in other expenses. 

The recoverable amount of the CGU was determined 
using the higher of value in use (being the net present 
value of expected future cash flows of the CGU in 
its current condition) and the fair value less cost of 
disposal (‘Fair Value’). The Group has used the Fair Value 
methodology.

The Group prepared a discounted cash flow model in 
determining the recoverable amount of the CGU which 
involved the estimation of several assumptions as 
described in note 25(d).

The impairment assessment of the Iron Bridge CGU was a 
key audit matter given the significance of the CGU assets 
to the consolidated statement of financial position and the 
level of judgement involved in forming the estimates used 
in determining the recoverable amount and whether an 
impairment is required.

We performed the following audit procedures, amongst 
others, over the impairment assessment of the Iron Bridge 
CGU:

•  We developed our understanding of the process by which 

the cash flow forecasts were prepared to assess the 
recoverable amount of the CGU.

•  We have assessed the mathematical accuracy and logic 
of the discounted cash flow model and have assessed 
whether the methodology utilised to determine the 
recoverable amount was consistent with Australian 
Accounting Standards.

•  We have assessed the reasonableness of the CGU by 

determining whether the included assets, liabilities and 
cash flows are directly attributable to the CGU, and in 
line with our knowledge of the Group’s operations and in 
accordance with Australian Accounting Standards.

•  We have evaluated the Group’s historical ability to 

forecast future cash flows by comparing budgets with 
reported actual results for the past year.

•  We assessed the appropriateness of the significant 

assumptions used, including assessing:

-  The forecasted product price assumptions, by 

comparing them to analysis performed by external 
parties, and comparing them to economic and industry 
forecasts 

-  Whether the operating cost forecasts are consistent 

with the most up-to-date budgets and life of mine; and

-  The discount rate used, by assessing the cost of capital 

for the Group, assisted by PwC valuations experts, 
and comparing the rate to market data and industry 
research.

•  We have assessed the reasonableness of the disclosures 
made in the financial report against the requirements of 
Australian Accounting Standards.

FORTESCUE  FY23 ANNUAL REPORT    |    169

   PricewaterhouseCoopers, ABN 52 780 433 757 Brookfield Place, 125 St Georges Terrace, PERTH  WA  6000, GPO Box D198, PERTH  WA  6840 T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au Liability limited by a scheme approved under Professional Standards Legislation.   Independent auditor’s report To the members of Fortescue Metals Group Ltd Report on the audit of the financial report Our opinion In our opinion: The accompanying financial report of Fortescue Metals Group Ltd (the Company) and its controlled entities (together the Group) is in accordance with the Corporations Act 2001, including: (a) giving a true and fair view of the Group's financial position as at 30 June 2021 and of its financial performance for the year then ended, and  (b) complying with Australian Accounting Standards and the Corporations Regulations 2001. What we have audited The Group financial report comprises: • the consolidated statement of financial position as at 30 June 2021 • the consolidated statement of comprehensive income for the year then ended • the consolidated statement of changes in equity for the year then ended • the consolidated statement of cash flows for the year then ended • the consolidated income statement for the year then ended • the notes to the consolidated financial statements, which include significant accounting policies and other explanatory information, and • the directors’ declaration. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. Independent auditor’s report   
Independent auditor’s report   
For the year ended 30 June 2023
For the year ended 30 June 2023

Key audit matter

How our audit addressed the key audit matter

Operating sales revenue – iron ore and shipping revenue
Refer to note 3 and 25(f) 

The Group recognised iron ore revenue of US$15,318 
million and shipping revenue of US$1,356 million for the 
year ended 30 June 2023.

Fortescue’s sales contracts may be provisionally priced 
at the initial revenue recognition (bill of lading) date, with 
the final settlement price based on a pre-determined 
quotation period. Operating sales revenue from these 
contracts each comprise two parts:

(i)   Iron ore revenue and shipping revenue recognised at 

the bill of lading date at current prices; and

(ii)  Provisional pricing adjustments which represent any 
difference between the revenue recognised at the bill 
of lading date and the final settlement price.

This is a key audit matter given the significance of iron 
ore and shipping revenue to the consolidated income 
statement. These factors combine to make this area a key 
audit matter.

We performed the following audit procedures, amongst 
others, over iron ore and shipping revenue:

•  We performed tests on a sample basis of IT systems 

and key controls involved in the calculation of iron ore 
and shipping revenue, including provisional pricing 
adjustments to revenue.

•  We performed analytical procedures over iron ore 

and shipping revenue, including provisional pricing 
adjustments. We compared revenue recognised with 
relevant external price indices and external data over 
Fortescue’s shipped tonnes.

•  For a sample of sales contracts open at balance date, we 
inspected the sales contracts and assessed key terms of 
the sale including the volume of sales and duration of any 
quotation period.

•  Compared journal entries to supporting documentation 
for a selection based on risk, including those posted at 
period-end which impact iron ore and shipping revenue.

•  For a sample of sales contracts with provisional pricing 

adjustments recorded during the year, we confirmed that 
the provisional pricing adjustments were appropriately 
presented within the financial statements by reconciling 
the separately recorded amounts to invoices.

Restoration and rehabilitation obligations
Refer to note 13 and 25(e)

The Group recognised provisions for restoration and 
rehabilitation obligations of US$1,063 million as at 30 June 
2023. 

To assess the Group’s restoration and rehabilitation 
obligations, we performed the following audit procedures, 
amongst others: 

This is a key audit matter as the calculation of these 
provisions requires judgement by the Group in estimating 
the magnitude of possible works required for the removal of 
infrastructure and rehabilitation activities, the future cost of 
performing the work, when rehabilitation activities will take 
place, and the economic assumptions such as inflation and 
discount rates applied to future liabilities. 

The judgement required by the Group to estimate such 
costs is made in circumstances where there has been 
limited restoration and rehabilitation activity or historical 
precedent against which to benchmark estimates of future 
costs. These factors combine to make this area a key audit 
matter. 

•  Developed an understanding of how the Group identified 
the relevant methods, assumptions, and sources of data, 
that are appropriate for developing the closure plans and 
associated cost estimates in the context of the Australian 
Accounting Standards. 

•  Developed an understanding of the relevant control 

activities associated with developing the closure plans 
and associated cost estimates. 

•  We checked the mathematical accuracy of calculations 
underlying the rehabilitation obligations on a sample 
basis, and whether the timing of cash flows within the 
calculations were consistent with latest life of mine plans.

•  Assessed whether the discount rates used in the 

rehabilitation calculations were reasonable by comparing 
them to market data.

•  Compared significant assumptions used in the closure 

plans and associated cost estimates to other similar costs 
in the business or external data where appropriate.

•  We assessed provision movements in the year relating 

to restoration and rehabilitation obligations to determine 
whether they were consistent with our understanding 
of the Group’s operations and associated rehabilitation 
plans.

FORTESCUE  FY23 ANNUAL REPORT    |    170

   PricewaterhouseCoopers, ABN 52 780 433 757 Brookfield Place, 125 St Georges Terrace, PERTH  WA  6000, GPO Box D198, PERTH  WA  6840 T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au Liability limited by a scheme approved under Professional Standards Legislation.   Independent auditor’s report To the members of Fortescue Metals Group Ltd Report on the audit of the financial report Our opinion In our opinion: The accompanying financial report of Fortescue Metals Group Ltd (the Company) and its controlled entities (together the Group) is in accordance with the Corporations Act 2001, including: (a) giving a true and fair view of the Group's financial position as at 30 June 2021 and of its financial performance for the year then ended, and  (b) complying with Australian Accounting Standards and the Corporations Regulations 2001. What we have audited The Group financial report comprises: • the consolidated statement of financial position as at 30 June 2021 • the consolidated statement of comprehensive income for the year then ended • the consolidated statement of changes in equity for the year then ended • the consolidated statement of cash flows for the year then ended • the consolidated income statement for the year then ended • the notes to the consolidated financial statements, which include significant accounting policies and other explanatory information, and • the directors’ declaration. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. Independent auditor’s report   
For the year ended 30 June 2023

Other information
The directors are responsible for the other information. The other information comprises the information included in the 
annual report for the year ended 30 June 2023, but does not include the financial report and our auditor’s report thereon.

Our opinion on the financial report does not cover the other information and accordingly we do not express any form 
of assurance conclusion thereon through our opinion on the financial report. We have issued a separate opinion on the 
remuneration report and a limited assurance conclusion on the Green Bond Eligible Project allocation included in pages 43 to 
44 of the operating and financial review section of the annual report.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider 
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or 
otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we 
conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to 
report in this regard.

Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in 
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors 
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material 
misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going 
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless 
the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material 
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance 
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing 
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are 
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions 
of users taken on the basis of the financial report.

A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance 
Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of 
our auditor's report.

Report on the remuneration report

Our opinion on the remuneration report
We have audited the remuneration report included in pages 74 to 108 of the directors’ report for the year ended 30 June 2023.

In our opinion, the remuneration report of Fortescue Metals Group Ltd for the year ended 30 June 2023 complies with section 
300A of the Corporations Act 2001.

Responsibilities
The directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance 
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based 
on our audit conducted in accordance with Australian Auditing Standards.

PricewaterhouseCoopers

Chris Dodd 
Partner   

FORTESCUE  FY23 ANNUAL REPORT    |    171

Perth
28 August 2023

   PricewaterhouseCoopers, ABN 52 780 433 757 Brookfield Place, 125 St Georges Terrace, PERTH  WA  6000, GPO Box D198, PERTH  WA  6840 T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au Liability limited by a scheme approved under Professional Standards Legislation.   Independent auditor’s report To the members of Fortescue Metals Group Ltd Report on the audit of the financial report Our opinion In our opinion: The accompanying financial report of Fortescue Metals Group Ltd (the Company) and its controlled entities (together the Group) is in accordance with the Corporations Act 2001, including: (a) giving a true and fair view of the Group's financial position as at 30 June 2021 and of its financial performance for the year then ended, and  (b) complying with Australian Accounting Standards and the Corporations Regulations 2001. What we have audited The Group financial report comprises: • the consolidated statement of financial position as at 30 June 2021 • the consolidated statement of comprehensive income for the year then ended • the consolidated statement of changes in equity for the year then ended • the consolidated statement of cash flows for the year then ended • the consolidated income statement for the year then ended • the notes to the consolidated financial statements, which include significant accounting policies and other explanatory information, and • the directors’ declaration. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. CORPORATE 
DIRECTORY
2023

09

The unique 
Values driving 
performance

TOP 20 HOLDERS OF ORDINARY SHARES AT 21 AUGUST 2023

Rank

Name

 Shares number

% of issued capital

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

HSBC Custody Nominees (Australia) Limited 

J P Morgan Nominees Australia Pty Limited 

Valin Investments (Singapore) Pte Ltd 

Tattarang Pty Ltd

Citicorp Nominees Pty Limited 

Emichrome Pty Ltd 

BNP Paribas Noms Pty Ltd

Valin Resources Investments (Singapore) Pte Ltd 

National Nominees Limited 

Pacific Custodians Pty Limited

Citicorp Nominees Pty Limited

Pacific Custodians Pty Limited

BNP Paribas Nominees Pty Ltd ACF Clearstream 

HSBC Custody Nominees (Australia) Limited

Invia Custodian Pty Limited

Citicorp Nominees Pty Limited

BNP Paribas Nominees Pty Ltd

Merrill Lynch (Australia) Nominees Pty Limited 

HSBC Custody Nominees (Australia) Limited

20

Mr John William Cunningham 

1,482,035,717

406,988,264

228,007,497

117,580,521

105,987,655

93,045,000

40,912,996

37,876,216

26,253,495

16,843,421

15,711,741

15,710,557

14,157,242

11,554,788

8,244,951

5,653,649

4,659,448

4,119,589

4,062,741

4,000,000

48.13

13.22

7.41

3.82

3.44

3.02

1.33

1.23

0.85

0.55

0.51

0.51

0.46

0.38

0.27

0.18

0.15

0.13

0.13

0.13

Substantial holders
    Rank           Name

2,643,405,488

85.85

Shares number

% of issued capital

1

2

3

Tattarang Pty Ltd, Minderoo Foundation Limited, Nicola 
Margaret Forrest and John Andrew Henry Forrest 

Hunan Valin Iron and Steel Group Company

The Capital Group Companies, Inc

1,131,365,000

267,395,477

244,454,405

36.74

8.68

7.94

Range 

1 to 1,000

1,001 to 5,000

5,001 to 10,000

10,001 to 100,000

100,001 and Over

Total

Shareholders number

109,639

42,697

8,120

5,652

289

166,397

Unmarketable parcels
There were 3,750 members holding less than a marketable parcel of share in the Company.

FORTESCUE  FY23 ANNUAL REPORT    |    173

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To: The Board of Directors of Fortescue Metals Group Ltd

Independent Limited Assurance Report on identified Subject  
Matter Information in Fortescue Metals Group Ltd’s FY23 Annual Report
The Board of Directors of Fortescue Metals Group Ltd engaged us to perform an independent limited assurance 
engagement in respect of the Eligible Project Cumulative Spend as at 30 June 2023 (the ‘Subject Matter Information’), as 
listed in Fortescue Metals Group Ltd (the Company) and its controlled entities’ (together the Group) FY23 Annual Report.

Subject Matter Information and Criteria
We assessed the Subject Matter Information against the Criteria. The Subject Matter Information needs to be read and 
understood together with the Criteria. The Subject Matter Information is set out in the table below.

Auditor’s Independence Declaration 
As lead auditor for the audit of Fortescue Metals Group Ltd for the year ended 30 June 2021, I declare 
that to the best of my knowledge and belief, there have been:  

Cumulative Spend as  
at 30 June 2023
US$m

(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in

relation to the audit; and

(b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Fortescue Metals Group Ltd and the entities it controlled during the 
period. 

Table 1 – Subject Matter Information

Eligible Project

Eligible Category

Fortescue WAE battery systems

Energy storage

Pilbara Generation Project

Pilbara Transmission Project

Green Fleet Energy Hub

Battery Electric Locomotives

Total allocated

Renewable energy

Renewable energy

Clean transportation

Clean transportation

205

76

60

58

15

414

Justin Carroll 
Partner 
PricewaterhouseCoopers 

Perth 

30 August 2021 

The Criteria used by Fortescue Metals Group Ltd to prepare the Subject Matter Information is the basis of preparation set out 
on pages 43 to 44 of the Operating and financial review in the Fortescue FY23 Annual Report (the ‘Criteria’).

The maintenance and integrity of Fortescue Metals Group Ltd’s website is the responsibility of the Group’s management; the 
work carried out by us does not involve consideration of these matters and, accordingly, we accept no responsibility for any 
changes that may have occurred to the reported Subject Matter Information or Criteria when presented on Fortescue Metals 
Group Ltd’s website.

Our assurance conclusion is with respect to the Subject Matter Information as at 30 June 2023, and does not extend to any 
other information included in, or linked from, the Fortescue FY23 Annual Report including any images, audio files or videos.

Responsibilities of Management
The Group’s management is responsible for the preparation of the Subject Matter Information in accordance with the 
Criteria. This responsibility includes: 

•  determining appropriate reporting topics and selecting or establishing suitable criteria for measuring, evaluating and 

preparing the underlying Subject Matter Information; 

•  ensuring that those criteria are relevant and appropriate to Fortescue Metals Group Ltd and the intended users; and
•  designing, implementing and maintaining systems, processes and internal controls over information relevant to the 

evaluation or measurement of the Subject Matter Information, which is free from material misstatement, whether due to 
fraud or error, against the Criteria.

Our independence and quality control
We have complied with the ethical requirements of the Accounting Professional and Ethical Standard Board’s APES 110 Code 
of Ethics for Professional Accountants (including Independence Standards) relevant to assurance engagements, which 
are founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and 
professional behaviour.

Our firm applies Australian Standard on Quality Management ASQM 1, Quality Management for Firms that Perform Audits 
or Reviews of Financial Reports and Other Financial Information, or Other Assurance or Related Services Engagements, 
which requires the firm to design, implement and operate a system of quality management including policies or procedures 
regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

PricewaterhouseCoopers, ABN 52 780 433 757 
Brookfield Place, 125 St Georges Terrace, PERTH  WA  6000, GPO Box D198, PERTH  WA  6840 
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au 

Liability limited by a scheme approved under Professional Standards Legislation. 

PricewaterhouseCoopers, ABN 52 780 433 757 
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840 
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

FORTESCUE  FY23 ANNUAL REPORT    |    174

DRAFTOur responsibilities
Our responsibility is to express a limited assurance conclusion based on the procedures  
we have performed and the evidence we have obtained.

Our engagement has been conducted in accordance with the Australian Standard on Assurance Engagements (ASAE 3000) 
Assurance Engagements Other Than Audits or Reviews of Historical Financial Information. That standard requires that we plan 
and perform this engagement to obtain limited assurance about whether anything has come to our attention to indicate that the 
Subject Matter Information has not been prepared as at 30 June 2023, in all material respects, in accordance with the Criteria.

The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for, 
a reasonable assurance engagement and consequently the level of assurance obtained in a limited assurance engagement 
is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been 
performed. Accordingly, we do not express a reasonable assurance opinion.

Auditor’s Independence Declaration 
As lead auditor for the audit of Fortescue Metals Group Ltd for the year ended 30 June 2021, I declare 
that to the best of my knowledge and belief, there have been:  

(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in

relation to the audit; and

In carrying out our limited assurance engagement we:

(b) no contraventions of any applicable code of professional conduct in relation to the audit.

•  made inquiries of the persons responsible for the Subject Matter Information;
•  obtained an understanding of the process for collecting and reporting the Subject Matter Information and obtaining 

This declaration is in respect of Fortescue Metals Group Ltd and the entities it controlled during the 
period. 

supporting evidence to assess the eligibility of the project against the Group’s Sustainability Financing Framework (as 
announced on 9 November 2021);

•  obtained supporting evidence to assess the allocation of green bonds proceeds to eligible projects;
•  performed limited substantive testing on a selective basis of the Subject Matter Information to assess that data had been 

appropriately measured, recorded, collated and reported; and

•  considered the disclosure and presentation of the Subject Matter Information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.

Justin Carroll 
Partner 
PricewaterhouseCoopers 

Perth 

30 August 2021 

Inherent limitations
Inherent limitations exist in all assurance engagements due to the selective testing of the information being examined. It is 
therefore possible that fraud, error or non-compliance may occur and not be detected. A limited assurance engagement is not 
designed to detect all instances of non-compliance of the Subject Matter Information with the Criteria, as it is limited primarily to 
making enquiries of the Group’s management and applying analytical procedures.

Additionally, non-financial data may be subject to more inherent limitations than financial data, given both its nature and the 
methods used for determining, calculating and estimating such data. The precision of different measurement techniques may 
also vary. The absence of a significant body of established practice on which to draw to evaluate and measure non-financial 
information allows for different, but acceptable, evaluation and measurement techniques that can affect comparability between 
entities and over time.

The limited assurance conclusion expressed in this report has been formed on the above basis.

Our limited assurance conclusion
Based on the procedures we have performed, as described under ‘Our responsibilities’ and the evidence we have obtained, 
nothing has come to our attention that causes us to believe that the Subject Matter Information as at 30 June 2023, has not been 
prepared, in all material respects, in accordance with the Criteria.

Use and distribution of our report
We were engaged by the board of directors of Fortescue Metals Group Ltd to prepare this independent assurance report having 
regard to the criteria specified by the Group and set out in the basis of preparation set out on pages 43 to 44 of the Operating 
and financial review in the Fortescue FY23 Annual Report. This report was prepared solely for Fortescue Metals Group Ltd 
to assist the directors in responding to their governance responsibilities by obtaining an independent assurance report in 
connection with the Subject Matter Information.

PricewaterhouseCoopers, ABN 52 780 433 757 
Brookfield Place, 125 St Georges Terrace, PERTH  WA  6000, GPO Box D198, PERTH  WA  6840 
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au 

Liability limited by a scheme approved under Professional Standards Legislation. 

We accept no duty, responsibility or liability to anyone other than Fortescue Metals Group Ltd in connection with this report or 
to Fortescue Metals Group Ltd for the consequences of using or relying on it for a purpose other than that referred to above. We 
make no representation concerning the appropriateness of this report for anyone other than Fortescue Metals Group Ltd and if 
anyone other than Fortescue Metals Group Ltd chooses to use or rely on it they do so at their own risk.

This disclaimer applies to the maximum extent permitted by law and, without limitation, to liability arising in negligence or under 
statute and even if we consent to anyone other than Fortescue Metals Group Ltd receiving or using this report.

PricewaterhouseCoopers

Chris Dodd 
Partner   

FORTESCUE  FY23 ANNUAL REPORT    |    175

Perth 
28 August 2023

DRAFTGLOSSARY

Australian Accounting Standards 
Australian Accounting Standards are 
developed, issued and maintained by 
the Australian Accounting Standards 
Board, an Australian Government 
agency under the Australian Securities 
and Investments Commission Act 2001.

ASX 
Australian Securities Exchange.

Beneficiation
Beneficiation is a process whereby ore 
is pulverised into fine particles and the 
higher grade material is separated, 
often magnetically, from the gangue 
(waste).

bt
Billion tonnes.

C1 Costs
Operating costs of mining, processing, 
rail and port on a per tonne basis, 
including allocation of direct 
administration charges and production 
overheads.

CFR
A delivery term that indicates that the 
shipment price includes the cost of 
goods, freight costs and marine costs 
associated with a particular delivery.

Chichester Hub
Fortescue’s mining hub with two 
operating iron ore mines, Cloudbreak 
and Christmas Creek.

CID
Channel Iron Deposit.

CO2-eq 
Not all greenhouse gases warm the 
atmosphere equally. Some gases have 
a greater global warming potential, or 
warming effect, than carbon dioxide. 
To account for this, the term CO2-eq 
is used and means that greenhouse 
gases other than carbon dioxide have 
been converted to the equivalent 
amount of CO2. This provides for a 
single, uniform means of measuring 
emissions reductions for multiple 
greenhouse gases.

Contractors 
Non-Fortescue employees, working 
with the Company to support specific 
business activities.

Corporations Act 
Corporations Act 2001 of the 
Commonwealth of Australia.

Direct employees 
Total number of employees including 
permanent, fixed term and part-time. 
Does not include contractors.

dmt 
Dry metric tonne.

Fe 
The chemical symbol for iron.

FFI 
Fortescue Future Industries Pty Ltd.

FIFO 
Fly-in fly-out is defined as 
circumstances of work where the place 
of work is sufficiently isolated from the 
worker’s place of residence to make 
daily commute impractical.

Fortescue 
Fortescue Metals Group Limited  
(ACN 002 594 872) and its subsidiaries.

Fortescue blend 
A blend of ore from Christmas Creek 
and Firetail mines, with an iron grade of 
58.2% Fe. 

Fortescue River Gas Pipeline 
A 270 kilometre gas pipeline which 
delivers natural gas from the Dampier 
to Bunbury Pipeline to the main power 
station in the Solomon Hub.

FY 
Refers to a financial year, end 30 June.

Gearing 
Debt / (debt + equity).

Green ammonia
Ammonia is widely used to make 
fertiliser, but most ammonia today is 
made from fossil fuels. Green ammonia, 
in contrast, 100 per cent renewable. 
One way to make green ammonia is 
via the Haber Bosch process. Green 
hydrogen and nitrogen that has been 
extracted from the air are reacted 
together during a process powered by 
renewable electricity to produce green 
ammonia, or NH3. 

Green hydrogen
Green hydrogen is hydrogen produced 
via electrolysis of water. Electrolysis 
splits the water molecule into its 
constituents, hydrogen and oxygen. 
The process must be powered by 
renewable electricity for the hydrogen 
to be defined as green.

Green iron
Iron ore that has been converted 
into iron (a) without the use of coal 
or any other fossil fuel and (b) using 
renewable electricity and, in some 
cases, green hydrogen.

Green iron ore
Iron ore that has been mined without 
the use of fossil fuels, i.e. using haul 
trucks and other equipment that runs 
on battery-electric or green hydrogen 
based technologies. 

Green metals
Metals mined using renewable energy. 
Critical minerals are not inherently green 
unless they are mined in this way.

Green metallic iron
Metallic iron made through the reduction 
of iron ore using 100% renewable energy 
and no fossil fuels.

Green shipping fuels
Shipping fuels made without using fossil 
fuels, such as green ammonia.

Green steel
Steel made using green iron, powered by 
100% renewable energy. 

Ha 
Hectares.

Hematite 
An iron ore compound with an average 
iron content of between 57% and 63% 
Fe. Hematite deposits are typically large, 
close to the surface and mined via open 
pits.

Indigenous Land Use Agreement (ILUA)
Statutory agreement between a native 
title group and others about the use of 
land and waters.

Indicated Mineral Resource 
An ‘Indicated Mineral Resource’ is that 
part of a Mineral Resource for which 
quantity, grade (or quality), densities, 
shape and physical characteristics are 
estimated with sufficient confidence 
to allow the application of Modifying 
Factors in sufficient detail to support 
mine planning and evaluation of the 
economic viability of the deposit. 
Geological evidence is derived from 
adequately detailed and reliable 
exploration, sampling and testing 
gathered through appropriate 
techniques from locations such as 
outcrops, trenches, pits, workings 
and drill holes, and is sufficient to 
assume geological and grade (or 
quality) continuity between points of 
observation where data and samples are 
gathered. An Indicated Mineral Resource 
has a lower level of confidence than 
that applying to a Measured Mineral 
Resource and may only be converted to 
a Probable Ore Reserve. 

FORTESCUE  FY23 ANNUAL REPORT    |    176

Corporate directoryInferred Mineral Resource 
An ‘Inferred Mineral Resource’ is that 
part of a Mineral Resource for which 
quantity and grade (or quality) are 
estimated on the basis of limited 
geological evidence and sampling. 
Geological evidence is sufficient 
to imply but not verify geological 
and grade (quality) continuity. It is 
based on exploration, sampling and 
testing information gathered through 
appropriate techniques from locations 
such as outcrops, trenches, pits, 
workings and drill holes. 

An Inferred Mineral Resource has a 
lower level of confidence than that 
applying to an Indicated Mineral 
Resource and must not be converted 
to an Ore Reserve. It is reasonably 
expected that the majority of Inferred 
Mineral Resources could be upgraded 
to Indicated Mineral Resources with 
continued exploration. 

International Financial Reporting 
Standards
International Financial Reporting 
Standards (IFRS) is a single set of 
accounting standards, developed 
and maintained by the International 
Accounting Standards Board with the 
intention of those standards being 
capable of being applied on a globally 
consistent basis.

IUCN 
International Union for Conservation  
of Nature.

JORC Code 
The Australasian Code for Reporting of 
Exploration Results, Mineral Resources 
and Ore Reserves 2012 Edition, each 
prepared by the Joint Ore Reserves 
Committee of the Australian Institute 
of Mining and Metallurgy, Australian 
Institute of Geoscientists and Mineral 
Council of Australia, as amended or 
supplemented from time to time.

Kings CID Fines
Fortescue’s standalone product 
produced from Channel Iron  
Deposit Ore from its Kings Valley 
mine in the Solomon Hub, with an iron 
content of 57.3% Fe.

KMP
Key management personnel are 
those persons having authority and 
responsibility for planning, directing 
and controlling the activities of the 
entity, directly or indirectly, including 
any director (whether executive or 
otherwise) of that entity.

Magnetite 
An iron ore compound that is typically a 
lower grade ore than hematite iron ore 
because of a lower iron content.

Magnetite ore requires significant 
beneficiation to form a saleable 
concentrate. After beneficiation, 
Magnetite ore can be pelletised for 
direct use as a high-grade raw material 
for steel production.

Measured Mineral Resource 
A ‘Measured Mineral Resource’ is 
that part of a Mineral Resource for 
which quantity, grade (or quality) 
densities, shape, and physical 
characteristics are estimated with 
confidence sufficient to allow the 
application of Modifying Factors 
to support detailed mine planning 
and final evaluation of the economic 
viability of the deposit. Geological 
evidence is derived from adequately 
detailed and reliable exploration, 
sampling and testing gathered 
through appropriate techniques from 
locations such as outcrops, trenches, 
pits, workings and drill holes, and is 
sufficient to confirm geological and 
grade (or quality) continuity between 
points of observation where data and 
samples are gathered. A Measured 
Mineral Resource has a higher level 
of confidence than that applying to 
either an Indicated Mineral Resource 
or an Inferred Mineral Resource. It 
may be converted to a Proved Reserve 
or under certain circumstances to a 
Probable Ore Reserve. 

mt
Million tonnes.

mtpa 
Million tonnes per annum.

Net gearing 
(Debt - cash) / (debt - cash + equity).

NPAT
Net profit after tax.

OPF  
Ore Processing Facility. 

Pilbara 
The Pilbara region in the north-west of 
Western Australia.

Pilbara Energy Connect (PEC) 
Fortescue's energy generation and 
transmission program of works.

Probable Ore Reserve
As defined in the JORC Code, the 
economically mineable part of an 
Indicated Resource, and in some 
circumstances, a Measured Resource. 
It includes diluting materials and 
allowances for losses which may 
occur when the material is mined. 
Appropriate assessments and studies 
have been carried out, and include 
consideration of and modification 
by realistically assumed mining, 
metallurgical, economic, marketing, 
legal, environmental, social and 
governmental factors. These 
assessments demonstrate at the time 
of reporting that extraction could 
reasonably be justified.

Proved Ore Reserve 
As defined in the JORC Code, the 
economically mineable part of a 
Measured Resource. It includes diluting 
materials and allowances for losses 
which may occur when the material 
is mined. Appropriate assessments 
and studies have been carried out, 
and include consideration of and 
modification by realistically assumed 
mining, metallurgical, economic, 
marketing, legal, environmental, social 
and governmental factors. These 
assessments demonstrate at the time 
of reporting that extraction could 
reasonably be justified.

Real zero 
Real Zero means the elimination 
of greenhouse gas emissions from 
our use of, or reliance on, fossil fuels 
and replacement fuels (e.g. green 
ammonia), wherever possible without 
using offsets.

Reserves or Ore Reserves 
As defined in the JORC Code, 
the economically mineable part 
of a Measured Resource and/or 
an Indicated Mineral Resource. 
It includes diluting materials and 
allowances for losses, which may 
occur when the material is mined. 
Appropriate assessments and studies 
have been carried out, and include 
consideration of and modification 
by realistically assumed mining, 
metallurgical, economic, marketing, 
legal, environmental, social and 
governmental factors. These 
assessments demonstrate at the time 
of reporting that extraction could 
reasonably be justified. Ore reserves 
are subdivided in order of increasing 
confidence into Probable Ore Reserves 
and Proved Ore Reserves. Where  
capitalised, this term refers to 
Fortescue’s estimated reserves.

FORTESCUE  FY23 ANNUAL REPORT    |    177

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Underlying net profit after tax 
Net profit after tax (NPAT) adjusted 
for results adjusted for the removal of 
significant non-cash and non-recurring 
items.

VTEC 
Vocational Training and Employment 
Centre.

Western Hub 
The Western Hub includes the Eliwana 
mine. 

wmt  
Wet metric tonne.

Zero emission vehicles 
Zero emissions, when used to describe 
vehicles, means that the vehicle’s 
exhaust does not produce greenhouse 
gas.

Resources or Mineral Resources
As defined in the JORC Code, a 
concentration or occurrence of 
material of intrinsic economic 
interest in or on the Earth’s crust in 
such form, quantity and quality that 
there are reasonable prospects for 
eventual economic extraction. The 
location, quantity, grade, geological 
characteristics and continuity of a 
mineral resource are known, estimated 
or interpreted from specific geological 
evidence and knowledge. Mineral 
resources are subdivided, in order 
of increasing geological confidence, 
into Inferred, Indicated and Measured 
categories. Where capitalised, this 
term refers to Fortescue’s estimated 
Mineral Resources.

Senior executive 
Leadership position title of Director or  
Group Manager.

Solomon Hub 
A mining hub with Firetail, Kings Valley 
and Queens Valley mines.

Super Special Fines 
Fortescue’s iron ore product from the 
Chichester Hub, with an iron content of 
56.4% Fe.

Sustainable Aviation Fuels (SAFs)
A wide range of aviation fuels including 
biofuels (e.g. waste cooking oil), 
hydrogen and synthetic hydrocarbons. 
Not all SAFs are sustainable or zero-
emission. 

TRIFR 
Total recordable injury frequency rate 
per million hours worked, comprising 
lost time injuries, restricted work and 
medical treatments. 

Total global economic contribution
Payments that contribute to the 
global economy including payments 
to suppliers, employees (salaries 
and wages), governments (taxes and 
royalties), shareholders and investors 
(dividends and debt repayments).

Underlying EBITDA
Underlying EBITDA is defined as 
earnings before interest, tax, 
depreciation and amortisation, 
exploration, development and other 
expenses. 

Underlying EBITDA margin
Underlying EBITDA / operating sales 
revenue.

FORTESCUE  FY23 ANNUAL REPORT    |    178

Corporate directory 
DISCLAIMER

Our report contains certain statements which may constitute 
“forward-looking statements”. Words that may indicate a 
forward-looking statement include words such as “intend”, 
“aim”, “ambition”, “commitment”, “aspiration”, “project”, 
“anticipate”, “likely”, “estimate”, “plan”, “believes”, “expects”, 
“may”, “should”, “could”, “will”, “forecast”, “target”, “set to” or 
similar expressions.

Examples of forward-looking statements include: our 
projected and expected production and performance levels; 
our plans for major projects including investment decisions; 
our expectations regarding future demand for certain 
commodities; the assumptions and conclusions in our 
climate change related statements and strategies; and our 
plan to achieve Real Zero as described in this report.

Any forward-looking statements in this report reflect the 
expectations held at the date of this document.  Such 
statements are only predictions and are subject to inherent 
risks and uncertainties which could cause actual decisions, 
results, values, achievements or performance to differ 
materially from those expressed or implied in any forward-
looking statement. Forward-looking statements are based 
on assumptions regarding Fortescue’s present and future 
business strategies and the future conditions in which 
Fortescue expects to operate. Forward-looking statements 
are also based on management’s current expectations and 
reflect judgments, assumptions and information available as 
at the date of this report. Actual and future events may vary 
materially from the forward-looking statements made (and 
the conclusions and assumptions on which the forward-
looking statements were based) because events and actual 
circumstances frequently do not occur as forecast and 
future results are subject to known and unknown risks such 
as changes in market conditions and regulations.

Some of the various factors that could cause Fortescue’s 
actual results, achievements or performance to differ from 
those in forward-looking statements include: geopolitical 
and political uncertainty; trade tensions between major 
economies; the impacts of climate change; supply chain 
availability and shortages; the impacts of technological 
advancements including but not limited to the viability, 
availability, scalability and cost-effectiveness of technologies 

that can be used to decarbonise our business; our ability 
to profitably produce and transport minerals and/or 
metals extracted to applicable markets; the availability 
of skilled personnel to help us decarbonise and grow our 
businesses; new ore resource levels, including the results 
of exploration programmes and/or acquisitions; inadequate 
estimates of ore resources and reserves; our ability to 
successfully execute and/or realise value from acquisitions 
and divestments; our ability to raise sufficient funds for 
capital investment; disruption to strategic partnerships; 
damage to Fortescue’s relationships with communities and 
governments; labour unrest; our ability to attract and retain 
requisite skilled people; declines in commodity prices; 
adverse exchange rate movements; delays or overruns in 
projects; change in tax and other regulations; cybersecurity 
breaches; the impacts of water scarcity; natural disasters; 
the ongoing impacts of the COVID-19 pandemic; safety 
incidents and major hazard events; and increasing societal 
and investor expectations, including those regarding 
environmental, social and governance considerations.

Accordingly, forward-looking statements must be 
considered in light of the above factors, and others, 
and Fortescue cautions against undue reliance on such 
statements. Recipients should rely on their own independent 
enquiries, investigations and advice regarding information 
contained in this report. Fortescue makes no representation, 
guarantee, warranty or assurance, express or implied, as to 
the accuracy or likelihood of the forward-looking statements 
or any outcomes expressed or implied in any forward-
looking statements contained in this report being achieved 
or proved to be correct. 

Except as required by applicable regulations or by law, 
Fortescue disclaims any obligation or undertaking to 
publicly update or review any forward-looking statements, 
whether as a result of new information or future events. 
Past performance cannot be relied on as a guide to future 
performance.

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FORTESCUE  FY23 ANNUAL REPORT    |    179

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fortescue Shanghai, China
Unit 3, Floor 15 No. 1366 Lujiazui Ring 
Road Pudong New Area Shanghai, P.R 
China 

Singapore
FMG International  
The Central  
8 Eu Tong Sen St  
24-91 Singapore 059818

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CONTACT DETAILS

Fortescue Australia
Level 2, 87 Adelaide Terrace 
East Perth, WA 6004 
T: +61 8 6218 8888  
F: +61 8 6218 8880 
E: fortescue@fortescue.com 
www.fortescue.com

Fortescue VTEC and 
Community office 
1B/2 Byass Street 
South Hedland, WA 6722 
T: +61 8 9158 5800  
F: +61 8 6218 8880 
E: hedlandcommunity@fortescue.com 
vtec@fortescue.com

Australian Business Number
ABN 57 002 594 872

Auditor
PwC 
Level 15, 125 St Georges Terrace 
Perth, WA 6000 
www.pwc.com.au

Securities Exchange listings
Fortescue Metals Group Limited 
shares are listed on the Australian 
Securities Exchange (ASX) 
ASX Code: FMG

Fortescue Share Registry
Link Market Services Limited 
Level 12, QV1 Building 
250 St Georges Terrace 
Perth, WA 6000 
Locked Bag A14 
Sydney South, NSW 1235 
T: 1300 733 136 (within Australia) 
T: +61 2 8280 7603 (International) 
F: +61 2 9287 0309 
www.linkmarketservices.com.au

FORTESCUE  FY23 ANNUAL REPORT    |    180

Overview 
 
 
  
  
   
Celebrating 20 years  
of Fortescue

Over our short history, Fortescue has gone from a start-up to 
being one of the world’s largest producers of iron ore. As we 
look ahead to the next 20 years in our journey to become the 
number 1 integrated green technology, energy and metals 
company, we acknowledge our West Australian roots and 
thank those who have contributed, and continue to contribute, 
to Fortescue’s success.

fortescue.com

fortescue.com