2 0 2 4
ANNUAL REPORT
Overview
FORTESCUE FY24 ANNUAL REPORT | 2
decarbonisation
production
XX Mt
Iron Ore shipped
green
pioneer
sails
to cop28
PERFORMANCE
FY24
HIGHLIGHTS
C1 cost
18.24
/wet metric tonne
US$
Europa
iron ore
shipped
191.6
million tonnes
Green energy
Hub opens
our hydrogen-
powered battery
electric haul truck
prototype,
operated on
hydrogen for
the first time
Corporate
governance
Corporate
directory
FORTESCUE FY24 ANNUAL REPORT | 3
green
pioneer sails
to cop28
cash
on hand
4.9
billion
US$
Total
Recordable
Injury
Frequency
Rate
1.3
Underlying
net profit
after tax
5.7
billion
US$
100 megawatt
solar farm
100 megawatt solar
farm at North Star
Junction which will
avoid up to 125,000
tonnes of carbon
dioxide equivalent
from our operations
every year once fully
commissioned
TOTAL
ECONOMIC
CONTRIBUTION
FY24
A$27.5bn
Employee payments $2.5bn
Shareholder and investor payments $7.1bn
Government and native title payments $6.1bn
Suppliers and operational payments $11.8bn
METALS
Overview
FORTESCUE FY24 ANNUAL REPORT | 4
Family
Enthusiasm
Empowerment
Safety
Frugality
Courage and
Determination
Stretch Targets
Generating
Ideas
Integrity
Humility
We are the technology,
energy and metals
group accelerating the
commercial decarbonisation
of industry, rapidly,
profitably and globally.
WHAT WE DO
OUR VALUES
FORTESCUE FY24 ANNUAL REPORT | 1
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.
01
Overview
02
02
Operating and financial review
27
03
Ore reserves and mineral resources
44
04
Corporate governance
55
05
Our approach to sustainability
58
06
Climate change report
65
07
Directors' report
Remuneration report
102
08
Financial report
150
09
Corporate directory
225
CONTENTS
Overview
FORTESCUE FY24 ANNUAL REPORT | 2
The Liebherr R 9400 E
electric excavators are
powered by a 6.6kV substation
and more than two kilometres
of high voltage trailing cable
OVERVIEW
FORTESCUE FY24 ANNUAL REPORT | 3
Overview
Operating and
financial review
Ore Reserves and
Mineral Resources
Our approach
to sustainability
climate change
report
Directors’ report
| Remuneration
Report
Financial report
Corporate
governance
Corporate
directory
EXECUTIVE
CHAIRMAN
MESSAGE
Ask heavy industry companies around the
world when they will stop burning fossil
fuels and nearly all can’t give you a date.
Fortescue can. It is 2030.
We are resolutely committed to meeting our Real Zero
target by 2030.
Doing this will see us eliminate fossil fuels from our
operations without any reliance on voluntary carbon offsets.
Our progress can be tracked through our transparent annual
reporting, which makes that target real.
To date, that progress has been extraordinary.
In FY24, our emissions were around 10 per cent less than
what we forecasted.
We fully commissioned Australia’s largest gas and liquid
hydrogen plant at our Christmas Creek mine, which is now
being used to refuel a fleet of fuel cell hydrogen-powered
coaches and our zero emissions prototypes.
We tested our battery electric haul truck prototype,
Roadrunner, at our Green Energy Hub at Christmas Creek
and its hydrogen-powered equivalent is now undergoing
similar testing after recently arriving in the Pilbara.
We have commenced commissioning of our 100 megawatt
(MW) solar farm at North Star Junction near Iron Bridge,
which will avoid up to 125,000 tonnes of carbon dioxide
equivalent from our operations every year.
This is the first of more than one gigawatt (GW) of solar
infrastructure that we will build before the end of the
decade.
Our US$6.2 billion decarbonisation plan is translating our
ambition into action.
While Fortescue pursues its Real Zero target, the global shift
away from fossil fuels is at a critical juncture.
Overview
FORTESCUE FY24 ANNUAL REPORT | 4
At the time of writing, every month since June 2023 – 13
months in a row – has ranked as the planet’s hottest since
records began. The most recent data suggested 2024
was on track to surpass 2023 as the world’s hottest year.
Yet despite climate change continuing to wreak havoc
around the world, Russia’s invasion of Ukraine and war
in the Middle East has allowed political and business
leaders the excuse to slow or stop their own energy
transition. Electricity prices have skyrocketed and energy
policy settings in many countries are heavily influenced
by fossil fuel lobbyists compounding and accelerating
climate change against the interests of every living
organism.
Fortescue has been alive to this. Since we launched our
green hydrogen ambitions in 2020, we have been clear
that our investments will flow to jurisdictions that most
effectively manage long-term climate risk.
As we decarbonise Fortescue, we have reflected this
focus through our commitment to developing four global
green hydrogen projects.
The Arizona Hydrogen project in the United States
and the Gladstone PEM50 Project in Australia were
Fortescue’s first Energy projects to reach Final Investment
Decision (FID).
Two larger projects, the Holmaneset Project in Norway
and the Pecém Project in Brazil, are progressing well
towards FID.
FORTESCUE FY24 ANNUAL REPORT | 5
Overview
Operating and
financial review
Ore Reserves and
Mineral Resources
Our approach
to sustainability
climate change
report
Directors’ report
| Remuneration
Report
Financial report
Corporate
governance
Corporate
directory
Our landmark joint venture announced in April with
Morocco’s OCP Group, a global leader in plant nutrition and
phosphate-based fertilisers, will provide an extraordinary
opportunity to provide green hydrogen, ammonia and
fertilisers, domestically and to Europe.
Each of these projects draw on the unique strengths of the
countries they are in. They reflect jurisdictions which have
done the hard work to reduce green power costs, incentivise
job-creating investment and make overall project economics
stack up.
Where green power prices aren’t where they need to be,
Fortescue is determined to work in genuine partnership with
industry and government to drive prices down to enable
green industry.
This includes in Australia, where the Hydrogen Production
Tax Credit unveiled in May 2024 will be crucial to getting
green hydrogen projects off the ground as quickly as
possible.
Over the long term, Fortescue is taking a strong focus on
the export of green metal to China. This plan could eliminate
more than 200 million tonnes (Mt) per year from our Scope 3
emissions.
In June, Fortescue welcomed H.E. Li Qiang, Premier of the
State Council of the People’s Republic of China, to its green
technology and test facility in Perth.
This historic visit provided a platform for continued
engagement with China on the creation of an Australia-Sino
green metal supply chain.
By meeting this market for green metal, Fortescue will
become one of the world’s largest consumers of green
hydrogen. For example, the production of 100Mt of green
metal will see us deploy around 8Mt of green hydrogen.
Our Christmas Creek Green Metal Project, which our
Board approved in November 2023 with a US$50 million
investment, will be crucial in proving this can be achieved
at scale. We commenced works on the Project earlier this
month.
And so, as we approach the halfway mark of the journey to
our Real Zero 2030 target, this is where our focus is.
It is the responsibility of every company to join us in moving
to a world that is no longer reliant on fossil fuels.
Overview
FORTESCUE FY24 ANNUAL REPORT | 6
We have a clear mission that unites
us here at Fortescue. That is to show
the world we can eliminate fossil fuels
and do it profitably.
Our role is to be a leader, innovator and first mover in the
energy transition, by becoming the world’s leading green
technology, energy and metals company.
However, we acknowledge that what we’re doing is not easy.
Luckily, that is where Fortescue thrives.
This business was built over the last 20 years by testing
limits and living in the uncomfortable. We create and use
cutting edge, innovative technologies to do things no one
thought was possible, and we’ve delivered large returns for
our shareholders in the process.
We’re taking those same skills and core Values created and
honed in the Pilbara and applying them to our operations in
the rest of the world, as we expand to become a truly global
company.
There’s no one doing what we are doing and what we are
doing is real, not just talk.
We’re making solid progress and showing others they can
do it too.
Fortescue is steadfast in our commitment to the energy
transition.
However, our financial discipline always comes first. We will
never make investments that are not economically viable.
ENERGY CEO
MESSAGE
Mark Hutchinson
This year, Fortescue took three projects to Final Investment
Decision (FID). We’ve turned the soil to launch Arizona
Hydrogen, our green hydrogen plant in the United States and
started work on Gladstone PEM50, a 50MW green hydrogen
project utilising Fortescue’s own electrolyser technology.
Works have now started on a Green Metal Project at our
Green Energy Hub at Christmas Creek, which will use green
hydrogen to produce green metal.
Our Board has also agreed to fast-track two more projects,
approving Early Investment Decisions to develop the front
end engineering designs and approvals for our next green
energy projects. Holmaneset is a green ammonia project
in Norway, which has received backing and funding by the
European Union, and our Pecém Green Hydrogen Project in
Brazil.
On top of that, we have prospective projects in Oman,
Morocco, Jordan and Egypt that will follow next.
These are massive achievements, and we won’t be slowing
down.
We must continue to move fast, be agile and deliver for our
shareholders and our customers.
Longer term, we totally believe that green hydrogen is what
the world ultimately needs and that is why we will continue to
maintain a significant portfolio of potential projects. However,
we are realistic about the pace of the current global energy
transition.
FORTESCUE FY24 ANNUAL REPORT | 7
Overview
Operating and
financial review
Ore Reserves and
Mineral Resources
Our approach
to sustainability
climate change
report
Directors’ report
| Remuneration
Report
Financial report
Corporate
governance
Corporate
directory
As the green hydrogen market develops around the world,
it is really clear that the cost of green power has to be cost
effective to make projects viable. Therefore, where the power
costs are not at this level, we will work steadfastly with those
economies to help bring the costs of electricity down, by
producing electrons.
We’re creating a portfolio that is ambitious and develops
complementary capabilities across the entire green energy
value chain, from green electron and molecule production, to
battery power systems, green technology development and
of course green financing through Fortescue Capital.
This means we can maximise efficiencies, innovation, and
create a real competitive leg-up on the competition, while
also having the knowledge base, adaptability and optionality
to quickly respond to shifts in market conditions and
capitalise on emerging opportunities.
Being agile is what sets Fortescue apart.
We are leading with breakthrough technologies, and thanks
to two decades of Fortescue experience, we also know how
to deploy that technology in the real world.
That is our real advantage.
We officially opened our Gladstone Electrolyser
Manufacturing Centre in Queensland earlier this year and
started selling our electrolyser systems. The message came
loud and clear from customers: Fortescue is a trusted and
reliable brand and because we understand the systems
that our products operate in, this is a clear competitive
advantage.
Our longevity, balance sheet and financial discipline make us
a unique alternative to other first movers.
So, we’re applying that to our entire energy business.
The decarbonisation of Fortescue’s mining operations by
2030 is putting us at the forefront of innovation once again.
Technology is the key to everything that we’re doing.
We’ve developed the solutions in-house, joining together the
best engineering minds from the UK with our on-the-ground
experience in Australia to create our own Fortescue Zero
technologies.
Electric excavators, hydrogen-powered and battery electric
haul trucks, large fast chargers and some great battery
software are already operating.
These green technologies will decarbonise Fortescue first,
but we’re already working to sell the same solutions and
products to other heavy industry players who need to also
eliminate their emissions.
What’s clear is there is a huge demand and a gap in the
market for what we’re creating, and Fortescue is being
recognised for leading the way.
The Green Pioneer is testament to that. Our dual-fuelled
ammonia-powered vessel was a winner at this year’s World
Hydrogen Awards, after successfully completing trials and
being certified in the Port of Singapore.
This is a significant milestone and brings the world one step
closer to green shipping.
It is invigorating to come to work every day and be
surrounded by a family of like-minded people, all pushing
and driving this business to be better, do more and achieve
what others think is impossible.
What we’ve done as a team this year is incredible, and it’s
just the beginning.
Overview
FORTESCUE FY24 ANNUAL REPORT | 8
Driven by an ongoing focus on
productivity gains through innovation
and technology, Fortescue has grown to
become one of the world’s lowest cost
iron ore producers with more than two
billion tonnes shipped to our customers
since 2008. Our growth over the past
two decades has been remarkable,
testament to our never ever give up
mindset at Fortescue.
We are a company just getting started with an even more
prosperous future ahead in green technology, energy and
metals.
It was another incredible production result for the Metals
business this year, with full year shipments of 191.6Mt.
Following the challenges resulting from an ore car
derailment in December 2023, this result demonstrated
our unique culture and Values in action.
Importantly, we did this while maintaining our laser focus
on safety with a Total Recordable Injury Frequency Rate
of 1.3 for Metals for the financial year – a 28 per cent
improvement from FY23. A truly amazing result.
METALS CEO
MESSAGE
dino otranto
During the financial year, we celebrated the 20th anniversary
since Fortescue was founded. Back then, we were a small
exploration company and now, we rival some of the world’s
biggest iron ore players through our world class mining
operations and infrastructure.
This year, we continued to ramp up commissioning of Iron
Bridge – our most innovative iron ore project yet, and we
achieved first ore from our Flying Fish deposit at our Eliwana
mine. Globally, we have a pipeline of exploration projects
underway, including in Latin America and Gabon as well as
the Pilbara.
As the climate crisis poses a growing threat to our very
existence, the need to reduce carbon emissions has never
been more urgent. Decarbonisation is not merely a buzzword
or a lofty goal. It’s a moral imperative, an economic necessity
and a pathway to a sustainable future. Fortescue’s mission is
to accelerate commercial decarbonisation of industry, rapidly,
profitably and globally.
By 2030, our aim is to have our mining operations in the
Pilbara running on green energy. It’s a massive undertaking,
but we can do it firstly because of the people we have,
but also because of the technology we are developing at
Fortescue Zero.
We are on track to meet our 2030 emissions reduction target
with several milestones achieved during the financial year.
We have now commissioned Australia’s largest gaseous
and liquid hydrogen plant on a mine site, which can produce
around 530 kilograms of hydrogen gas per day. This
renewable hydrogen plant is versatile, enabling us to produce
gaseous and liquid hydrogen to be used to power our mining
equipment prototypes and refuel our fleet of hydrogen-
powered fuel cell coaches at Christmas Creek.
FORTESCUE FY24 ANNUAL REPORT | 9
Overview
Operating and
financial review
Ore Reserves and
Mineral Resources
Our approach
to sustainability
climate change
report
Directors’ report
| Remuneration
Report
Financial report
Corporate
governance
Corporate
directory
Already, we have three electric excavators operating across
our sites which are powered by a 6.6kV substation and more
than two kilometres of high voltage trailing cable. Once we
decarbonise our entire excavator fleet, around 95 million
litres of diesel will be removed from our operations every
year.
We now have both our hydrogen-powered and battery
electric haul truck prototypes at the Pilbara completing
site-based testing.
Our progress on decarbonisation is evident right across the
business. This year, our aerodrome at Cloudbreak became
the first in Australia to have a fully operational, solar-
powered airfield lighting system. The changeout of the 120
airfield lights to solar will result in a 20 per cent reduction
in power generation and diesel usage at our airstrip, while
delivering maintenance and cost benefits, as well as safety
improvements.
We see decarbonisation as a significant opportunity for our
business that will deliver cost savings and create a more
resilient supply chain that is less vulnerable to regulatory
changes.
Which brings me to green metal.
Right now, we are on the brink of a transformative moment in
the history of industry – the rise of green metal.
Pivoting to producing green metal is the next step for us.
It represents a departure from the status quo and entails
adopting innovative technologies to drastically reduce
emissions while rethinking the entire iron and steel value
chain.
This year we have commenced works on a Green Metal
Project at our Green Energy Hub at Christmas Creek. With
first production targeted next year, the plant will use green
hydrogen produced at our existing hydrogen facility to
produce high purity green metal that will be suitable for use
in almost any steel plant globally.
This is an incredibly exciting project for Fortescue and has
the potential to open new markets for us. As we look to the
future, we remain committed to delivering long-term value
for our shareholders and stakeholders.
At Fortescue, we don’t fear challenges. Instead, we embrace
them and tackle them head on.
Our progress to date on decarbonising demonstrates the
power of human ingenuity and what can be achieved when
great minds come together.
I would like to thank our more than 15,000 team members
globally who make up the Fortescue Family. Our strong
performance this year would not have been possible without
their dedication and commitment to achieving our stretch
targets every day.
As we continue this exciting phase of growth in Fortescue’s
journey, our work will always be underpinned by our unique
culture and Values.
Thank you for your continued support.
Overview
FORTESCUE FY24 ANNUAL REPORT | 10
OUR BOARD
1 Dr Larry Marshall was appointed Non-Executive Director on 28 August 2023
2 Usha Rao-Monari was appointed Non-Executive Director on 24 January 2024
3 Noel Pearson was appointed Non-Executive Director on 1 August 2024
⁴ Dr Larry Marshall will be appointed as Lead Independent Director on the date of the AGM,
6 November 2024. Mark Barnaba will continue as non-executive director and Deputy Chair.
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
Non-Executive Director and
Lead Independent Director/
Deputy Chair⁴
Lord Sebastian Coe CH, KBE
Non-Executive Director
Penny Bingham-Hall
Non-Executive Director
Dr Jean Baderschneider
Non-Executive Director
Elizabeth Gaines
Executive Director and
Global Ambassador
Fortescue
Yifei Li
Non-Executive Director
Dr Larry Marshall
Non-Executive Director1,4
Usha Rao-Monari
Non-Executive Director2
Noel Pearson
Non-Executive Director3
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.¹
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 June 2024.
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 30 June 2024, the Board has seven non-executive directors
and two executive directors, being Dr Andrew Forrest AO,
Fortescue's Executive Chairman, and 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.
The Board appointed Noel Pearson as a non-executive director
on 1 August 2024.
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.
FORTESCUE FY24 ANNUAL REPORT | 11
Overview
Operating and
financial review
Ore Reserves and
Mineral Resources
Our approach
to sustainability
climate change
report
Directors’ report
| Remuneration
Report
Financial report
Corporate
governance
Corporate
directory
¹ Effective 1 July 2024, the Board has implemented a new Committee structure, with the following Board Committees: (a) Audit, Finance
and Risk Management Committee, (b) People, Remuneration and Nomination Committee, (c) Safety and Sustainability Committee
Dr Andrew Forrest AO
Executive Chairman
Executive Chairman and Founder of Fortescue, Minderoo
Foundation, and Tattarang
Dr Andrew Forrest AO is a global business and philanthropic
leader dedicated to ending the use of fossil fuels, creating
green energy solutions and tackling global challenges like
climate change, conflict response, modern slavery and
oceanic destruction through overfishing and plastic pollution.
In 2003, Dr Forrest founded Fortescue Metals Group in
Western Australia. 21 years later, Fortescue is one of the
world’s largest iron ore producers and a global green
technology, energy and mining group with a laser focus on
accelerating the commercial decarbonisation of industry.
Under Dr Forrest’s leadership, Fortescue has developed
some of the world’s most efficient and lowest cost mining
infrastructure, rolled out world-leading green mining
equipment across its Pilbara operations and become
the company globally with a plan to achieve Real Zero –
elimination of fossil fuels and carbon offsets – on its Australian
mine sites by 2030.
Through Tattarang, Dr Forrest owns Squadron Energy,
Australia’s largest renewable energy developer, delivering
30 per cent of the Federal Government’s 2030 82 per cent
renewables target. Squadron has five utility-scale wind farms
in operation, delivering 1.1 gigawatts of green energy, 900
megawatts under construction and is working to build enough
renewable energy to power the equivalent of six million
Australian homes by the end of the decade.
Dr Forrest’s other commercial interests reflect his dedication
to the economic livelihood of all Australians across
sustainable agriculture and food production, critical minerals,
health technology and manufacturing, including investing
in iconic Australian brands, R.M.Williams and Akubra, to
ensure they stay in Australian hands and grow their legacy of
exceptional local craftsmanship.
Dr Forrest established Minderoo Foundation in 2001 and is
a member of the Giving Pledge, committing to give away his
wealth over his lifetime. With an endowment that now exceeds
AU$9 billion, the Foundation focuses on global challenges,
such as climate change, ending plastic pollution, urgent
humanitarian responses, gender equality and returning our
natural ecosystems to a healthy state.
Minderoo Foundation rapidly responds to both Australian and
global crises including providing more than AU$70 million
in the aftermath of the 2019/20 bushfires, AU$19 million to
help get humanitarian aid to civilian populations in Gaza, and
AU$20 million to assist the people of Ukraine, as well as a
commitment to provide US$500 million in funding to kickstart
post-war reconstruction.
Dr Forrest 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 2013, Dr Forrest was appointed by Australia’s Department of
the Prime Minister and Cabinet to lead the country’s response
to tackling Indigenous disparity. Dr Forrest is also Co-Chair
of the Australia-China Senior Business Leaders’ Forum and a
Board Member for the Boao Forum.
Mark Barnaba AM CitWA
Lead Independent Director, Deputy Chairman, Non-Executive
Director
Deputy Chairman since November 2017; Lead Independent Director
since November 2014; Non-Executive Director since February 2010
Mr Barnaba is the Deputy Chairman, Lead Independent Director and
Chairman of the Audit, Finance and Risk Management Committee¹
and sits on the advisory board of Fortescue Capital (a third party Asset
Manager) at Fortescue Ltd (ASX:FMG). He is Chairman of Greatland
Gold PLC (LSE:GGP) and is also Chairman of Airtrunk (a cloud-based
data centre company operating in Asia-Pacific and Japan). Mark
chairs the Hospital Benefit Fund (HBF) Investment Committee and is a
member of the Board of The Centre for Independent Studies.
Mr Barnaba brings a wealth of international experience as an
entrepreneur, corporate advisor and independent director for
organisations across the finance, technology, infrastructure, natural
resources, sports administration and education sectors. He has
extensive and particularly diverse experience at board level in both the
for-profit and non-profit sectors.
Mr Barnaba was previously on the Board of Australia’s central bank,
the Reserve Bank of Australia (RBA), for two terms, and is a former
Chairman of the Audit Committee of the RBA. He has previously
chaired several publicly listed Australian companies within the mining
and infrastructure sectors along with chairing non-profit organisations
and was a former Chairman of the State Theatre Company of Western
Australia, the West Coast Eagles (AFL team) and Williams Advanced
Engineering (UK based offshoot of the Williams F1 team).
In 2009, Mr Barnaba was the recipient of the WA Citizen of the Year
Award in Industry and Commerce and in 2015 was named a Member
of the General Division of the Order of Australia (AM) for significant
service to the investment banking and financial sector, to business
education and to sporting and cultural organisations.
In his executive 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 currently
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 (High Distinction; 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, Finance and Risk Management Committee¹ (Chair), People,
Remuneration and Nomination Committee² (Member), Safety and
Sustainability Committee³ (Member)
¹Prior to 1 July 2024 Audit, Risk Management and Sustainability Committee
²Prior to 1 July 2024 People and Remuneration Committee
³New committee established for FY25
Overview
FORTESCUE FY24 ANNUAL REPORT | 12
OUR BOARD
Elizabeth Gaines
Executive Director and Global Ambassador Fortescue
Former Chief Executive Officer and 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.
Ms Gaines 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.
In 2019 Ms Gaines was ranked second in 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.
Lord Sebastian Coe CH, KBE
Non-Executive Director
Non-Executive Director since February 2018
Based in Monaco, Lord Coe is the Vice Chairman
of Wasserman, formerly known as CSM Sport and
Entertainment.
Lord Coe serves as Non-Executive Director of 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. Coe is currently serving his third 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 12 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.
In 2017, he became Chancellor of Loughborough University
having previously served as Pro Chancellor of the University.
Committee memberships:
People, Remuneration and Nomination Committee¹ (Member)
¹Prior to 1 July 2024 People and Remuneration Committee
FORTESCUE FY24 ANNUAL REPORT | 13
Overview
Operating and
financial review
Ore Reserves and
Mineral Resources
Our approach
to sustainability
climate change
report
Directors’ report
| Remuneration
Report
Financial report
Corporate
governance
Corporate
directory
OUR BOARD
Dr Jean Baderschneider
Non-Executive Director
Non-Executive Director since January 2015
A highly regarded leader in both business and civil society,
Dr Baderschneider brings 35 years of extensive international
experience in supply chain operations and procurement,
strategic sourcing and logistics management, along with a
deep understanding of high-risk operations and locations
and complex partnerships. She also has global experience
in safety, security and environmental operations and
sustainability stewardship.
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 a member of the International Advisory
Committee to the 2024 Conference of the Parties (COP29)
to the United Nations Framework Convention on Climate
Change (UNFCCC). She is also the President of the Board of
Trustees of The President Lincoln’s Cottage and a member
of the Abraham Lincoln National Council of Ford 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 Financial Sector Commission on Modern
Slavery. With over 17 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 Verité and is 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 National Advisory Council on
Minority Business Enterprises and is a past recipient of
Cornell’s Jerome Alpern Award and Nomi Network Corporate
Social Responsibility Award. She holds a Masters Degree
from the University of Michigan and a PhD from Cornell
University.
Committee memberships:
Audit, Finance and Risk Management Committee¹ (Member),
People, Remuneration and Nomination Committee² (Member)
Safety and Sustainability Committee³ (Chair)
¹Prior to 1 July 2024 Audit, Risk Management and Sustainability
Committee
²Prior to 1 July 2024 People and Remuneration Committee
³New committee established for FY25
Penny Bingham-Hall
Non-Executive Director
Non-Executive Director since November 2016
Ms Bingham-Hall has over 30 years’ experience in senior
executive and non-executive roles in large ASX listed
companies. She is Chair of Vocus Group and Co-Chair of
Supply Nation and a Non-Executive Director of Fortescue.
She is also the Deputy Chair of both the Advisory Council of
the Climate Governance Initiative, Australia and the Salaam
Foundation.
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 recently retired from the Board of Dexus Property Group
and 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 Taronga
Conservation Society Australia, the NSW Freight and Logistics
Advisory Council, the inaugural Chair of Advocacy Services
Australia, Deputy Chair and Life Member of the Tourism &
Transport Forum and a director of Infrastructure Partnerships
Australia, SCEGGS Darlinghurst Limited and the Global
Foundation.
Ms Bingham-Hall has a Bachelor of Arts 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:
People, Remuneration and Nomination Committee¹ (Chair),
Audit, Finance and Risk Management Committee² (Member),
Safety and Sustainability Committee³ (Member)
¹Prior to 1 July 2024 Remuneration and People Committee
²Prior to 1 July 2024 Audit, Risk Management and Sustainability
Committee
³New committee implemented in FY25
Overview
FORTESCUE FY24 ANNUAL REPORT | 14
OUR BOARD
Dr Larry Marshall, FF, FAICD, FAIP, FTSE
Non-Executive Director
Non-Executive Director since August 2023
Dr Larry Marshall chairs AmCham, the American Chamber
of Commerce, sits on the boards of Nanosonics (ASX:NAN),
Australian National University, Great Barrier Reef Foundation,
and on the Australian Government’s Circular Economy
Ministerial Advisory Group, and formerly on the Prime
Ministers Science & Technology Council, and SITAG, the
COVID Vaccines and Treatments Committee of the Federal
Government.
He is the longest serving Chief Executive of CSIRO, and led a
transformation which achieved the first growth in 30 years,
doubled the value delivered to stakeholders, and made CSIRO
the first Australian entity to reach the Thompson Reuters
Global Top 20 Innovators List.
Dr Marshall has a PhD in Physics and has been honoured
for both his business acumen as a Fellow of the Australian
Institute of Company Directors and also his Technology
and Engineering acumen as a Federation Fellow, and
Fellow of the Australian Institute of Physics (AIP) and
Academy of Technological Sciences and Engineering
(ATSE), and an inaugural Male Champion of Change STEM
(science, technology, engineering and mathematics). He
is an ambassador of Advance representing the one million
Australians living abroad, and has been listed as an Australian
top 10 digital entrepreneur, and in Australia’s top 10 most
influential people in tech.
He has co-founded and led six companies in Biotech,
Telecom, Semi and Venture Capital. He has 100 publications
and conference papers, holds 20 patents and has served on
20 boards of high-tech companies operating in the United
States, Australia and China.
Dr Marshall is the author of the 2023 book, Invention to
Innovation: How Scientists Can Drive Our Economy, which
charts a course for Australian business to disrupt their
market, defeat competition and accelerate economic growth
by using science driven innovation.
Committee memberships:
Audit, Finance and Risk Management Committee¹ (Member),
Safety and Sustainability Committee² (Member)
¹Prior to 1 July 2024 Audit, Risk Management and Sustainability
Committee
²New committee established for FY25
Ms 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.
Ms Li was a Global Trustee of the Rockefeller Foundation
and 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 from the Foreign Affairs College
in Beijing and an MA in International Relations from Baylor
University in the United States.
Committee memberships:
People, Remuneration and Nomination Committee¹ (Member)
¹ Prior to 1 July 2024 People and Remuneration Committee
FORTESCUE FY24 ANNUAL REPORT | 15
Overview
Operating and
financial review
Ore Reserves and
Mineral Resources
Our approach
to sustainability
climate change
report
Directors’ report
| Remuneration
Report
Financial report
Corporate
governance
Corporate
directory
OUR BOARD
Usha Rao-Monari
Non-Executive Director
Non-Executive Director since January 2024
Ms Rao-Monari is a senior infrastructure investment
professional with over 25 years of experience leading
investment platforms and departments within asset
investment and management organisations.
She has held various leadership positions in the United
Nations, Blackstone Group, Global Water Development
Partners, and the International Finance Corporation.
Ms Rao-Monari currently serves as a Member of the
Environmental Steering Committee for NEOM, Saudi Arabia;
Member of the International Advisory Panel on Carbon
Credits, Singapore; Commissioner of Global Commission on
the Economics of Water, Netherlands, and Co-Chair of the
Voluntary Carbon Markets Integrity Initiative.
Ms Rao-Monari has also been involved in several global
initiatives and partnerships on water resources, clean energy,
resource efficiency and environmental issues such as the
2030 Water Resources Group, the World Economic Forum
Global Agenda Councils and the CDP North America where
she facilitated dialogue, innovation and solutions among
public, private and civil society actors.
She has a Masters in International Affairs and Finance from
Columbia University, a Masters in Management Studies from
Jamnalal Bajaj Institute of Management, and a BA Honours
Economics from Delhi University, and has completed the
Program for Management Development at Harvard Business
School.
Committee memberships:
Audit, Finance and Risk Management Committee¹ (Member),
(Member) Safety and Sustainability Committee (Member)³
¹Prior to 1 July 2024 Audit, Risk Management and Sustainability
Committee
³New committee established for FY25
Noel Pearson
Non-Executive Director
Non-Executive Director effective 1 August 2024
Mr Pearson comes from the Guugu Yimithirr community of
Hope Vale, on the south eastern Cape York Peninsula.
Mr Pearson is a prominent Australian Indigenous leader,
social advocate and lawyer. For over 30 years Mr Pearson
has pursued key agenda to achieve land rights and
socioeconomic development outcomes for Cape York.
Mr Pearson co-founded the Cape York Land Council and
negotiated with the Keating government to establish the
Native Title Act 1993 after the High Court’s landmark Mabo
decision rejected the fiction of terra nullius.
He is the Founder of the Cape York Partnership - a non-
profit Indigenous organisation working in the areas of policy,
empowerment, health, language and culture; and the Good to
Great Schools Australia program, which aims to lift education
outcomes for all Australian Students.
Mr Pearson served as a member of the Expert Panel on
Constitutional Recognition of Indigenous Australians and the
Referendum Council and continues to advocate for structural
reforms to empower Indigenous people.
Mr Pearson holds a degree in History and Law from Sydney
University.
Mona Gill
Company Secretary
Effective 17 July 2024
Ms Gill was appointed Company Secretary in July 2024,
bringing 20 years of experience through legal and
compliance roles in government and private practice. Ms
Gill holds a Bachelor of Laws and Bachelor of Science from
the University of Western Australia, a Masters in Laws from
the University of New South Wales and is a graduate of the
Australian Institute of Company Directors.
Overview
FORTESCUE FY24 ANNUAL REPORT | 16
FORTESCUE FY24 ANNUAL REPORT | 17
Overview
Operating and
financial review
Ore Reserves and
Mineral Resources
Our approach
to sustainability
climate change
report
Directors’ report
| Remuneration
Report
Financial report
Corporate
governance
Corporate
directory
Fortescue’s leadership team is accountable
for the safety of our people, upholding the
Values and acting with integrity and honesty
Apple Paget
Group Chief Financial Officer
Shelley Robertson
Chief Operating Officer
Dino Otranto
Chief Executive Officer,
Fortescue Metals
Mark Hutchinson
Chief Executive Officer,
Fortescue Energy
LEADERSHIP TEAM
Overview
FORTESCUE FY24 ANNUAL REPORT | 18
THE LEADERSHIP TEAM
Dino Otranto
Chief Executive Officer, Fortescue Metals
Mr Otranto joined Fortescue in 2021 as Chief Operating
Officer Iron Ore before becoming Fortescue Metal’s CEO
in August 2023. With a career in the resources industry
spanning 20 years and a range of commodities and
operations across the globe, Mr Otranto brings significant
operational, technical and financial expertise and a strong
focus on safety, values and employee engagement.
Mr Otranto is leading Fortescue Metals 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, Mr Otranto held the role of
Chief Operating Officer 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.
Mr Otranto 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
Chief Executive Officer, Fortescue Energy
Mr Hutchinson commenced with Fortescue in July 2022
as Director of Projects before being appointed Fortescue
Energy CEO in August 2022.
Mr Hutchinson’s focus as CEO is to drive growth in
Fortescue Energy which is building a global portfolio of
renewable green hydrogen and green ammonia projects and
developing green technology solutions. In 2024, the team
is focused on accelerating projects in Morocco, Norway, the
USA, Brazil and Australia.
Mr Hutchinson 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 Mr Hutchinson 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. Following its €12.35 billion acquisition, Mark led the
integration of Alstom’s power and grid businesses into GE.
A highly experienced international business leader with a
passion for Environmental, Social and Governance (ESG), Mr
Hutchinson 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.
Mr Hutchinson holds an honorary Doctor of Business from
the University of Queensland, where he is the primary
sponsor of the Ethics Chair.
FORTESCUE FY24 ANNUAL REPORT | 19
Overview
Operating and
financial review
Ore Reserves and
Mineral Resources
Our approach
to sustainability
climate change
report
Directors’ report
| Remuneration
Report
Financial report
Corporate
governance
Corporate
directory
THE LEADERSHIP TEAM
Apple Paget
Group Chief Financial Officer
Ms Paget joined the Company in January 2023 as Group
Manager Finance & Tax. She was appointed Acting Chief
Financial Officer of Fortescue Metals in August 2023 and
Group Chief Financial Officer in July 2024.
Ms Paget is a finance executive with 25 years experience in
the dynamic landscape of multinational resource companies
spanning finance, tax, treasury, commercial, business
evaluation, and acquisitions and divestments.
She has been involved in transformative offshore renewable
wind and green hydrogen projects and has a strong interest
in sustainability and forging pathways towards a greener,
more resilient future.
Prior to joining Fortescue, Ms Paget was a key member
of TotalEnergies Australia’s Leadership team and a senior
finance member of ConocoPhillips Australia.
Ms Paget holds a Bachelor of Commerce from the University
of Western Australia, is a qualified Chartered Accountant
(CA), a member of the Institute of Chartered Accountants
Australia & New Zealand and a Chartered Tax Advisor (CTA)
with the Tax Institute.
Shelley Robertson
Chief Operating Officer
Ms Robertson joined Fortescue in October 2023. She is an
experienced executive with a successful career spanning 30
years in oil and gas, mining and renewable energy.
Ms Robertson is known for delivering effective, inclusive
leadership that drives results-oriented business
transformation. Before joining Fortescue, Shelley was
Executive General Manager – Energy at Mineral Resources,
where she was responsible for the strategic oversight of the
oil and gas exploration and development portfolio, and for
providing oversight of energy solutions for existing mining
operations and new projects. Prior to this, Shelley was Chief
Executive Officer of Norwest Energy, an ASX-listed oil and
gas exploration company.
Ms Robertson has a Bachelor of Science from Murdoch
University, a postgraduate Diploma (Petroleum Engineering)
from UNSW, a Master’s of Business Administration (Oil
and Gas) from Curtin University and is a graduate of the
Australian Institute of Company Directors (with Order of
Merit).
Goldfields Gas Pipeline
Dampier Bunbury Gas Pipeline
Cloudbreak
Christmas Creek
Eliwana
WESTERN HUB Solomon
CHICHESTER HUB
NYIDINGHU
IRON BRIDGE
Karratha
Dampier
Roebourne
Marble Bar
Nullagine
Newman
Tom Price
Port Hedland
HERB ELLIOTT
PORT
Pilbara
Western Australia
total Anticipated
infrastructure
TRANSMISSION
LINES
>1GW
Operational
~ 1GW
4-5 GWh storage
Under development
> 750km
Future development
North Star Junction
Overview
FORTESCUE FY24 ANNUAL REPORT | 20
ABOUT
FORTESCUE
We are the technology, energy and metals group accelerating the commercial
decarbonisation of industry, rapidly, profitably and globally.
Our Metals business comprises our iron ore operations
in the Pilbara as well as a pipeline of exploration projects
globally including in Gabon in Africa, Latin America and
Australia.
Our three Pilbara mining hubs are connected by 760
kilometres (km) of rail to Herb Elliott Port and the Judith
Street Harbour towage infrastructure in Port Hedland. As
a major supplier of iron ore to the Chinese steel industry,
we are now shipping at an annual rate of over 190 million
tonnes (Mt) with more than two billion tonnes of iron ore
shipped since 2008.
By 2030, our target is to have our Australian iron ore
operations running on green energy and achieve Real Zero
Scope 1 and 2 terrestrial emissions. Separately, we have
a net zero Scope 3 emissions target by 2040, addressing
emissions across our value chain.
Our Energy business is building a global portfolio of
renewable green hydrogen and green ammonia projects and
developing green technology solutions. Our Fortescue Zero
technologies are also being developed to be sold to others
to further support the elimination of fossil fuel use globally.
To support funding of our projects, we have established a
green energy investment accelerator platform, Fortescue
Capital, that is headquartered in New York.
As our business develops globally, our commitment to
building thriving communities expands with us. Delivering
positive social and economic change through training,
employment and business development opportunities is a
key focus for Fortescue. This is evident through initiatives
such as our Billion Opportunities program which has
awarded more than A$5 billion in contracts to Australian
First Nations businesses since it was established in 2011.
Solar and wind locations are
subject to further studies and
regulatory approvals.
FORTESCUE FY24 ANNUAL REPORT | 21
Overview
Operating and
financial review
Ore Reserves and
Mineral Resources
Our approach
to sustainability
climate change
report
Directors’ report
| Remuneration
Report
Financial report
Corporate
governance
Corporate
directory
Western Hub
Our Western Hub includes two mines – Solomon and Eliwana
– near the Hamersley Ranges 60km north of Tom Price and
120km west of the Chichester Hub.
Solomon commenced operation in 2012, while Eliwana
(located 140km west of Solomon) opened in December
2020. With its innovative low profile designed OPF and dual
stacker reclaimer, Eliwana has the capacity to direct load up
to 9,000 tonnes (t) per hour.
Together, these mines have a production capacity of around
100mtpa.
Iron Bridge
Iron Bridge is Fortescue’s first magnetite mining operation
and is located 145km south of Port Hedland.
Unlike Fortescue’s hematite operations, Iron Bridge
produces a wet concentrate product which is transported to
Port Hedland through a 135km-long specialist slurry pipeline
where dewatering and materials handling occurs. It also
includes a return water pipeline.
Iron Bridge is an unincorporated joint venture between FMG
Magnetite Pty Ltd (69 per cent) and Formosa Steel IB Pty Ltd
(31 per cent).
Green Metal Project
Located at Christmas Creek, the Green Metal Project
represents a significant step forward in Fortescue’s ambition
to produce green metal at a commercial scale in the Pilbara.
It will use renewable energy and green hydrogen reduction
technology together with an electric smelting furnace to
produce high-purity green metal that will be suitable for use
in almost any steel plant globally.
Fortescue defines ‘green metal’ as metal ore mined and
processed into metal using renewable energy and with near
zero carbon emissions. This green metal definition similarly
applies to processing iron ore into iron.
METALS
One of the world’s largest
producers of iron ore
Established in 2003, Fortescue was founded as a metals
company. Since our first ore was produced at Cloudbreak
in 2005, we have expanded our Pilbara mining operations,
delivering both hematite and magnetite products to the
international market.
Hedland operations
Our Herb Elliott Port at Port Hedland includes five operating
berths with current approvals to export up to 210 million
tonnes per annum (mtpa) of iron ore.
Our fleet of 10 tugs, based at our Judith Street Harbour
towage facility, is critical to the safe operation of
our shipping activities, including our fleet of eight
260,000t-capacity Fortescue ore carriers.
Each year, we load and ship more than 970 carriers of iron
ore from Herb Elliott Port, significantly contributing to Port
Hedland’s status as the world’s largest bulk export port by
tonnage.
Chichester Hub
Our Chichester Hub in the Chichester Ranges includes two
mines, Cloudbreak and Christmas Creek, which have an
annual production capacity of around 100mtpa from three
ore processing facilities (OPFs).
Trial iron ore mining commenced at Cloudbreak in October
2005 followed by first iron ore production in May 2008.
Christmas Creek is now home to Fortescue’s Green Energy
Hub and is the site of the Green Metal Project.
A 60 megawatt (MW) solar farm contributes power to
daytime operations at the Chichester Hub, displacing
around 100ML of diesel every year.
Overview
FORTESCUE FY24 ANNUAL REPORT | 22
Using hydrogen produced at our existing hydrogen facility at
Christmas Creek, annual production is expected to be more
than 1,500t, with first production anticipated in 2025.
Locating the project at Christmas Creek will allow Fortescue
to demonstrate a ‘green pit to product’ supply chain, with
the Company’s green mining fleet able to be paired with
green metal making. The ironmaking technology will support
Fortescue’s magnetite and hematite ores.
Integrated Operations
Our Fortescue Hive is a purpose-built integrated operations
centre in Perth which brings together people, process and
technology across our supply chain.
The Hive operates 24 hours a day, seven days a week, using
advanced mining technology to remotely and safely control
fixed plant and autonomous mining equipment, as well as
our port and rail facilities across our Pilbara operations.
The Hive was commissioned in March 2020. It includes
four specialist departments – Mine Control and Systems
(autonomous drills and haul trucks), Port and OPF
Control, Instrumentation and Process Control, and Energy
Operations.
The Hive is a key launchpad for artificial intelligence (AI)
at Fortescue, which is driving significant value across
the business. This includes using AI to predict outcomes
and support better decision-making, optimise plans and
schedules and improve overall performance.
Renewable power AT our mining
operations
Through our Pilbara Energy Connect (PEC) project, we
have integrated our stationary energy requirements in the
Pilbara into an efficient network. The initial phase included
the construction of a 100MW solar farm at North Star
Junction, and 500km of transmission lines and associated
substations. This is the first of around 1.5 gigawatts (GW) that
we will build before the end of the decade.
As we continue to decarbonise our operations, our focus
is now on expanding the PEC infrastructure to provide an
integrated transmission network that will enable renewable
electricity generated at any of Fortescue’s sites to move
between our operations.
To date, the following decarbonisation projects have
commenced:
1. Construction of approximately 140km of 220 kilovolt (kV)
transmission lines, and necessary substations, to supply
both our Eliwana and Flying Fish mining hubs
2. Early design and procurement for approximately 110km of
220kV transmission lines and associated substations, to
supply our Cloudbreak and Christmas Creek mines
3. Design of the Cloudbreak 130MW solar farm
4. The installation of the 50MW/250MWh Battery Energy
Storage System (BESS) to support the North Star Junction
solar plant, and provide renewable energy at night
5. The design and construction of a 20MW/120MWh BESS
to support the Eliwana and Flying Fish mining hubs, and
provide renewable energy at night.
Belinga Iron Ore Project, Gabon
The Belinga Project in north-east Gabon is potentially one of
the largest undeveloped high grade hematite deposits in the
world. Fortescue began exploration in 2022 with activities
focused on exploration drilling to support a feasibility study.
First ore was shipped during the pilot production phase in
FY24 and the current focus is on exploration and studies.
Delivering local opportunities for the people of Gabon is a
top priority.
Ivindo Iron SA is the operating entity for the Belinga Project,
with Fortescue holding a 72 per cent direct interest in the
company.
Critical minerals and iron ore
exploration
Fortescue was founded as an exploration company and
we still believe that early stage exploration is the key to
unlocking significant value. 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
resource inventory. During FY24, activities focused on
advanced exploration at Mindy South, Wyloo North and
White Knight. In addition, near-mine exploration continues to
be a focus at both Solomon and the Chichester Hub.
In the critical minerals portfolio, Fortescue has an exploration
focus on copper, lithium and rare earths. Exploration drilling
is active in multiple jurisdictions, including Argentina, Chile,
Brazil, Peru and Australia. Other exploration activities are
progressing across the broader Latin American portfolio,
and in Australia, Canada and Portugal.
FORTESCUE FY24 ANNUAL REPORT | 23
Overview
Operating and
financial review
Ore Reserves and
Mineral Resources
Our approach
to sustainability
climate change
report
Directors’ report
| Remuneration
Report
Financial report
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Corporate
directory
Arizona Hydrogen, USA
Located in Buckeye, Arizona, the Arizona Hydrogen project
is Fortescue’s first venture into liquid green hydrogen
production in the USA.
This fast-to-market project is set to commence construction
in the second half of 2024 and is expected to achieve first
production of liquid green hydrogen in 2026. The 80MW
Stage One plans to produce up to 30t of green hydrogen per
day.
Arizona Hydrogen is strategically positioned to contribute to
the decarbonisation of the heavy-duty road transportation
sector in the USA. The projects will also help to provide a
solution to California’s Advanced Clean Fleets regulation,
which prohibits the sale of internal combustion engine
trucks beginning in 2036, further boosting demand for
hydrogen fuel cell vehicles and liquid green hydrogen.
Holmaneset Project, Norway
The Holmaneset Project is in the feasibility phase, moving
quickly towards a FID on a 300MW green ammonia facility.
Renewable energy has been secured via a long-term
conditional Power Purchase Agreement with Statkraft and
the project is currently targeting construction to commence
in 2025 and operations as early as 2027.
The Holmaneset project has been awarded a grant of up to
€204 million from the EU Innovation Fund.
PecÉm Project, Brazil
Pecém is a green hydrogen project which will be based at
the Industrial and Port Complex of Pecém, Ceará.
The Project has advanced to the feasibility phase and
commenced the front end engineering design process.
Pecém will have an estimated production capacity of 837t of
green hydrogen per day.
ENERGY
Developing green energy projects to help
the world eliminate fossil fuels
Fortescue Energy is our global green energy business
focused on producing profitable green energy projects
and the green technologies needed to accelerate global
decarbonisation.
Fortescue Energy comprises the integrated segments of
Green Energy, Fortescue Zero and Fortescue Capital.
GREEN ENERGY
Fortescue is committed to green hydrogen and its
derivatives, maintaining a portfolio of projects which show
significant potential for decarbonisation and economic
growth. These projects will progress as power prices fall
sufficiently to bring them to economic viability, and the
global demand for green hydrogen increases.
As we lead the world in industrial decarbonisation, we
will focus initially on four green hydrogen projects across
Australia, the United States of America (USA), Norway and
Brazil. Fortescue also has prospective projects in Morocco,
Oman, Egypt and Jordan under consideration.
Overview
FORTESCUE FY24 ANNUAL REPORT | 24
Gladstone PEM50 Project, Queensland,
Australia
The Gladstone PEM50 Project is a two-stage 50MW green hydrogen project
which will operate alongside Fortescue’s Gladstone Electrolyser Manufacturing
(GEM) Centre.
PEM50 will use Fortescue’s own Proton Exchange Membrane (PEM) technology
to produce up to 22t of green hydrogen per day when operational.
Construction of the US$150million facility commenced in 2024, with first
production of green hydrogen expected in 2025.
FORTESCUE FY24 ANNUAL REPORT | 25
Overview
Operating and
financial review
Ore Reserves and
Mineral Resources
Our approach
to sustainability
climate change
report
Directors’ report
| Remuneration
Report
Financial report
Corporate
governance
Corporate
directory
FORTESCUE ZERO
Technical excellence and innovation
is at the heart of everything that
Fortescue does.
Fortescue Zero is the green technology and engineering
services business, creating the solutions required to
enable a zero emissions future. It is the driver for technical
innovation, engineering, testing and manufacturing services
to deliver energy efficient performance.
We have the benefit of learning from some of the most
demanding sectors, such as motorsports and mining. We
translate these into technologies that will establish a viable
and profitable path for the road to Real Zero.
We operate across a wide range of sectors from automotive
and motorsport, aerospace and defence, rail, off highway,
and energy, working in close collaboration with our
customers and partners to meet the key engineering
challenges of the 21st century – focusing on mobility, energy
storage, sustainability and efficiency.
Power Systems
At our global facilities in the UK, USA and Australia we are
developing and building new technologies and products
that will not only power the decarbonisation of our own
mining operations, but provide solutions for other heavy
emitters as well. We’re already turning our ideas into reality,
showing the world that decarbonisation is possible on an
industrial scale, and it is also possible to do it profitably.
Our ability to develop our ideas rapidly is born from a
heritage in motorsport and mining, two industries that
operate at extremes. The track is where we continue to drive
our innovation and ideas, before putting it to the test with 20
years of experience on our mine sites in the Pilbara.
During the year, our 240t battery electric haul truck
prototype was successfully tested and deployed, running
on a bespoke battery system and powertrain designed
in-house. Our hydrogen-powered battery electric haul truck
prototype is undergoing site-based testing at our Christmas
Creek site.
The learnings from this are informing our future fleet of zero
emissions trucks that we are delivering with Liebherr.
Also, in partnership with Liebherr, we are working on
developing and validating a fully integrated Autonomous
Haulage Solution with the aim to be the first to operate
autonomous zero emissions vehicles globally.
The Fortescue Zero product portfolio, includes high
performance batteries, High Voltage DCDC Convertors and
Fast Chargers which can be made available for a wide range
of applications, outside of heavy industry and mining.
Battery Intelligence is also a key future market which
Fortescue Zero is starting to unlock with its Elysia product.
Fortescue has signed a multi-year deal with Jaguar Land
Rover to use this cutting-edge battery intelligence software.
The Green Pioneer, Fortescue’s dual-fuelled ammonia-
powered marine vessel, is driving innovation in green
shipping. It was a winner at this year’s World Hydrogen
Awards, after successfully completing trials and being
certified in the Port of Singapore. This is a significant
milestone and brings the world one step closer to green
ammonia as a future fuel for green shipping.
Hydrogen Systems
Hydrogen Systems will help our planet step beyond fossil
fuels by harnessing the world’s renewable energy resources
to produce green hydrogen. Our philosophy is to develop
the most efficient and scalable solutions through our
global research and development (R&D) programs that are
durable, safe and reliable to meet the highest demands.
Our Hydrogen Systems business will offer a diverse array of
electrolyser products, systems and services, encompassing
multiple, cutting-edge technology types and membrane
developments.
In FY24, Fortescue officially opened the 2GW GEM Centre,
which is Australia’s first fully automated electrolyser
manufacturing facility. Hydrogen Systems has also signed
contracts for the sale of our first electrolysers, produced
from this manufacturing facility.
FORTESCUE CAPITAL
Fortescue Capital is Fortescue’s green energy investment
accelerator platform headquartered in New York City.
The platform is integral to Fortescue’s commitment to
deliver green energy projects, technology investments and
decarbonisation initiatives.
Established as a green asset management business,
Fortescue Capital aims to raise third-party capital for
projects and companies that are originated by Fortescue
Energy. These potential capital partners include sovereign
wealth funds, pension funds, endowments, insurance
companies and ultra-high net worth family offices.
Overview
FORTESCUE FY24 ANNUAL REPORT | 26
IRON ORE VALUE CHAIN
EXTRACTION
AND
RECOVERY
Innovative use of
technology suitable
to Fortescue’s deposits
SHIPLOADING
3 shiploaders and
5 berths at Port Hedland
maximise outload
capacity and utilisation
Shared facilities in Gabon
PORT SALES
FMG Trading
Shanghai Co. Ltd
(FMG Trading)
facilitating port sales
in China
MODELLING,
PLANNING AND
DEVELOPMENT
PROCESSING
Ore processing
facility design and
wet processing
optimise output
MINE TO PORT
Dedicated heavy haul
rail in the Pilbara
Concentrate pipeline
for Iron Bridge
Truck haulage
in Gabon
MARKETING
Helping customers
achieve best value
in use
BLENDING AND
STOCKPILING
Port design facilities
blending and stockpiling
of product suite
Concentrate handling
facility for Iron Bridge
SHIPPING
AND TOWAGE
8 Fortescue Very Large Ore
Carriers (VLOCs)
Delivery to Fortescue’s
international customers’
specifications
Towage fleet at Port Hedland
provides safe and reliable
towage services
Rehabilitation
Mine closure and
decommissioning
EXPLORATION
AND DISCOVERY
Challenging geological
thinking to identify
valuable deposits
We are working hard developing our decarbonisation program and trialling new technologies and products to
decarbonise our iron ore value chain. Read more about our progress in our Sustainability Report and Climate Transition
Report available on our website at fortescue.com.
OPERATING
AND
FINANCIAL
REVIEW
In just 18 months the
Green Pioneer has
been converted to
run in dual-fuel mode
as it moves away
from fossil fuels.
Overview
Operating and
financial review
FORTESCUE FY24 ANNUAL REPORT | 27
Ore Reserves and
Mineral Resources
Our approach
to sustainability
climate change
report
Directors’ report
| Remuneration
Report
Financial report
Corporate
governance
Corporate
directory
KEY PERFORMANCE INDICATORS
Operating and financial review
FORTESCUE FY24 ANNUAL REPORT | 28
OPERATING
AND FINANCIAL
REVIEW
¹ Fortescue Metals
HEMATITE
SAFETY
1.3
TOTAL RECORDABLE
INJURY FREQUENCY RATE¹
PRODUCTION
191.6Mt
IRON ORE
SHIPPED
C1 COST
18.24
/wet metric tonne
US$
5.7bn
US$
ATTRIBUTABLE TO
EQUITY HOLDERS
UNDERLYING
NET PROFIT
AFTER TAX
CASH ON HAND
4.9bn
US$
Overview
Operating and
financial review
FORTESCUE FY24 ANNUAL REPORT | 29
Ore Reserves and
Mineral Resources
Our approach
to sustainability
climate change
report
Directors’ report
| Remuneration
Report
Financial report
Corporate
governance
Corporate
directory
The health, safety and wellbeing of the Fortescue Family is a key
Value, and our focus remains on ensuring everyone goes home
safe and well after every shift.
SAFETY
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 and welcoming
working environment for all employees and contractors.
Fortescue Metals’ rolling 12-month total recordable injury
frequency rate (TRIFR) is 1.3 at 30 June 2024.
Safety culture
Guided by our Values of Safety and Family, Fortescue is
committed to continuing to improve safety performance,
including a focus across the following areas:
• strengthening safety leadership through specific action
plans to address the priorities identified by the annual
Company-wide people experience survey (Fortescue
People Experience Survey)
• the continued reduction of the workplace injury and
fatality risk profile through our major hazards program and
exposure and risk reduction activities delivered every day
by our frontline workforce
• taking a data driven approach to identify and prioritise
controls to manage safety risks, including the use of AI
and advanced data analytics to drive improved safety
performance
• continuing to improve the physical and mental health of
our people
• continuing to improve controls for psychosocial hazards in
our workplaces.
Fortescue continues to implement initiatives to enhance
the safety, culture and health of people working at the
Company’s operations and workplaces.
Operating and financial review
FORTESCUE FY24 ANNUAL REPORT | 30
(million tonnes)
FY24
FY23
Movement %
Hematite
Overburden removed
324
323
0%
Ore mined
204
218
(6%)
Ore processed
188
192
(2%)
Hematite and Magnetite
Shipments
192
192
(0%)
Ore sold
191
192
(1%)
FORTESCUE
METALS
Fortescue achieved shipments of 192Mt in FY24 with a
second half record of 97Mt. Second half results include
the impact of the derailment in early Q3 FY24, whereby a
recovery plan was successfully implemented to achieve
FY24 shipped volumes. Fortescue’s recovery plan focused
on value optimisation through flexibility and improvements
in the supply chain combined with refinements in the
product portfolio. Inclusive in Fortescue’s FY24 shipments
was 1.2Mt of Iron Bridge Concentrate, reflecting the
successful transition from project to the operations phase,
and 190.4Mt of hematite.
Fortescue’s total sales were 191Mt in FY24. Sales via
Fortescue’s wholly owned Chinese sales entity, FMG Trading
Shanghai, were 11.3Mt in FY24 (FY23: 16.7Mt). This entity
allows Fortescue to expand its iron ore sales channels
through the direct supply of products to Chinese customers
in smaller volumes, in Renminbi, directly from regional ports.
Hematite ore mined decreased in FY24 to 204Mt (FY23:
218Mt) while waste mining is consistent year on year,
reflecting an increase to strip ratio (FY24: 1.6x, FY23: 1.5x).
Mining volumes and strip ratio reflect the life cycle of
existing operations at the Chichester and Western Hub and
are consistent with the requirements to support Fortescue’s
integration of its operations with its marketing strategy.
Hematite ore processing reduced marginally in FY24 to
188Mt (FY23: 192Mt), reflecting consistent performance and
reliability through existing ore processing facilities (OPFs).
Fortescue’s hematite operations have a combination of both
wet and dry OPFs aligning with the characteristics of the ore
bodies.
Iron Bridge transitioned to operational production in
August 2023 and the first shipment of high-grade (67%
Fe) magnetite product was in September 2023. Iron
Bridge combines innovative and proven technology for
the production of magnetite concentrate that provides
Fortescue an enhanced product range. In FY24, 13.0Mt of
ore was mined at Iron Bridge, with Iron Bridge Concentrate
production of 2.1Mt and shipments of 1.2Mt (100 per cent
basis). The Iron Bridge operation when operating at full
capacity aims to deliver 22Mt per annum of high-grade, low-
impurity 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).
Fortescue’s Belinga project in Gabon, is an incorporated
joint venture entity, with Ivindo Iron SA. In FY24 the Belinga
Project made a shipment through the Gabon Joint Venture
Company, Ivindo Iron SA, representing the first time
Fortescue has exported iron ore outside of Australia.
Overview
Operating and
financial review
FORTESCUE FY24 ANNUAL REPORT | 31
Ore Reserves and
Mineral Resources
Our approach
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Report
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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.
The majority of Fortescue’s customers are in China as it
continues to represent more than 50 per cent of global
steel production. Domestic steel demand is supported by
infrastructure, manufacturing and renewable energy sectors,
in addition to direct and indirect steel exports. While China
remains Fortescue’s core focus, the Company continues to
explore sales to other important markets.
Market dynamics and industry structures continue to evolve,
with Fortescue adapting its commercial strategy to optimise
value over time, to manage risk and market volatility.
Innovation and Technology
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, optimise plans and schedules and
improve overall performance, the expansion of autonomy to
fixed plant and non-mining equipment, and the application
of relocatable conveyor technology.
Through Fortescue Zero, Fortescue is making significant
progress in developing green technology solutions in house.
Decarbonisation
Key considerations for our pathway to decarbonise include
development of technology, future equipment acquisitions
and potential regulatory changes. Future changes to
Fortescue’s decarbonisation strategy may impact key
estimates and changes to asset carrying values in the
Group’s financial statements.
Fortescue has a plan to reach Real Zero emissions by
2030, and has so far identified the solutions it plans to
adopt to eliminate approximately 90 per cent of terrestrial
Scope 1 and Scope 2 emissions from its Australian iron
ore operations. Our decarbonisation plan includes the
deployment of an additional 2-3 gigawatt (GW) of renewable
energy generation and battery storage, in addition to the
deployment of a green mining fleet and locomotives.
Key milestones achieved during FY24 include:
• commissioning of Australia’s first operational electric
excavator at Fortescue’s Cloudbreak operation in
partnership with Liebherr. There are three 400t electric
excavators now in operation at Fortescue with two of these
at Solomon and one at Cloudbreak
• construction and start of commissioning of a 100 MW solar
farm at North Star Junction. North Star will complement
the 60MW solar farm commissioned in 2021 as part of the
Chichester Solar Gas Hybrid Project
• completion of the first phase testing of the battery power
system in our battery electric haul truck prototype,
Roadrunner, at our Green Energy Hub at Christmas Creek
• completed onsite commissioning of our fast charger
prototype and transferred at 3MW into our 240t battery
electric haul truck, Roadrunner
• development and commissioning of a hydrogen fuel cell
battery electric haul truck (Europa) prototype. Delivered
in collaboration with Liebherr, Europa is a T 264 Liebherr
haul truck and contains a Fortescue Zero battery and 500
kilowatts of fuel cells. The prototype can store over 380
kilograms of liquid hydrogen
• commenced onsite commissioning of our prototype
Offboard Power Unit which successfully powered a
retrofitted Liebherr electric excavator utilising hydrogen
• completed onsite commissioning of our ammonia powered
locomotive. Mainline testing is now underway
• completed validation testing of the KTA50 Marine Engine
Land Based Test Spread with DNV Class approval.
There are, and there will continue to be, technical challenges
related to decarbonisation. As part of addressing these
challenges, existing technology will need to be adapted and
applied in new ways, and entirely new technology will also
need to be developed. Technology availability (including
supply chain availability of relevant goods and services)
and technology maturity are therefore key issues. These are
challenges the team at Fortescue are focused on overcoming,
both to deliver on our own Real Zero ambitions, but also to
facilitate the decarbonisation of heavy industry more broadly.
Fortescue’s capital expenditure on decarbonisation in FY24
was US$224 million including Pilbara Energy Connect (PEC).
More information can be found in our FY24 Climate Change
report.
Operating and financial review
FORTESCUE FY24 ANNUAL REPORT | 32
Metals Projects
Belinga Iron Ore Project
Exploration was the dominant activity for FY24, with a focus
on both diamond and reverse circulation drilling programs.
As of 30 June 2024, over 45,000 metres of reverse
circulation and 7,000 metres of diamond core have been
drilled. The results have continued to show that this project
has the potential to be significant scale and high grade. The
focus is on exploration and studies to advance potential
designs for large scale development.
Ivindo Iron SA is the operating company for the Belinga
project, and Fortescue has a 72 per cent interest in this
company.
Green Metal Project
Utilising green hydrogen and green electricity from solar
generation, iron ore production capacity and existing
infrastructure and technical capacity, Fortescue is
developing a Green Metal Project at Christmas Creek.
Annual production is expected to be more than 1,500 tonnes
of green metal, with first production anticipated in 2025.
Total project capital expenditure of up to US$50 million.
Critical Minerals and Iron Ore Exploration
Iron ore exploration activity in the Pilbara during FY24
focused on Mindy South, White Knight and Wyloo North.
In addition, near mine exploration continues to be a focus
at both Solomon and Chichester Hub. Studies continue to
progress in these areas.
Early-stage studies and option analysis are underway for
near-mine opportunities, as well as strategic assessments
to support the future portfolio. Baseline studies continue
with investigation to support approvals, while also working
closely with Traditional Custodians and stakeholders.
In the critical minerals portfolio, Fortescue is ramping
up exploration activities with a key focus on copper, rare
earths and lithium. Additionally, a Farm-in and Joint Venture
agreement was announced with Magmatic Resources Ltd
on the Myall porphyry copper project in New South Wales,
which resulted in Fortescue acquiring a 19.9 per cent stake
in the company.
Exploration in South America focused on drilling at several
projects in Argentina and Chile as well as opportunies
in Peru in 2024. A drilling program targeting rare earth
elements concluded in Brazil, with other regional exploration
activities ongoing.
Total exploration and studies capital expenditure in FY24
was US$266 million.
Overview
Operating and
financial review
FORTESCUE FY24 ANNUAL REPORT | 33
Ore Reserves and
Mineral Resources
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Fortescue Energy is working to eliminate emissions, not
only from Fortescue’s operations, but from our planet.
That is why Fortescue has green energy projects under
development globally. We continue to establish the building
blocks of a new global renewable energy value chain, by
developing green technologies for trucks, trains, planes,
ships, electrolysers, solar, cables, wind, batteries, hydrogen
fuel cells and the digital industry.
Fortescue Energy comprises the integrated segments of
Green Energy, Fortescue Zero and Fortescue Capital.
Green Energy – green electrons
and green molecules
Fortescue’s 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.
Following FID in November 2023, Fortescue has turned
the soil to launch Arizona Hydrogen, a green hydrogen
project in the United States. This is an 80MW electrolyser
and liquefaction facility, with production capacity of up to
11,000 tonnes per annum of liquid green hydrogen. Capital
expenditure of up to US$550 million was approved, with first
production expected in 2026.
Construction has commenced on the PEM50 project in
Gladstone, Australia. This is a two-stage 50MW green
hydrogen project, with total capital expenditure of up to
US$150 million across both phases. Phase one comprises
the installation of a 30MW electrolyser plant, utilising
Fortescue’s own Proton Exchange Membrane (PEM)
electrolysers. First production of green hydrogen is
anticipated in 2025. Phase two will see the remaining 20MW
capacity installed and commissioned in 2028. The 50MW
plant is projected to have production capacity of 8,000
tonnes per annum of green hydrogen.
The Board also agreed to fast-track projects in Norway
and Brazil, moving them into the feasibility stage
and progressing with front end engineering designs.
Holmaneset is a green ammonia project in Norway, which
has received backing and funding from the European
Union, and our Pecém Project in Brazil will be able to take
advantage of the country’s green hydrogen regulations.
FORTESCUE
ENERGY
Fortescue Zero – green
technologies
Fortescue Zero is the green technology and engineering
services business, creating the solutions required to drive
a zero emissions future. Such technologies include PEM
electrolysers and balance of systems, high performance
battery systems and digital battery intelligence software.
During the year, the 240t battery electric haul truck prototype
was successfully tested and deployed, running on a bespoke
battery system and powertrain designed in-house. A
hydrogen-powered battery electric haul truck prototype
also operated on hydrogen for the first time and will soon be
transported to our Christmas Creek site to undergo site-
based commissioning and testing.
The learnings from this will help inform our future fleet of zero
emissions trucks that we are delivering with Liebherr.
Also, in partnership with Liebherr, we are working on
developing and validating a fully integrated autonomous
haulage solution , through which we are aiming to be the first
to operate zero emissions vehicles globally.
Fortescue also officially opened its 2GW electrolyser
manufacturing facility in Gladstone, Australia. Fortescue
has signed contracts for the sale of our first electrolysers,
produced from this manufacturing facility, with a fully
automated production line.
We have also signed a multi-year deal with Jaguar Land Rover
to use Fortescue’s cutting-edge battery intelligence software,
Elysia, in its next-generation electric vehicles.
Fortescue Capital – green
investment accelerator
platform
Fortescue Capital is Fortescue’s green energy investment
accelerator platform headquartered in New York City.
The platform is integral to Fortescue’s commitment to
deliver green energy projects, technology investments and
decarbonisation initiatives.
Fortescue Capital was established in FY24 which saw the
appointment of its leadership team as well as formation of key
relationships.
Operating and financial review
FORTESCUE FY24 ANNUAL REPORT | 34
During the year ended 30 June 2024, Fortescue delivered a net profit after tax
attributable to equity holders of the Company of US$5,683 million and earnings
per share of 185 US cents.
GROUP
FINANCIAL
PERFORMANCE
Increase in Underlying EBITDA reflects performance of the Metals segment with hematite shipments of 190.4Mt and
magnetite shipments of 1.2Mt. Realised prices increased in FY24 due to a higher iron ore index price. There was strong
demand for Fortescue’s products with a hematite revenue realisation of 86 per cent of the Platts 62% CFR index. FY24
financial performance was impacted through inflationary pressures, an increase in strip ratio and cost impacts from the
recovery from the derailment in the third quarter. FY24 also included the transition of Iron Bridge into the production phase.
Financial performance during the year ended 30 June 2024:
Key metrics
2024
2023
Revenue, US$ millions
18,220
16,871
Underlying EBITDA¹, US$ millions
10,708
9,963
Earnings per share, US cents
185
156
Earnings per share, AUD cents²
282
231
Impairment expense after tax, US$ millions
-
726
Net profit after tax, US$ millions
5,664
4,796
Underlying net profit after tax, US$ millions
5,664
5,522
Underlying attributable net profit after tax, US$ millions
5,683
5,524
Underlying earnings per share, US cents
185
180
Underlying earnings per share, AUD cents²
282
267
Hematite average realised price, US$/dmt
103
95
Hematite C1 costs, US$/wmt
18.24
17.54
Underlying EBITDA margin, US$/dmt (excl Fortescue Energy)
65
60
Key ratios
Underlying EBITDA margin, %
59
59
Return on equity, %
30
27
¹ Refer to page 38 for the reconciliation of Underlying EBITDA to the financial metrics reported in the financial statements under Australian Accounting
Standards.
² Australian dollar earnings per share is calculated by translating the US dollar earnings per share at the average exchange rate for the year of
AUD:USD 0.6558 (FY23: AUD:USD 0.6737).
Overview
Operating and
financial review
FORTESCUE FY24 ANNUAL REPORT | 35
Ore Reserves and
Mineral Resources
Our approach
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report
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Financial report
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Corporate
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Segment Reporting
Fortescue’s operating segments are:
• Metals: Exploration, development, production,
processing, sale and transportation of iron ore, and the
exploration for other minerals.
• Energy: Undertaking activities in the global development
of green electricity, green hydrogen, green ammonia
projects, as well as green technology development and
manufacturing.
Corporate includes cash, intercompany loans which
eliminate at consolidation, debt and tax balances which are
managed at a Group level, together with other corporate
activities. Corporate is not considered to be an operating
segment and includes activities that are not allocated to
other operating segments.
Transfer prices between segments are set on an arm’s length
basis in a manner similar to transactions with third parties.
Where segment revenue, expenses and results include
transactions between segments, those transactions are
eliminated on consolidation and are not considered material.
The consolidated Metals and Energy results for the year
ended 30 June 2024 are provided below and further
reported on page 157 in the financial report.
Metals
Energy
Corporate
Consolidated
US$m
Note1
2024
2023
2024
2023
2024
2023
2024
2023
Revenue
3
18,129
16,764
91
107
-
-
18,220
16,871
Underlying EBITDA
11,400
10,545
(659)
(617)
(33)
35
10,708
9,963
Depreciation and
amortisation
5,6
(2,144)
(1,744)
Finance income
7
218
149
Finance expense
7
(386)
(275)
Exploration, development
and other
6
(96)
(170)
Impairment expense
6
-
(1,037)
Income tax expense
14(a)
(2,636)
(2,090)
Net profit after tax
5,664
4,796
¹ Notes to the accompanying financial statements
Financial performance
Operating and financial review
FORTESCUE FY24 ANNUAL REPORT | 36
Note1
2024
2023
Total iron ore revenue, US$ millions
3
16,405
15,318
Total shipping revenue, US$ millions
3
1,613
1,356
Manufacturing and engineering services revenue, US$ millions
3
91
106
Other revenue, US$ millions
3
111
91
Operating sales revenue, US$ millions
18,220
16,871
Hematite sales performance
Shipments - Hematite, million wmt
190.4
192.0
Ore sold - Hematite, million wmt²
190.2
192.4
Average Platts 62% CFR index, US$/dmt
119
110
Average realised price Pilbara Hematite, US$/dmt
103
95
Magnetite sales performance (including joint venture partner
share)
Shipments – Iron Bridge Magnetite, million wmt
1.2
-
Ore sold – Iron Bridge Magnetite, million wmt²
1.1
-
Average 65% Fe CFR Platts index, US$/dmt
131
-
Average realised price Magnetite, US$/dmt
137
-
¹ Notes to the accompanying financial statements.
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 total shipments for the year ended 30 June 2024 were in line with FY23 at 191.6Mt (FY23: 192.0Mt). Operating sales
revenue for FY24 increased to US$18,220 million (FY23: US$16,871 million) as the hematite realised price increased nine per
cent to US$103/dry metric tonne (dmt) (FY23: US$95/dmt). The Platts 62% CFR Index averaged US$119/dmt in FY24 which is an
increase of nine per cent over the prior year (FY23: US$110/dmt).
The factors influencing realised prices in FY24 include:
• higher index price compared to the prior year
• robust steel production in China which underpinned firm iron ore demand, especially in calendar 2023
• sustained high steel exports from China, as well as steel demand from the manufacturing and infrastructure sectors in China
• sustained low steel margins in China supporting demand for Fortescue products from steelmakers
• product mix, sale timing, and changing alignment between iron ore supply and demand
• actual and anticipated Government policy support in China intended to support economic growth in CY23 and CY24.
Manufacturing and engineering services revenue reflects activities within Fortescue Zero (formerly Fortescue WAE). This is
revenue that is generated external to the Group and decreased to US$91 million in FY24 from US$106 million in FY23.
Other revenue increased to US$111 million in FY24 from US$91 million in FY23 and includes towage services provided by
Fortescue.
REVENUE
Financial performance
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FORTESCUE FY24 ANNUAL REPORT | 37
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Financial performance
PRODUCTION COSTS
The reconciliation of C1 costs and total delivered costs to customers to the financial metrics reported in the financial statements
under Australian Accounting Standards is set out below.
Note1
2024
2023
Mining and processing costs, US$ millions
5
3,102
2,856
Rail costs, US$ millions
5
288
266
Port costs, US$ millions
5
278
251
Production costs³, US$ million
3,668
3,373
Hematite ore sold, million wmt
190
192
Hematite C1 costs, US$/wmt
18.24
17.54
Shipping costs, US$ millions
5
1,531
1,455
Government royalty², US$ millions
5
1,209
1,124
Shipping and royalty, US$millions
2,740
2,579
Hematite ore sold, million wmt
190
192
Shipping and royalty, US$/wmt
14
13
Total delivered cost, US$/wmt
33
31
Total delivered cost, US$/dmt
37
34
¹ Notes to the accompanying financial statements.
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.
³ Production costs include operating costs for both the Iron Bridge and the Belinga Iron Ore project (FY24: US$201 million, FY23: nil), and these costs are not
included in the calculation of hematite C1 costs.
Hematite C1 costs averaged US$18.24/wmt for the year, four per cent higher compared to the prior period (FY23: US$17.54/wmt).
The increase in C1 costs reflects market an increase in strip ratio to 1.6x in FY24 from 1.5x in FY23. Furthermore, the C1 costs also
reflects market inflationary pressures, including labour cost pressures due to significant demand for skilled labour across the
resources industry combined with increases in mining services.
These cost pressures were partially offset through ongoing focus on productivity and favourable AUD to USD exchange rates
averaging 0.66 in FY24 compared to 0.67 in FY23.
Shipping costs have increased from US$1,455 million in FY23 to US$1,531 million in FY24, reflecting the increase in market
freight rates. To meet Fortescue’s shipping commitments, Fortescue employs a mix of shipping options which includes the use of
Fortescue-operated ore carriers, chartering third-party vessels and free on board shipments.
Fortescue has actively managed cost increases throughout the cycle while also utilising the capacity in its supply chain to
generate consistent shipments, aligning with Fortescue’s integrated operating and marketing strategy focusing on maximising
value through the market cycle.
Operating and financial review
FORTESCUE FY24 ANNUAL REPORT | 38
Financial performance
UNDERLYING EBITDA
Underlying EBITDA, defined as earnings before interest, tax, depreciation and amortisation, exploration, development and
other expenses, is used as a key measure of the Company’s financial performance. During the FY24, Fortescue’s operations
generated Underlying EBITDA of US$10,708 million (FY23: US$9,963 million). The reconciliation of Underlying EBITDA to the
financial metrics reported in the financial statements under Australian Accounting Standards is presented below.
Note1
2024
US$m
2023
US$m
Operating sales revenue
3
18,220
16,871
Cost of sales excluding depreciation and amortisation
5
(6,575)
(6,109)
Net foreign exchange (loss)/gain
4,6
(31)
48
Administration expenses
6
(416)
(288)
Research expenses
6
(495)
(553)
Net other income²
4,6
26
2
Share of loss from equity accounted investments
22(c)
(21)
(8)
Underlying EBITDA
10,708
9,963
Finance income
7
218
149
Finance expenses
7
(386)
(275)
Depreciation and amortisation
5,6
(2,144)
(1,744)
Exploration, development and other expenses
6
(96)
(170)
Impairment
6
-
(1,037)
Income tax expense
14(a)
(2,636)
(2,090)
Net profit after tax
5,664
4,796
Underlying net profit after tax
5,664
5,522
¹ Notes to the accompanying financial statements.
² Other income excluding net foreign exchange gain less fair value change in financial instruments and other within Note 6 ‘Other expenses’.
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UNDERLYING EBITDA (CONTINUED)
The Underlying EBITDA of US$10,708 million for FY24 represents a margin of 59 per cent (63 per cent for the Metals
segment) and a seven per cent increase on FY23 Underlying EBITDA.
As illustrated in the chart below, Fortescue has maintained strong Underlying EBITDA margins through market cycles,
demonstrating the commitment to and focus on productivity, efficiency and innovation.
Underlying Metals EBITDA by period below (including Iron Bridge Magnetite and excluding Fortescue Energy costs):
Research and administration
expenses
Research expenditure reflects underlying research activities
within Fortescue Energy in the development of green
energy projects and technology as well as research on
decarbonisation. Total Fortescue Energy EBITDA was a
US$659 million loss in FY24.
Depreciation, interest and tax
Key non-operating matters forming part of the financial
result include:
• depreciation and amortisation of US$2,144 million is up 23 per
cent on the prior period (FY23: US$1,744 million) reflecting
increases in sustaining capital expenditure over multiple
financial years and the commissioning of assets including Iron
Bridge in FY24
• net interest expenses of $168 million for FY24 (US$126 million
in FY23) reflects higher interest rates on borrowings and lease
liabilities and lower capitalised interest, offset by an increase
in interest income of US$218 million
• income tax expense for FY24 of US$2,636 million represents
an effective tax rate of 31.8 per cent (FY23: US$2,090 million,
effective tax rate of 30.4 per cent). The increase in income tax
is in line with financial performance and reflects the effects of
taxation on foreign operations.
FY23 Underlying
NPAT
Iron ore and shipping
revenue net of royalty
Mining, rail and
processing costs
Shipping costs
Other operating
revenue and expenses
Research and
administration
Investments
and FX
Net finance expenses
Depreciation and
amortisation
Exploration and
development
Income tax1
FY24 Underlying
NPAT
5,522
1,259
5,664
(295)
Pilbara Operations
(76)
(22)
(70)
(51)
(42)
(400)
74
(235)
UNDERLYING EBITDA
Underlying NPAT Analysis FY23 - FY24 (US$m)
¹ FY24 NPAT v FY23 NPAT tax difference is US$546 million. The chart above adjusts for the tax effect of impairment expense recognised on the Iron Bridge
Cash Generating Unit (CGU) in FY23 (US$1,037 million pre-tax and US$726 million post-tax).
Fortescue Metals Underlying EBITDA/dmt (US$m)
US$/dmt
160
140
120
100
80
60
40
20
0
FY23
60
99
FY21
FY20
52
63
FY22
FY24
65
Underlying EBITDA, US$/dmt
Average Fortescue realised price, US$/dmt
Fortescue realised price, US$/dmt
Average underlying EBITDA, US$/dmt
62% Platts CFR Index, US$/dmt
Operating and financial review
FORTESCUE FY24 ANNUAL REPORT | 40
FINANCIAL POSITION
AND CAPITAL
MANAGEMENT
Key metrics
Note1
2024
US$m
2023
US$m
Borrowings
9
4,585
4,587
Lease liabilities
9
815
734
Total debt
5,400
5,321
Cash and cash equivalents
9
4,903
4,287
Net debt
497
1,034
Equity
9
19,531
17,998
Key ratios
Gearing, %
22
23
Net gearing, %
2
5
1 Notes to the accompanying financial statements.
DEBT AND LIQUIDITY
Debt
Fortescue’s balance sheet is structured on low-cost
investment grade terms. The debt capital structure allows
optionality and flexibility to fund future growth. Total debt as
at 30 June 2024 was US$5,400 million, inclusive of US$815
million of lease liabilities. Gross gearing at 30 June 2024 was
22 per cent (30 June 2023: 23 per cent) and net gearing was
two per cent (30 June 2023: five per cent).
Revolving Credit Facility
The US$1,025 million Revolving Credit Facility has a maturity
date on 28 July 2025, which remains undrawn at 30 June
2024 and 30 June 2023. If drawn, interest accrues based on
a variable rate linked to Secured Overnight Financing Rate
(SOFR) plus a fixed margin and is payable at the end of the
interest period selected with the principal due at maturity.
Syndicated Term Loan
The syndicated Term Loan matures in June 2026, and as at
30 June 2024 had a carrying value of US$968 million (30 June
2023: US$975 million) with a coupon rate linked to SOFR plus
a fixed margin. The facility has principal repayment of one
per cent per annum with early repayment of the facility at
Fortescue’s option without penalty.
Senior Unsecured Notes
Senior unsecured notes, including Fortescue’s Green Bond,
had a carrying value of US$3,617 million at 30 June 2024.
Lease liabilities
Lease liabilities amounted to US$815 million as at 30 June
2024 (30 June 2023: US$734 million). The Group enters into
contractual arrangements for leases of mining equipment,
vehicles, land and buildings as well as other assets.
Overview
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FORTESCUE FY24 ANNUAL REPORT | 41
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Green bond
Eligible Project Allocation
The net proceeds from the US$800 million 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 deliver Fortescue’s
decarbonisation. The allocation across eligible project
categories is in the table below:
Fortescue has allocated US$630 million (FY23: US$537 million)
in net proceeds from the issuance of its Green Bond as at 30
June 2024 to Eligible Green Projects as defined within the
Sustainability Financing Framework. Fortescue is responsible
for the completeness, accuracy, and validity of the information
and metrics presented below.
Cumulative spend at
Eligible Project1
Eligible Category
Region
30 June 2024
US$m
30 June 2023
US$m
Fortescue WAE battery systems²
Energy storage
UK / Australia
205
205
Pilbara Generation Project
Renewable energy
Australia
161
76
Pilbara Transmission Project³
Renewable energy
Australia
183
183
Green Fleet Energy Hub
Clean transportation
Australia
65
58
Battery Electric Locomotives
Clean transportation
Australia
16
15
Total allocated
630
537
Total unallocated
170
263
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 calculation methodology was amended in FY24 and is based on the forecasted percentage of renewable energy utilising the Pilbara Transmission
Project Infrastructure over the maturity profile of the bond, in line with Fortescue’s decarbonisation roadmap. The FY23 comparative spend has been
restated to reflect the updated calculation methodology which has changed from the actual percentage of renewable energy in each period.
The amount attributable to Fortescue WAE was based on forecast revenue at acquisition.
² Represents investment in the development of Fortescue Zero battery storage solutions (formerly Fortescue WAE) in countries including the UK and
Australia.
³ FY23 has been restated from US$60m to US$183m.
Eligible Project details
Fortescue Zero battery systems²: The acquisition of
Fortescue WAE enables us to accelerate the decarbonisation
of our 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 PEC project. This
comprises the installation of a 100MW solar photvoltaic (PV)
array.
Pilbara Transmission Project: The transmission of
solar generated energy from Fortescue’s PEC project
(this excludes any transmission from gas fired energy
generation).
Green Fleet Energy Hub: The Green Fleet Energy Hub
includes a 1.5MW Hydrogen Refuelling Station at Christmas
Creek.
Battery Electric Locomotives: Progress on the
decarbonisation of our rail operations with the purchase
of two battery electric locomotives, and research into the
development of the Infinity Train.
Operating and financial review
FORTESCUE FY24 ANNUAL REPORT | 42
Liquidity
At 30 June 2024, Fortescue had US$5,928 million of liquidity available including US$4,903 million of cash on hand and
US$1,025 million available under the revolving credit facility. Total debt at 30 June 2024 was US$5,400 million, inclusive of
US$815 million of lease liabilities.
Cash flows
2024
US$m
2023
US$m
Cash generated from operations
10,689
10,016
Net cash flows from operating activities
7,919
7,432
Capital expenditure (including joint operations)¹
(2,895)
(3,170)
Net cash flows from investing activities
(2,811)
(3,115)
Free cash flow²
5,108
4,317
¹ Capital expenditure comprises payments for property, plant and equipment and purchases of financial assets offset by minority interest contributions.
² Free cashflow is calculated as net cashflow from operations less cashflow from investing activities.
Cash generated from operations of US$10,689 million was seven per cent higher than the prior period, largely as a result of
higher Underlying EBITDA.
Net cash flows from operations include net interest payments of US$105 million (FY23: US$205 million) and income tax paid
of US$2,665 million (FY23: US$2,379 million).
Capital expenditure including Fortescue Energy investments was US$2,895 million for the financial year (FY23: US$3,170
million). Capital expenditure throughout the period consisted of:
• sustaining and hub development, including maintenance on existing plant and acquisition of replacement heavy mobile
equipment (HME)
• decarbonisation, including expenditure on development of green power and green mobility
• iron ore and iron projects, reflecting the residual expenditure on the Iron Bridge project and expenditure on Pilbara Energy
Connect (PEC)
• exploration and studies, including exploration and feasibility activities in Gabon
• energy, including acquisition of infrastructure and purchase of strategic investments within Fortescue Energy.
Debt maturity profile (US$m)
Senior unsecured notes
Syndicated Term Loan
Green senior unsecured note
968
600
700
1,500
800
FY25
FY26
FY27
FY28
FY29
FY30
FY31
FY32
FY33
The Company’s debt maturity profile at 30 June 2024 is set out in the chart following. Fortescue has no financial maintenance
covenants across all instruments.
Overview
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Share Buy-Back Scheme
In 2018, Fortescue announced the establishment of an on-market share buy-back program of up to A$500 million which
was extended in October 2020 for an unlimited duration. The maximum number of shares which can be bought back is
determined periodically by the Company’s 10/12 limit, being that a company cannot buy back more than 10 per cent of its
voting shares within the span of any 12-month period.
Fortescue retains the option to undertake an on-market share buy-back. During FY24, Fortescue acquired none of its own
shares on market under the share buy-back program.
FY13
FY14
FY15
FY16
FY17
FY18
FY20
FY22
FY19
FY24
FY23
Dividend, A$/share - paid
Dividend, A$/share - declared
Payout ratio - Underlying NPAT
FY21
Dividends declared and payout ratios
Payout ratio
A$/share
FY12
0.08
0.15
0.45
0.23
0.20
21%
17%
16%
21%
36%
52%
62%
77%
75%
0.10
1.14
1.76
80%
78%
38%
0.07
FY11
1.75
0.89
1.08
65%
2.07
3.58
0.05
70%
Dividends and shareholder returns
In September 2023, Fortescue paid a fully franked final dividend of 100 Australian cents per share for the financial year ended
30 June 2023.
On 22 February 2024, Fortescue declared a fully franked interim dividend of 108 Australian cents per share, paid in March 2024.
For the year ended 30 June 2024, Fortescue generated underlying earnings of 185 US cents per share (FY23: 180 US cents per
share). On 28 August 2024, the directors declared a fully franked final dividend of 89 Australian cents per share for the year
ended 30 June 2024 representing a payout ratio of 70 per cent of net profit after tax, in line with the Company’s dividend policy
of maintaining a payout ratio of between 50 and 80 per cent.
Ore Reserves and Mineral Resources
FORTESCUE FY24 ANNUAL REPORT | 44
ORE RESERVES
AND MINERAL
RESOURCES
Overview
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Mineral Resources
FORTESCUE FY24 ANNUAL REPORT | 45
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FORTESCUE FY24 ANNUAL REPORT | 45
ORE RESERVES AND
MINERAL RESOURCES
Hematite Ore Reserves total 1.70 billion tonnes (bt) of dry
product at an average iron (Fe) grade of 57.4%. Combined
Hematite Mineral Resources total 13.27bt (dry in-situ) at an
average Fe grade of 56.8%.
Magnetite Ore Reserves total 832 dry in-situ million tonnes
(Mt) at an average mass recovery of 29.9 per cent for a 67.3%
Fe grade product. Magnetite Mineral Resources total 6.2bt
(dry in-situ) at an average mass recovery of 23.1 per cent.
Operating property Ore Reserves and Mineral Resources
have 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 ASX release dated 26 August 2022.
Reporting is grouped by operating and development properties and
includes both hematite and magnetite deposits.
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). Audits of the Ore
Reserve process are managed by Fortescue’s internal
audit service provider with external technical subject
experts. Independent auditing of a sub-set of Ore
Reserve and Mineral Resource estimates is conducted
on an approximately annual basis by external technical
consultants.
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 and Mineral Resources
FORTESCUE FY24 ANNUAL REPORT | 46
Ore Reserves Operating
Properties – Hematite
The combined Chichester Hub and Western Hub Hematite
Ore Reserves for 2024 are estimated to total 1,701Mt at an
average Fe grade of 57.4%.
The Ore Reserve is quoted as of 30 June 2024 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 increased to 1,102Mt (from 994Mt in 2023)
after accounting for the production depletion and ongoing
in-fill drilling.
Fortescue is advancing studies on various potential
brownfield near-mine and greenfield development
opportunities within its portfolio, including the Mindy South
and Nyidinghu projects. The company is committed to
maintaining portfolio flexibility, ensuring that these deposits
can be incorporated into the Ore Reserves once assessed to
the appropriate level of study.
The Chichester Hub (Cloudbreak and Christmas Creek
deposits) contains 830Mt at an average Fe grade of 57.3%,
a net decrease of 155Mt primarily due to depletion and
reclassification of localised Indicated Resources to Inferred
at Christmas Creek. Proved Ore Reserve constitutes
74.0 per cent of the Chichester Ore Reserve, an increase
of 16 per cent compared to the previous Ore Reserves as
reported in 2023. 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 for the Western Hub (Firetail, Kings and
Queens, Eliwana and Flying Fish deposits) is estimated to
be 871mt at an average Fe grade of 57.4%. The contribution
(tonnes and grades) of the Western Hub alone has
reduced by 10mt, after accounting for depletion and any
increase in Mineral Resource tonnes, along with pit design
modifications and exclusion of areas containing sites of
heritage significance. Proved Ore Reserves comprise 56 per
cent of the tonnage in the total Western Hub Ore Reserve,
which is an increase of eight per cent as compared to 2023
Ore Reserves.
The 2024 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), pit
redesigns and tenement boundaries
• Revision of ore loss and dilution factors based on Life of
Mine (LOM) historical 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 resulting in
improvement to the economic viability of extracting ore
• A revised 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.
Overview
Ore Reserves and
Mineral Resources
FORTESCUE FY24 ANNUAL REPORT | 47
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Ore Reserves Operating Properties – Hematite
30 JUNE 2024
30 JUNE 2023
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
280
57.5
5.23
2.79
0.058
8.1
270
57.6
5.12
2.82
0.056
8.1
Probable
51
56.5
6.47
3.16
0.056
8.3
91
56.6
5.57
3.12
0.056
8.4
Total
331
57.4
5.42
2.85
0.058
8.1
361
57.3
5.23
2.89
0.056
8.2
Christmas Creek
Proved
334
57.2
5.61
2.82
0.051
8.0
297
57.2
5.96
2.63
0.052
7.9
Probable
165
57.6
5.82
2.75
0.052
5.6
327
57.2
6.05
2.91
0.054
7.7
Total
499
57.3
5.68
2.80
0.051
7.2
624
57.2
6.01
2.78
0.053
7.8
Sub-total Chichester Hub
Proved
614
57.3
5.43
2.81
0.054
8.1
568
57.4
5.55
2.72
0.054
8.0
Probable
216
57.4
5.97
2.84
0.053
6.2
418
57.0
5.95
2.96
0.055
7.9
Total
830
57.3
5.58
2.82
0.054
7.6
985
57.2
5.72
2.82
0.054
7.9
Firetail
Proved
16
58.9
6.35
2.19
0.123
6.6
16
59.3
5.61
2.20
0.127
6.9
Probable
30
58.1
7.05
2.54
0.113
6.6
35
58.5
6.37
2.60
0.116
7.1
Total
46
58.3
6.83
2.43
0.116
6.6
51
58.7
6.13
2.47
0.119
7.0
Kings and Queens
Proved
316
56.8
6.87
2.83
0.073
8.7
233
56.7
6.80
2.95
0.080
8.9
Probable
331
56.8
6.61
2.72
0.079
9.2
383
56.8
6.90
2.91
0.082
8.8
Total
647
56.8
6.74
2.77
0.076
8.9
616
56.7
6.86
2.93
0.081
8.8
Eliwana and Flying Fish
Proved
156
59.5
4.87
2.68
0.112
6.5
177
59.4
5.01
2.72
0.115
6.6
Probable
22
59.0
4.96
2.54
0.072
7.1
36
59.3
4.71
2.62
0.069
6.9
Total
178
59.4
4.88
2.66
0.107
6.6
213
59.4
4.96
2.70
0.107
6.6
Sub-total Western Hub
Proved
488
57.7
6.22
2.76
0.087
7.9
426
57.9
6.02
2.83
0.096
7.9
Probable
383
57.0
6.55
2.69
0.081
8.9
455
54.2
5.59
2.60
0.096
7.4
Total
871
57.4
6.36
2.73
0.085
8.4
881
57.5
6.36
2.84
0.090
8.2
Total Ore Reserves Operating Properties – Hematite
Proved
1,102
57.5
5.78
2.79
0.069
8.0
994
57.6
5.74
2.77
0.072
7.9
Probable
599
57.1
6.34
2.75
0.071
7.9
872
57.1
6.33
2.91
0.070
8.2
Total
1,701
57.4
5.98
2.77
0.070
8.0
1,866
57.4
6.02
2.83
0.071
8.1
Notes in reference to table
• Diluted mining models are validated by reconciliation against historical production
• Ore Reserves are inclusive of ore stockpiles at the mines which total approximately 54Mt on dry product basis
• The Chichester Ore Reserve is inclusive of the Cloudbreak, Christmas Creek and Kutayi deposits
• The Western Hub Ore Reserve is inclusive of the Firetail, Kings and Queens, 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.
Ore Reserves Operating
Properties – Magnetite
The 2024 Ore Reserves for Magnetite are from the Iron
Bridge project. Ore Reserves for the project total 832Mt at
an average mass recovery of 29.9% for a 67.3% Fe grade
product. The Ore Reserves are quoted as of 30 June 2024,
on a dry in-situ tonnes basis prior to processing.
The Ore Reserves estimate was developed in May and
June 2024 by the Iron Bridge technical team based on the
2023 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 activities 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 the population of PLNB. Primary environmental
approvals for the Glacier Valley resource are in progress and
currently with state and Federal 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 are applied
to ore inventory in the North Star mining pit within 100m of
the 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 only initial sales and
production have occurred for Magnetite as of 30 June 2024.
Ore Reserves have been adjusted for any depletion in the
prior 12-month period.
Ore Reserves Operating Properties – Magnetite
JUNE 2024
JUNE 2023
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
626
30
190
67.1
5.6
0.3
640
30
194
67.1
5.6
0.3
Total
626
30
190
67.1
5.6
0.3
640
30
194
67.1
5.6
0.3
Glacier Valley
Proved
-
-
-
-
-
-
-
-
-
-
-
-
Probable
206
28
59
68.0
4.5
0.2
203
29
58
68.0
4.5
0.2
Total
206
28
59
68.0
4.5
0.2
203
29
58
68.0
4.5
0.2
Total Ore Reserves Operating Properties – Magnetite
Proved
-
-
-
-
-
-
-
-
-
-
-
-
Probable
832
30
248
67.3
5.4
0.3
843
30
252
67.3
5.4
0.3
Total
832
30
248
67.3
5.4
0.3
843
30
252
67.3
5.4
0.3
Notes in reference to table
• All current magnetite Ore Reserves fall within the Iron Bridge Joint Venture (IBJV). As per the Iron Bridge project agreements, Fortescue owns 69% of the
reported Total Magnetite Ore Reserve estimates within the IBJV
• 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.
Ore Reserves and Mineral Resources
FORTESCUE FY24 ANNUAL REPORT | 48
Mineral Resources Operating
Properties – Hematite
Mineral Resources for the operating properties, which
comprise the Chichester and Western Hubs, are stated on a
dry in-situ tonnage basis. The Mineral Resources, including
stockpiles, are quoted inclusive of Ore Reserves.
As at 30 June 2024, the total Mineral Resource for the
Chichester and Western Hubs, is estimated to be 4,731Mt
at an average Fe grade of 56.3%, a decrease of 360mt over
that stated in the prior year, with 69 per cent of the reported
tonnage in the Measured and Indicated Mineral Resource
categories.
The total Chichester Hub (Christmas Creek and Cloudbreak
deposits) Mineral Resource is estimated to be 1,955Mt
at an average Fe grade of 56.7%, with 81 per cent of the
tonnage in the Measured and Indicated Mineral Resource
categories. Model updates at Christmas Creek have resulted
in downgrading the classification of some localised areas
to better reflect the confidence in the estimate. Additional
exclusions, of mostly Inferred material, have been applied
at both Christmas Creek and Cloudbreak due to dewatering
constraints in the southern, deeper parts of the orebody.
These exclusions align with Ore Reserves.
The total Western Hub (Firetail, Kings and Queens, Eliwana
and Flying Fish deposits) Mineral Resource is estimated
to be 2,777Mt at an average Fe grade of 56.1%, with 60 per
cent 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 2024
30 JUNE 2023
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
517
56.9
5.63
3.31
0.059
8.28
478
57.0
5.71
3.25
0.057
8.17
Indicated
138
56.0
6.56
3.55
0.058
8.35
191
56.0
6.34
3.52
0.057
8.23
Inferred
35
55.8
6.67
3.72
0.058
8.31
83
55.7
5.84
3.80
0.069
9.07
Total
690
56.6
5.87
3.38
0.059
8.30
751
56.6
5.88
3.38
0.059
8.29
Christmas Creek
Measured
571
56.8
6.24
3.18
0.049
8.07
502
56.7
6.37
3.20
0.051
7.96
Indicated
358
56.7
6.53
3.26
0.050
7.87
620
56.2
6.58
3.62
0.052
7.88
Inferred
336
56.5
6.45
3.37
0.055
7.83
360
55.7
6.75
3.79
0.055
7.86
Total
1,265
56.7
6.37
3.26
0.051
7.95
1,482
56.2
6.55
3.52
0.052
7.90
Sub-total Chichester Hub
Measured
1,088
56.8
5.95
3.24
0.054
8.17
980
56.8
6.05
3.23
0.054
8.06
Indicated
495
56.5
6.54
3.34
0.052
8.00
810
56.1
6.52
3.60
0.053
7.96
Inferred
371
56.4
6.47
3.41
0.055
7.87
443
55.7
6.58
3.79
0.058
8.09
Total
1,955
56.7
6.20
3.30
0.054
8.07
2,233
56.3
6.33
3.47
0.054
8.03
Firetail
Measured
29
57.9
6.88
2.71
0.122
7.04
30
58.2
6.48
2.66
0.123
6.96
Indicated
78
56.5
8.32
3.03
0.126
7.06
92
56.8
8.01
3.01
0.125
7.05
Inferred
53
54.7
8.08
4.72
0.105
8.14
56
55.1
8.27
4.24
0.109
7.87
Total
160
56.2
7.98
3.52
0.118
7.41
178
56.5
7.84
3.34
0.119
7.29
Kings and Queens
Measured
545
55.4
8.10
3.41
0.078
8.66
424
55.2
8.00
3.40
0.080
8.96
Indicated
681
55.1
8.34
3.36
0.084
8.88
765
55.3
8.21
3.33
0.083
8.80
Inferred
491
55.0
8.51
3.80
0.077
8.31
591
54.9
8.67
3.82
0.076
8.24
Total
1,717
55.1
8.31
3.50
0.080
8.65
1,780
55.1
8.31
3.51
0.080
8.65
Overview
Ore Reserves and
Mineral Resources
FORTESCUE FY24 ANNUAL REPORT | 49
Operating and
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Mineral Resources Operating Properties – Hematite – continued
30 JUNE 2024
30 JUNE 2023
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
%
Eliwana
Measured
199
58.9
5.51
2.80
0.123
6.47
227
58.9
5.55
2.80
0.122
6.45
Indicated
35
57.3
6.87
3.04
0.096
7.11
40
57.2
7.00
3.16
0.093
6.91
Inferred
469
57.5
6.42
3.59
0.101
6.97
470
57.5
6.42
3.58
0.101
6.97
Total
703
57.9
6.18
3.34
0.107
6.84
736
57.9
6.18
3.32
0.107
6.81
Flying Fish
Measured
73
58.4
5.09
3.17
0.058
7.35
52
58.3
5.31
2.98
0.058
7.54
Indicated
29
60.3
4.55
2.10
0.061
6.40
43
59.5
4.80
2.62
0.060
6.71
Inferred
95
57.7
6.09
3.04
0.054
7.07
69
57.0
6.52
3.25
0.053
7.46
Total
197
58.4
5.49
2.95
0.056
7.07
163
58.1
5.68
3.00
0.056
7.29
Sub-total Western Hub
Measured
845
56.6
7.19
3.22
0.088
7.98
732
56.7
6.99
3.15
0.093
8.00
Indicated
824
55.5
8.14
3.27
0.088
8.54
940
55.7
7.98
3.26
0.086
8.45
Inferred
1,107
56.3
7.40
3.69
0.086
7.63
1,186
56.1
7.63
3.71
0.086
7.67
Total
2,777
56.1
7.55
3.42
0.087
8.01
2,858
56.1
7.58
3.42
0.088
8.01
Total Mineral Resources Operating Properties – Hematite
Measured
1,934
56.7
6.49
3.23
0.069
8.08
1,712
56.8
6.45
3.20
0.071
8.03
Indicated
1,319
55.9
7.54
3.30
0.074
8.34
1,750
55.9
7.31
3.42
0.071
8.23
Inferred
1,479
56.3
7.16
3.62
0.079
7.69
1,629
56.0
7.35
3.73
0.078
7.79
Total
4,731
56.3
6.99
3.37
0.073
8.03
5,091
56.2
7.03
3.44
0.073
8.02
Notes in reference to table
• Chichester Hub Mineral Resources are quoted above a cut-off of 53.5% Fe, Western Hub Mineral Resources are quoted above a cut-off grade of 51.5% Fe
• The Christmas Creek Mineral Resource is inclusive of the Kutayi deposit
• The Measured Mineral Resource estimate includes mine stockpiles totalling approximately 64Mt
• As part of Fortescue’s ongoing review process, areas of heritage significance (where appropriate) have been excluded from the Mineral Resource
• 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.
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. An updated estimate for the White
Knight deposit in the Greater Chichester Hub has resulted
in an increase of 111Mt. An updated estimate for the Serenity
deposit has resulted in downgrading the classification in
some areas to better reflect the confidence in the estimate;
overall this update has resulted in an increase of 28Mt in the
Greater Solomon Hub. Updated estimates at the Wyloo North,
Lora and Flying Fish South deposits, and the exclusion of the
Vivash deposit due to heritage significance in the Greater
Western Hub, has resulted in a decrease of 88Mt. An updated
estimate for the Nyidinghu deposit in the Nyidinghu Hub has
resulted in an increase of 92Mt. Updated estimates at the
Mindy South and Earendil deposits in the Pilbara Other Hub
have resulted in an increase of 109Mt. Areas identified as
containing sites of heritage significance have been excluded
from reporting at deposits across all hubs. This update is
an overall increase of 253Mt 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 2024, the total Mineral Resource for
development properties, which excludes and is additional
to the operating properties, is estimated to be 8,534Mt at
an average Fe grade of 57.0%. This comprises 673Mt for
the Greater Chichester deposits, 2,079Mt for the Greater
Solomon deposits, 1,881Mt for the Greater Western deposits,
2,306Mt for the Nyidinghu deposit and 1,595Mt for the
Pilbara Other deposits.
Ore Reserves and Mineral Resources
FORTESCUE FY24 ANNUAL REPORT | 50
Mineral Resources Development Properties – Hematite
30 JUNE 2024
30 JUNE 2023
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
673
55.8
7.48
3.69
0.060
7.4
562
56.0
7.42
3.70
0.061
7.2
Total
673
55.8
7.48
3.69
0.060
7.4
562
56.0
7.42
3.70
0.061
7.2
Greater Solomon
Measured
-
-
-
-
-
-
-
-
-
-
-
-
Indicated
131
56.2
6.19
2.67
0.092
10.2
254
56.6
6.70
3.45
0.083
8.3
Inferred
1,948
56.7
7.17
3.82
0.085
7.0
1,796
56.8
6.89
3.73
0.082
7.3
Total
2,079
56.7
7.11
3.75
0.086
7.3
2,051
56.8
6.87
3.69
0.082
7.4
Greater Western
Measured
-
-
-
-
-
-
-
-
-
-
-
-
Indicated
99
59.1
5.33
2.45
0.162
7.1
99
59.1
5.33
2.45
0.162
7.1
Inferred
1,782
56.6
6.18
3.00
0.081
9.1
1,870
56.8
6.12
2.98
0.082
9.0
Total
1,881
56.7
6.14
2.97
0.085
9.0
1,969
56.9
6.08
2.95
0.086
8.9
Nyidinghu
Measured
22
59.7
3.54
2.08
0.140
8.1
22
59.7
3.49
2.08
0.141
8.1
Indicated
1,008
57.9
4.58
3.08
0.149
8.6
963
57.9
4.56
3.09
0.150
8.6
Inferred
1,276
57.0
5.14
3.44
0.144
8.9
1,228
57.2
5.03
3.39
0.148
8.8
Total
2,306
57.4
4.88
3.27
0.146
8.8
2,214
57.5
4.81
3.25
0.148
8.7
Pilbara Other
Measured
-
-
-
-
-
-
-
-
-
-
-
-
Indicated
-
-
-
-
-
-
-
-
-
-
-
-
Inferred
1,595
57.6
6.46
2.69
0.107
7.8
1,486
57.6
6.34
2.65
0.106
7.9
Total
1,595
57.6
6.46
2.69
0.107
7.8
1,486
57.6
6.34
2.65
0.106
7.9
Total Mineral Resources Development Properties – Hematite
Measured
22
59.7
3.54
2.08
0.140
8.1
22
59.7
3.49
2.08
0.141
8.1
Indicated
1,238
57.8
4.81
2.99
0.144
8.7
1,317
57.7
5.03
3.11
0.138
8.5
Inferred
7,274
56.8
6.44
3.29
0.097
8.1
6,942
57.0
6.28
3.23
0.097
8.1
Total
8,534
57.0
6.20
3.25
0.104
8.2
8,281
57.1
6.07
3.21
0.104
8.2
Notes in reference to table
• The Greater Chichester Mineral Resources includes the Investigator, White Knight and Mount Lewin deposits
• The Greater Solomon Mineral Resource includes the Serenity, Queens East West (previously Sheila Valley), Mount MacLeod, Cerberus, Stingray and
Raven deposits
• The Greater Western Mineral Resources includes the Flying Fish South, Cobra, Lora, Zorb, Farquhar, Elevation, Boolgeeda CID and Wyloo North
deposits
• The Pilbara Other Mineral Resources 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.
Overview
Ore Reserves and
Mineral Resources
FORTESCUE FY24 ANNUAL REPORT | 51
Operating and
financial review
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Mineral Resources Operating
Properties – Magnetite
The resource model for the North Star, Eastern Limb, West
Star and Glacier Valley deposits (69 per cent Fortescue) was
completed in 2022, with the South Star area modelled in
2023, all of which remain largely unchanged. 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. The pit shell used to constrain
the June 2024 magnetite Mineral Resource was updated
using detailed information on mining, geotechnical and
metallurgical processing parameters, along with the latest
cost assumptions, aligned with the proposed operations
strategy. Where appropriate, heritage sites have been
excluded from the Mineral Resource using engineered
shapes to account for the pit slope.
As of 30 June 2024, the total magnetite Mineral Resource
is estimated to be 6,198Mt (from 6,475Mt in 2023) at an
average mass recovery of 23.1 per cent, reported above a 9
per cent mass recovery cut-off. The decrease is a function
of the updated pit shell used to constrain the magnetite
Mineral Resource, along with updated heritage exclusions in
the Glacier Valley and South Star areas.
Ore Reserves and Mineral Resources
FORTESCUE FY24 ANNUAL REPORT | 52
Mineral Resources Operating Properties – Magnetite
30 JUNE 2024
30 JUNE 2023
In-situ
tonnes
(Mt)
Fortescue
proportion
%
Fortescue
attributable
tonnes (Mt)
DTR mass
recovery
%
In-situ
Iron Fe
%
In-situ Silica
SiO2
%
In-situ Alumina
Al2O3
%
In-situ
tonnes
(Mt)
Fortescue
proportion
%
Fortescue
attributable
tonnes (Mt)
DTR mass
recovery
%
In-situ Iron
Fe
%
In-situ Silica
SiO2
%
In-situ Alumina
Al2O3
%
North Star and Eastern Limb (M45/1226)
Measured
232
69%
160
26.2
31.1
41.3
2.77
256
69%
176
25.7
31.2
41.4
2.82
Indicated
770
69%
531
24.7
30.2
41.3
2.69
780
69%
538
24.6
30.2
41.3
2.70
Inferred
2,280
69%
1,573
24.1
29.9
41.7
2.84
2,274
69%
1,569
23.8
29.8
41.7
2.85
Total
3,282
69%
2,265
24.4
30.0
41.6
2.80
3,310
69%
2,284
24.2
30.0
41.6
2.81
Glacier Valley (M45/1244 & M45/1226)
Measured
55
69%
38
25.4
35.1
39.2
1.58
55
69%
38
25.4
35.1
39.2
1.58
Indicated
279
69%
193
23.8
33.2
39.1
1.70
284
69%
196
23.7
33.1
39.1
1.71
Inferred
875
69%
604
19.9
31.6
40.0
2.12
1,020
69%
704
19.4
31.5
40.0
2.16
Total
1,209
69%
834
21.1
32.1
39.8
1.99
1,359
69%
938
20.5
32.0
39.8
2.04
West Star (M45/1226)
Measured
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Indicated
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Inferred
615
69%
425
20.3
28.0
43.9
3.40
602
69%
416
20.3
28.0
43.9
3.41
Total
615
69%
425
20.3
28.0
43.9
3.40
602
69%
416
20.3
28.0
43.9
3.41
South Star (E45/3084)
Measured
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Indicated
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Inferred
393
69%
271
24.3
31.4
41.4
0.67
398
69%
275
24.3
31.4
41.4
0.67
Total
393
69%
271
24.3
31.4
41.4
0.67
398
69%
275
24.3
31.4
41.4
0.67
South Star (E45/4025)
Measured
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Indicated
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Inferred
698
100%
698
22.1
32.0
40.4
0.91
806
100%
806
21.5
32.0
40.4
0.91
Total
698
100%
698
22.1
32.0
40.4
0.91
806
100%
806
21.5
32.0
40.4
0.91
Total Mineral Resources Operating Properties – Magnetite
Measured
287
-
198
26.0
31.8
40.9
2.55
311
-
214
25.6
31.9
41.0
2.60
Indicated
1,049
-
724
24.5
31.0
40.7
2.43
1,065
-
735
24.4
31.0
40.8
2.43
Inferred
4,862
-
3,571
22.6
30.4
41.4
2.33
5,100
-
3,769
22.2
30.4
41.4
2.30
Total
6,198
-
4,493
23.1
30.5
41.3
2.35
6,475
-
4,718
22.7
30.6
41.3
2.34
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 6% 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
• Measured Mineral Resource estimate includes mine stockpiles totalling approximately 7Mt
• 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.
Overview
Ore Reserves and
Mineral Resources
FORTESCUE FY24 ANNUAL REPORT | 53
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Competent Persons Statement
The detail in this report that relates to Hematite Mineral
Resources is based on information compiled by Nicholas
Nitschke, Doug Kepert, Erin Retz, Stuart Badock, Suzanne
Caron and 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
John Graindorge, a full-time employee and shareholder
of Fortescue. Mr Graindorge provided technical input for
Mineral Resource estimations.
Estimated Ore Reserves for the Chichester and Western
Hub deposit for fiscal year 2024 were compiled by Thomas
Keller, Terry Chong and Michael Fisher,
full-time employees and shareholders of Fortescue.
Estimated Magnetite Ore Reserves for the Iron Bridge
project for fiscal year 2024 were compiled by Sunarno
Purnomo and Mudit Tandon, full-time employees and
shareholders of Fortescue.
Mr Nitschke, Ms Retz, Mr Badock, Ms Caron, Mr Keller,
Mr Chong, Mr Fisher, Mr Purnomo, Mr Tandon and Mr
Graindorge are Members of the Australasian Institute
of Mining and Metallurgy. Mr Kepert is a Member of the
Australian Institute of Geoscientists. Mr Graindorge is also a
Chartered Professional (Geology).
Mr Nitschke, Mr Kepert, Ms Retz, Mr Badock, Ms Caron, Mr
Keller, Mr Chong, Mr Fisher, Mr Purnomo, 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 Nitschke, Mr Kepert, Ms Retz, Mr Badock, Ms Caron, Mr
Keller, Mr Chong, Mr Fisher, Mr Purnomo, 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.
Ore Reserves and Mineral Resources
FORTESCUE FY24 ANNUAL REPORT | 54
Overview
Operating and
financial review
Ore Reserves and
Mineral Resources
FORTESCUE FY24 ANNUAL REPORT | 55
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CORPORATE
GOVERNANCE
Holmaneset Project
in Norway.
Project subject to FID,
artist impression only
corporate governance
FORTESCUE FY24 ANNUAL REPORT | 56
OVERVIEW
OF GOVERNANCE
Good governance is the collective responsibility of the
Board of directors (the Board) and across all levels of
management. Fortescue Ltd (Fortescue) seeks to adopt
leading practice and contemporary governance standards
and apply these in a manner consistent with our culture and
Values (our Values can be viewed on our website
fortescue.com).
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.
Good corporate governance is critical to the long-term,
sustainable success of Fortescue.
Overview
Operating and
financial review
Ore Reserves and
Mineral Resources
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Audit, Risk Management
and Sustainability Committee¹
Remuneration and
People Committee¹
EMPLOYEES
COMMUNITY
GOVERNMENT
AND
REGULATORS
STAKEHOLDERS
BUSINESS
PARTNERS AND
INVESTORS
SHAREHOLDERS
Nomination
Committee¹
Finance
Committee¹
INTEGRATED RISK MANAGEMENT
DELEGATIONS OF AUTHORITY
CHIEF EXECUTIVE OFFICERS
POLICIES AND
PROCEDURES
INDEPENDENT
ASSURANCE ACTIVITY
CORPORATE CULTURE AND VALUES
MANAGEMENT RESPONSIBILITY
EXECUTIVE AND MANAGEMENT
SHAREHOLDERS
BOARD
GOVERNANCE FRAMEWORK
1 Effective 1 July 2024, Fortescue implemented a new Committee structure. The new Committees are:
(a) Audit, Finance and Risk Management Committee
(b) People, Remuneration and Nomination Committee
(c) Safety and Sustainability Committee
OUR APPROACH
TO SUSTAINABILITY
Our approach to sustainability
FORTESCUE FY24 ANNUAL REPORT | 58
Safety and
wellbeing
Diversity, inclusion
and equity
Talent and skills
Culture and First
Nations Peoples
Community
PEOPLE
PLANET
Climate and
decarbonisation
Water
Biodiversity
PROCESS
Business strategy
and integrity
Procurement and
marketing
Security practices
PRODUCT
Innovation
Energy and
resources
Circularity
Mine planning
Product
stewardship
HUMAN RIGHTS
Governance, stakeholder engagement, continual improvement
Financial materiality
Impact materiality
Fortescue's material topics
FORTESCUE FY24 ANNUAL REPORT | 59
Our approach
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Corporate
governance
Sustainability is critical to the future success of our company and
we integrate it into all aspects of our business
As Fortescue transitions to an integrated green
technology, metals and energy company, our
commitment to sustainability will grow with us.
Our sustainability ambition is focused on ensuring
that both society and the environment benefit from
our business as we take a global leadership role in
addressing climate change and supporting the transition
to green energy. This overarching ambition drives our
stretch targets and our sustainability performance.
Sustainability is integrated into our decision-making
and our 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 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.
Good governance is critical to strong sustainability
performance and is the collective responsibility of our
Board and all levels of management. Fortescue seeks to
adopt leading practice and contemporary governance
standards and apply these in a manner consistent with
our unique culture and Values.
Sustainability Governance
Our Board is responsible for the oversight of all
sustainability matters, which prior to 1 July 2024 received
regular updates through the ARMSC1.
Operationally, sustainability is directed by our Chief
Executive Officers and Chief Operating Officer with
support from our executive Sustainability Committee.
The executive Sustainability Committee meets at
least quarterly to define our sustainability framework
and oversee implementation across the business
and continuous improvement. In FY24, the executive
Sustainability Committee facilitated executive
endorsement of all key outcomes endorsed or approved
by the ARMSC.
Our sustainability strategy outlines commitments and
targets and provides implementation guidance. The early
identification and assessment of sustainability risks and
opportunities helps to shape the way we do business at
Fortescue.
Our dedicated Sustainability team, managed by our
Director Sustainability and External Affairs, coordinates
the implementation of our sustainability strategy, related
policies and targets across the business.
Sustainability materiality
Sustainability materiality is evolving beyond
consideration of the impacts and dependencies of a
business. It also considers the corresponding financial
risks, opportunities and impacts to the business
resulting from climate change, global environmental
concerns, human rights violations and shifting societal
expectations.
To reflect the evolution of sustainability reporting
requirements, as well as our own business transition
to an integrated green technology, energy and metals
company, this year Fortescue has performed our
first sustainability double materiality assessment.
The assessment forms the basis for refreshing our
sustainability strategy and material topics. With this
approach, we continue to consider the outward social
and environmental impacts associated with our business
activities, as well as the inward sustainability-related risks
and opportunities to our financial performance.
The FY24 sustainability materiality process considered
both finance and impact materiality by aligning to the key
sustainability standards applicable to Fortescue.
¹ Effective 1 July 2024, Sustainability forms part of a new Board Committee, the Safety and Sustainability Committee.
Our approach to sustainability
FORTESCUE FY24 ANNUAL REPORT | 60
MEASURING OUR
PERFORMANCE
AMBITION
TARGET
PERFORMANCE
RESULT
Safety and wellbeing
To be a global leader in safety
Achieve zero
fatalities
Reduce Fortescue
Metal's injury profile by
15 per cent year on year
Maintain or improve Fortescue
Metal’s TRIFR year on year
TRIFR not exceeding 4.0
for Fortescue Energy
Fatalities
Injury profile reduction
(Fortescue Metals)
TRIFR (Fortescue Metals)
TRIFR (Fortescue Energy)
FY24 0
FY24 25%
FY24 1.3
FY24 0.5
FY23 0
FY23 22%
FY23 1.8
FY23 0.0
FY22 1
FY22 21%
FY22 1.8
FY22 0.7
PEOPLE
Diversity, inclusion and equity continued
To increase the number of First Nations Australian employees to be reflective of general society, and to provide
opportunities for First Nations Australian people to move into leadership positions.
Year-on-year
increase in our First
Nations Australian
employment rate
Year-on-year increase
in our First Nations
Australian employment
rate in our Pilbara
operations
Year-on-year increase in
our First Nations Australian
employment rate in leadership
roles
First Nations
Australian
employment in
Australian workforce
First Nations Australian
employment in Pilbara
operations
First Nations Australian
leadership roles
FY24 11%
FY24 15%
FY24 5%
FY23 10%
FY23 16%
FY23 4%
FY22 10%
FY22 15%
FY22 4%
Diversity, inclusion and equity
To increase gender diversity to reflect 40:40:20 across Fortescue. This refers to a minimum of 40 per cent men and
40 per cent women, with the remaining 20 per cent represented by any gender. To provide opportunities for female
employees to move into leadership positions.
Year-on-year
increase in our
female employment
Year-on-year increase in
our female employment
in leadership roles
Year-on-year increase in our
female employment in senior
leadership roles
Female employment
Females in leadership
(manager and above)
Females in senior leadership
(group manager and above)
FY24 24%
FY24 29%
FY24 37%
FY23 23%
FY23 26%
FY23 30%
FY22 23%
FY22 24%
FY22 27%
FORTESCUE FY24 ANNUAL REPORT | 61
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directory
Corporate
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Culture and First Nations peoples
To work together with Indigenous people to
manage First Nations rights responsibly and
sustainably. To create economic opportunities
for First Nations businesses through local
procurement, business development, mentoring
and capacity-building opportunities.
Ensure no impact
to First Nations
heritage without
consultation with
and consent from
First Nations
peoples
Year-on-year
improvement, working
towards our ambition
to achieve an annual
Australian spend of
10 per cent with First
Nations Australian-
owned businesses
Significant heritage
incidents
Spend with First Nation
Australian businesses
FY24 0
FY24 7%
FY23 0
FY23 5%
FY22 0
FY22 5%
Communities
To achieve a sustained social license to operate
wherever we are present while ensuring the
wellbeing of our host communities, and deliver
value to our communities through strategic social
investment. We are committed to upholding our
Values, fulfilling our commitments, and meeting
best practice social performance standards.
Allocate funding
according to
priorities set in
the community
investment strategy
Social investment
FY24 $86.7 million
FY23 $101.8 million
FY22 $77.4 million
Talent and skills
To be an industry leader in the development of our
people, nurturing internal talent and strengthening
our leadership capability through targeted
development interventions.
All team members
participate in mid-
year and year-end
performance and
development reviews
Employees participating
in development reviews
FY24 100%
FY23 100%
FY22 100%
Our approach to sustainability
FORTESCUE FY24 ANNUAL REPORT | 62
PLANET
Climate and decarbonisation
Fortescue is an integrated green technology, metals and energy company. We take an industry-leading position on
reducing emissions by working to decarbonise our operations and delivering renewable energy and products to the
world. We will show industry it is possible to decarbonise profitably.
Real Zero Scope 1 and
2 emissions across our
terrestrial Australian iron
ore operations by 2030
Enable a reduction in
emissions intensity
from steelmaking by
Fortescue’s customers
of 7.5 per cent, from
FY21 levels by 2030
Enable a reduction in emissions
intensity levels from the
shipping of our iron ore by 50
per cent, from FY21 levels by
2030
Total Scope 1 and
2 emissions from
Australian terrestrial iron
ore operations
(million tonnes CO2-e)
Emissions intensity from
steelmaking
(tCO2-e/t of iron ore)
Emissions intensity from
shipping (tCO2-e/t of iron ore)
FY24 2.38
FY24 1.37
FY24 0.019
FY23 2.28
FY23 1.36
FY23 0.016
FY22 2.23
FY22 1.33
FY22 0.017
Biodiversity
To be a leader in safeguarding the environment and take accountability for our actions.
Achieve zero significant
environmental incidents
Develop a clear pathway
to net positive impact on
biodiversity by 2030
Significant
environmental incidents
FY24 progress
FY24 0
FY23 0
FY22 0
Metals Biodiversity Strategy released
Ongoing implementation of our environmental management system
$6.0m invested in research and conservation programs
MEASURING OUR
PERFORMANCE
CONTINUED
AMBITION
TARGET
PERFORMANCE
RESULT
FORTESCUE FY24 ANNUAL REPORT | 63
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Corporate
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Water
To effectively steward water resources and apply responsible water management throughout our areas of operation
and across all current and future project stages. To continually improve water use efficiency and minimise water loss
through surface water discharge and evaporation.
Annually, ensure at
least 80 per cent of
water abstracted at
the Chichester Hub is
used for operational
requirements or
beneficial environmental
purposes
Pilot the Minerals
Council of Australia
Water Accounting
Framework at Eliwana
in FY24, in line with
the ICMM Water
Stewardship Framework
Complete a site-wide water
resource efficiency assessment
for Solomon in FY24 to inform
long-term water efficiency
planning
FY24 progress
FY24 progress
FY24 progress
FY24 98%
FY23 96%
FY22 99%
In progress - water data
currently being collected
and reviewed
In progress - preliminary
discussions within the Technical
Services team
Procurement and marketing
To pioneer collaborative sustainable value chain practices that generate long-term value for our shareholders,
customers, suppliers and workers across our supply chain and in the communities in which we operate.
As this is a new material topic for Fortescue, there were no targets in place in FY23 for which performance could be
reported in FY24.
PROCESS
Business strategy
and integrity
To ensure our Values reflect ethical conduct and
respect, and that our Values are embedded in the
business.
Annually, ensure
ethical conduct is
maintained by a
targeted program
Employees
attending advanced
anti-bribery and
corruption training
FY24 639
FY23 766
FY22 863
Security practices
To expand our business globally in line with our
Values, protecting our Fortescue Family as well as
the rights of our community members who may be
impacted by security operations.
To become a full
member of the
Voluntary Principles
Initiative (VPI)
Progress in FY24
Fortescue became a full member of the VPI in
May 2024.
Our approach to sustainability
FORTESCUE FY24 ANNUAL REPORT | 64
MEASURING OUR
PERFORMANCE
CONTINUED
AMBITION
TARGET
PERFORMANCE
RESULT
PRODUCT
Product stewardship
As Fortescue develops products, and the supply
chains mature, our ambition is that each relevant
product offered to the market has a digital
product passport that enables our customers to
understand the emissions impact of a Fortescue
product.
Develop Fortescue LCA guidance to be used by
our global business
Progress in FY24
LCA Guideline and LCA Procedure released
in FY24.
Circularity
To see waste as a resource, driving a circular
approach to material use. Addressing the
generation of waste through prevention, reduction,
recycling and reuse, and minimising our reliance
on virgin material inputs in the manufacturing
processes.
Recycle more than 80 per cent of our waste
(excluding mineral waste, tyres and concrete)
Waste recycled
FY24 81%
FY23 81%
FY22 83%
Innovation
Investment and development in early stage
technologies will enable the achievement of our
decarbonisation ambitions and increase the
efficiency of our existing activities.
There were no targets in place for FY23 against
which performance could be reported in FY24
Energy and resources
To embed optimisation and energy efficiency
in all aspects of our operations to support our
commitment to decarbonisation. By 2030,
approximately 97% of our electricity demand to be
met by renewable resources.
Construction of North Star Junction solar farm in
FY24
Construction completion date
Milestone achieved June 2024
Mine planning
Ensure the closure of our mines and key
infrastructure areas is undertaken in a planned
approach, with appropriate financial provisioning
in place.
Closure plans to be
in place for each
major operational
site
Closure plans in
place
FY24 100%
FY23 100%
FY22 100%
More information is available from Fortescue’s FY24 Sustainability Report, available on our website at fortescue.com.
climate change
report
FORTESCUE FY24 ANNUAL REPORT | 65
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Overview
CLIMATE
CHANGE
REPORT
Fortescue takes an industry-leading position on reducing emissions by
decarbonising our operations and working to deliver low carbon solutions
and green energy products to the world.
Climate change is the greatest challenge facing the global
community. It also presents a once in a lifetime opportunity
for economic growth and value creation.
Climate change has the potential to lead to catastrophic
social and economic outcomes, the costs of which far
exceed those associated with transitioning to a low carbon
world. The Intergovernmental Panel on Climate Change
(IPCC)’s Sixth Assessment Report (AR6) found that without
deep reductions in greenhouse gas emissions over the
coming decades, global warming will exceed 2°C in the 21st
century.
Without immediate action to reduce global emissions, the
impacts of climate change, which are already being felt, will
continue to worsen. Swift action from industry and strong
policy frameworks from governments are required, where
risk taking is incentivised and rewarded and the rights of our
communities are protected.
Strong action to address climate change is embedded
within the Fortescue business and is led by our Executive
Chairman, Dr Andrew Forrest AO, and our Board.
Fortescue has a costed plan to decarbonise our Scope 1
and 2 emissions across our terrestrial Australian iron ore
operations, while developing projects and technology to help
scale green energy and green hydrogen.
We will decarbonise profitably by lowering operating costs,
future proofing our business and creating new revenue
streams. As consumers and customers look to reduce their
own carbon footprint, the demand for green iron ore, green
metal and green steel will increase.
We move beyond our own operations, investing in
technology to reduce emissions globally and share green
fuels and technology with the world.
At our R&D facilities, we are working to decarbonise
industry, including Fortescue’s operations, using battery
power, green hydrogen and green ammonia.
By far the largest source of our Scope 3 emissions is the
steelmaking process. We are investing in the development
of green metal reduction and processing technologies to
demonstrate green metal feasibility, with the ambition to
show that our iron ore is compatible with low-emissions
iron-making processes. We are also pursuing the
opportunity to jointly develop a fully integrated Australia–
China green metal supply chain.
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Our approach
CLIMATE CHANGE
REPORT
climate change
report
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directory
Overview
About this
report
This report has been prepared for Fortescue’s stakeholders and details
our progress in managing climate-related matters, including risks and
opportunities.
It is aligned with the recommendations of the Taskforce on
Climate-related Financial Disclosures (TCFD), which has
guided our climate-related reporting since FY18.
During FY24, the Australian Treasury issued a draft of new
government policy for climate change reporting, as well
as a draft bill proposing changes to legislation to enact
that policy. Under this new regime, the measurement and
disclosure of climate-related financial information will be
guided by Australian Sustainability Reporting Standard
(ASRS) ED-SR1 issued by the Australian Accounting
Standards Board (AASB). Effective from FY26, ASRS ED-SR1
is based on the TCFD recommendations.
While we are still reporting under TCFD, we are preparing
our business for ASRS compliance, and this report contains
some elements of additional disclosures required under
ED-SR1.
This report captures activities within our operations over
which we have operational control.
All references to our, we, us, the Group, the Company and
Fortescue refer to Fortescue Ltd (ABN 57 002 594 872) and
its subsidiaries. All references to a year are to the financial
year ended 30 June 2024 unless otherwise stated.
This report has been approved for release by Fortescue’s
Board of Directors.
Emissions
When we refer to emissions, we refer to all greenhouse gas
emissions, reported in the unit of million tonnes of carbon
dioxide equivalent (mtCO2-e). 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.
Assurance
FY24 greenhouse gas emissions data were subject to
external assurance by KPMG: reasonable assurance for
Group Scope 1, Scope 2 location-based and Scope 2
market-based, and limited assurance for Scope 3.
Feedback
We value all feedback. Please forward any comments
on this report or request for additional information to
sustainability@fortescue.com.
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OUR TARGETS
Fortescue’s roots in iron ore mining mean that since our establishment
in 2003, we have been, by nature, a heavy emitter. We are committed to
changing this and we take this responsibility seriously.
2030
Real Zero
Scope 1 and
2 emissions
Real Zero Scope 1 and 2 emissions
across our Australian terrestrial
iron ore operations.
Scope 3
emissions
intensity
Enable a reduction in
emissions intensity from
steelmaking by Fortescue's
customers of 7.5 per cent
(from FY21 levels).
Enable a reduction in
emissions intensity levels
from the shipping of our iron
ore by 50 per cent
(from FY21 levels).
2040
Net zero
Scope 3
emissions
Our approach to reducing Scope 3
emissions is to develop projects
and technologies with a focus
on reducing emissions from our
whole supply chain, including
iron and steel making as well as
shipping, and to work with current
and prospective customers on the
application of the technology and
the supply of green hydrogen and
ammonia from Fortescue.
OUR
TARGETS
2030
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BY 2030
BY 2030
BY 2030
BY 2040
Target
Real Zero
Scope 1 and 2
Enable a reduction in
emissions intensity from
steelmaking by Fortescue's
customers of 7.5%, from FY21
levels
Enable a reduction in
emissions intensity levels
from the shipping of our iron
ore by 50%, from FY21 levels
Net zero Scope 3
The metric used to set
the target
Scope 1 and 2
emissions in
tCO2-e
Emissions, in tCO2e, from the
processing our of iron ore by
our customers. (classified
under Scope 3 category 10 -
Processing of sold products)
Emissions, in tCO2-e, from
shipping of our iron ore
Scope 3 emissions
in tCO2-e
The objective of the
target
Mitigation
The part of Fortescue to
which the target applies
Australian iron
ore operations
Scope 3 emissions from
processing of Fortescue iron
ore sold products
Scope 3 emissions from
shipping reported in GHG
Protocol categories 4 and 9
GHG Protocol
categories 1 to 10
The period over which
the target applies
2030
2030
2030
2040
The base period from
which progress is
measured
Not applicable FY21
FY21
Not applicable
Whether the target is
an absolute or intensity
target
Absolute
Physical intensity
Physical intensity
Absolute
The international
agreement informing
the target
Paris agreement to limit global warming to 1.5°C
Greenhouse gases
covered by the target
CO2, CH4, N2O, SF6, HFC and PFC
Net or gross emissions
target
Gross
Gross
Gross
Net
Our climate transition pathway
Both our Climate Transition Plan and our annual Climate
Change reports are essential components of our strategy to
address and mitigate climate change.
Our initial Climate Transition Plan, released in October
2023, can be accessed on our website at fortescue.com.
Fortescue will publish its second Climate Transition Plan
in September 2024 in a significant iteration of its existing
communication in alignment with the framework laid down
by the Transition Plan Taskforce.
The revised Climate Transition Plan outlines our
ambition and specific actions we will take to achieve zero
emissions, including detailed pathways, timelines and the
implementation of low-carbon technologies and practices.
It demonstrates our ambition to be a highly profitable green
technology, energy and metals company, with laser focus on
Real Zero.
This Climate Change Report communicates our progress
towards our ambition. It provides data, metrics and
analyses on our greenhouse gas emissions and highlights
achievements, challenges and adjustments made
throughout the reporting period. This report ensures
transparency and accountability by showing stakeholders
the tangible results and advancements in our climate action
efforts.
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OUR STRATEGY
Our climate change strategy focuses on three strategic pillars:
In September 2022, Fortescue committed to eliminating
fossil fuels and achieving a Real Zero outcome across
Scope 1 and 2 emissions from its terrestrial Australian iron
ore operations.
We expect decarbonisation to drive value for our
shareholders. By 2030, decarbonisation will enable
Fortescue to save over 700 million litres of diesel and 15
million gigajoules of gas, avoiding 3mtCO2-e each year. This
will generate significant cost savings and reduce Fortescue’s
exposure to volatility in oil and gas prices.
In September 2023, we made a commitment to stop
purchasing voluntary carbon offsets. Instead, we redirect
the funds allocated to purchase voluntary offsets into our
1
3
2
Decarbonising Fortescue:
Fortescue’s ambitions and
actions, in either our own
operations or value chain,
in the short-, medium- and
long-term, to reduce our
greenhouse gas emissions.
Contributing to an economy-
wide transition: Fortescue’s
ambitions and actions to use
the levers and capabilities we
have available to embed and
accelerate a transition to a low-
greenhouse gas emissions and
climate-resilient economy.
Responding to Fortescue’s
climate-related risks and
opportunities:
Fortescue’s ambitions and
actions to enhance our
resilience to the changing
climate and respond to the
risks and opportunities that
arise from the transition to a
low-greenhouse gas emissions,
climate-resilient economy.
DECARBONISING
FORTESCUE
RESPONDING TO
FORTESCUE’S
CLIMATE RELATED
RISKS AND
OPPORTUNITIES
CONTRIBUTING TO
AN ECONOMY-WIDE
TRANSITION
TAKING A
STRATEGIC
AND ROUNDED
APPROACH
decarbonisation activities. In FY24, several hundred million
dollars, which would have been spent on purchased offsets,
was instead allocated to decarbonisation.
We believe practical, technology and policy-driven solutions
are key to managing the impacts of climate change. We
understand that climate change and the transition to net
zero presents both risks and opportunities to our business
and that it has the potential to impact our entire value
chain, operations, assets and the communities in which we
operate. We are implementing measures to mitigate and
manage these risks while maximising opportunities and
using these assessments to inform business strategies and
provide certainty to stakeholders that we will continue to
thrive in a net zero economy.
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Overview
Decarbonising
our iron ore
operations
Fortescue has a costed plan to decarbonise our Scope
1 and 2 emissions across our terrestrial Australian iron
ore operations by 2030. In September 2022, Fortescue
announced a US$6.2 billion capital investment to
decarbonise our Pilbara operations. We have identified
solutions to eliminate approximately 90 per cent of
terrestrial Scope 1 and 2 emissions from our Australian iron
ore operations and are actively working to identify solutions
for the final 10 per cent.
The decarbonisation of our own operations centres around
investing in renewable energy and using it to eliminate
the use of diesel and gas in our Australian iron ore
operations. Fortescue Zero will be a key enabler through
the development and supply of a range of green technology
products.
As part of our strategy to achieve Real Zero Scope 1
and 2 by 2030 for our Australian iron ore operations, we
are focusing on three interconnected decarbonisation
workstreams: green energy supply, green mobility, and
green systems and optimisation.
green energy
supply
green mobility
green systems &
optimisation
Renewable
generation
Heavy mobile
equipment
Other small emitters
Energy balance plan
& model
Transmission &
distribution
Site power
reticulation &
infrastructure
People & skills
Remote energy
balance schedule
and control
Storage
Rail
Demand response
Shipping VLOC
& tugs¹
¹ Capital expenditure relating to decarbonisation of shipping VLOC and tugs is excluded from Fortescue’s Board approved September 2022 announcement.
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Green mobility
Fortescue is committed to developing zero-emission
solutions to replace diesel-powered mine, port and rail
equipment. The majority of this equipment will be electric or
battery electric powered by our renewable energy system.
In FY24, the team continued to design solution pathways
consisting of both ‘off-the-shelf’ products and new
technologies via collaborations and partnerships with world-
leading original equipment manufacturers (OEMs), including
Liebherr.
FY24 milestones include:
• Onsite trials of our first prototype battery electric haul
truck, Roadrunner, concluded at Christmas Creek mine
site exceeding the performance expectations of the
battery power system while carrying 231 tonnes of iron
ore. Roadrunner brings several surface mining firsts,
including the ability to fast charge in 30 minutes and
capacity to capture and store regenerated power as it
drives downhill.
• Commissioning and site-based testing of a 3MW
prototype fast charger for battery electric haul trucks at
Christmas Creek.
• Commissioning of three Liebherr R 9400 E electric
excavators at our Cloudbreak and Solomon mine sites,
each having moved over 1 million tonnes in their first four
operational months. These are powered by the grid via
6.6kV substations, switchgear and more than 2km of high
voltage trailing cable.
• A prototype hydrogen fuel cell electric truck, Europa,
completed testing in Perth and is now undergoing site-
based commissioning at Christmas Creek.
• Commissioning and site-based testing of a prototype
Offboard Power Unit, which can power a Liebherr R 9400
E electric excavator that Fortescue Zero retrofitted from
a diesel unit, using onboard hydrogen and batteries as a
zero-emission fuel source, at Christmas Creek.
• Mainline trials of a dual-fuelled prototype ammonia-
powered locomotive at Solomon mine site, completing
eight banking trial runs with no incidents.
• Procurement of two battery electric locomotives from
Progress Rail, which are currently under construction
and due to be delivered for mainline rail testing in FY25.
Fortescue Zero’s battery electric locomotive prototype is
also under construction.
• At Solomon, we powered a dewatering well for the first
time for a period entirely from solar energy as part of
microgrid development. Microgrids will replace remote,
diesel generation where loads cannot be connected to the
main grid by 2030.
• Opening of a new state-of-the-art Fortescue Zero
technical innovation centre in Kidlington, UK, to focus
on the technical development, testing and prototype
production of batteries and zero emission powertrains
for a wide range of applications, including motorsports,
mining haul trucks, and other off-road and automotive
applications.
Green energy supply
We are making significant investments in renewable power,
battery storage and high voltage transmission to replace
stationary diesel, gas-fired power generation at our sites, as
well as the diesel consumed in our mobile equipment.
In FY24, Fortescue completed the construction of a 100MW
solar farm at North Star Junction, located near Iron Bridge.
North Star Junction Solar Farm is expected to produce more
than 250GWh per year, which represents more than 30 per
cent of our forecast FY25 energy demand for Iron Bridge
facility. North Star Junction Solar complements the 60MW
solar farm commissioned in 2021 as part of the Chichester
Solar Gas Hybrid Facility.
In FY24, Fortescue commenced construction on the high
voltage transmission line between our Solomon and Eliwana
mine sites, to complement the existing Pilbara Energy
Connect transmission infrastructure which connects
Solomon and Iron Bridge. By 2028 we aim to have all our
mines and renewable generation assets interconnected into
a single power grid.
Our ambition is that by the end of calendar year 2030,
100 per cent of our electricity demand will be met by
renewable sources. Detailed power system modelling
suggests we will need at least 2-3GW of wind and solar,
supported by battery storage, to satisfy our energy needs
with renewables. The build-out of our renewable energy
assets will be matched to the deployment of green HME
to ensure a balance between energy supply and demand
during this transition period to 2030.
In FY24, the Fortescue Board approved investment in
developing an additional 130MW solar farm and two battery
energy storage systems with total capacity of 270MWh. We
are concurrently undertaking feasibility and design studies
for further large-scale solar, wind, battery and transmission
infrastructure projects to build out our green energy system
and connect renewable energy generation to our mining
operations.
In FY24, we continued to work with community stakeholders
for land access and approval pathways for these and
future projects and anticipate additional wind and solar
projects will be ready for FID within the next two to three
years. Securing access to land to build our renewable
energy infrastructure involves navigating the complex and
changing regulatory requirements of local, state and federal
government. We are currently investigating opportunities
to sell excess renewable energy to support others reducing
their emissions.
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The Green Mobility group is also identifying solutions to
replace diesel generators, light vehicles, support mining
equipment and working with onsite contracting partners
to align on a pathway to successfully transition their fleets.
A suite of trials for validating battery electric light vehicles,
support mining equipment and electrical infrastructure are
planned throughout 2024 and 2025.
To date, the Fortescue Board has approved significant
capital investment to decarbonise its heavy mobile
fleet, including battery electric haul trucks, graders,
tracked dozers, electric excavators and associated site
infrastructure such as charging facilities and electric
cables. In total, Fortescue will replace over 700 units of
heavy mobile equipment as well as our mainline rail with
zero emission solutions over the next six years to 2030.
Some equipment will be developed through Fortescue Zero
working with OEMs, with Fortescue Zero developing the
zero emission power train. Other equipment, such as cabled
electric excavators, are commercially available already.
Green systems and operations
Fortescue is committed to operating its future decarbonised
mining assets and power grid safely, reliably and efficiently
in order to maximise value from the significant capital
investment.
Throughout the remainder of the decade, Fortescue's
power system will undergo a transformative shift from
a conventional, thermal generator-supplied grid to
one targeting 100 per cent Inverter-Based Resource
(IBR) penetration and very significant energy storage
capacity. Fortescue’s load profile is also changing with
the electrification of mining fleet, most notably the
introduction of battery electric haul trucks and their high
voltage charging stations. The scale and pace of this
transition requires world-leading solutions for ensuring both
continuous grid stability and optimal energy management.
The rapid transition in physical assets brings associated
variability in renewable energy availability and this
necessitates an equivalent evolution of the digital
technologies and systems used for Fortescue’s
mining and supply chain planning as well as real-time
operational control. The Green Systems workstream in
the Decarbonisation program is tasked with designing
and implementing these changes, working closely with
Fortescue Zero and partners such as the National Renewable
Energy Laboratory (NREL) in the USA plus leading vendors
to develop and deploy cutting edge digital solutions.
FY24 milestones include:
• Defining the future energy aware planning processes
for effective decision making over long, medium and
near-term horizons with a 100 per cent renewable energy
powered operation.
• Defining the control systems strategy for the
decarbonised power grid and associated electrified
mining equipment.
• Jointly developing with NREL an industry-leading bespoke
modelling platform to simulate and optimise modern
power grids.
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Decarbonising our
value chain
Fortescue’s second strategic pillar is reducing emissions in our
value chain, requiring us to address downstream Scope 3 emissions,
including those from our iron and steel customers, together with
upstream Scope 3 emissions from our supply chain.
Among our value chain Scope 3 emissions, upstream
emissions represent approximately three per cent (including
one per cent from purchased goods and services and one
per cent from shipping), while downstream processing of
sold product (Category 10) represents more than 97 per cent
in FY24. Hence, we prioritise engagement with customers
and investments in technology improvement to achieve low-
emission processing of iron ore.
Downstream emissions (our
customers)
During FY24, we transported 191.6 million tonnes of iron ore
to customers.
To meet our Scope 3 targets of enabling a 7.5 per cent
reduction in steelmaking emissions intensity by 2030
relative to FY21 levels and net zero by 2040, Fortescue is
collaborating with partners and investing in technology and
R&D to reduce the significant carbon emissions that come
from the shipping and processing of our iron ore.
We are conducting R&D both in-house and in collaboration
with steel mill businesses, global engineering companies
and research institutions. We are a founding member of
the Heavy Industry Low-carbon Transition Cooperative
Research Centre (HILT CRC). This venture brings together
industries, researchers, and government organisations in
an effort to de-risk the technology pathways to decarbonise
heavy industry. In addition to our yearly partnership
contributions, Fortescue also engages further via in-kind
contributions to the partnership's various projects.
Fortescue is currently progressing studies on the
development of commercial-scale green metal production,
both in Australia and abroad. Our work to convert
low grade hematite ore into low-carbon green metal at a
commercial scale is central to our efforts to reduce
Scope 3 emissions. The Green Metal Project at Christmas
Creek will demonstrate that Fortescue’s suite of iron ores
from the Pilbara can be processed into green metal.
The introduction of Iron Bridge is the largest contributor to
our overall emissions reduction in the near term, with it’s
ramp-up contributing up to two to three per cent reduction
in our emissions intensity by FY30. In addition, potential
for higher grade iron ore products from the Belinga Project
in Gabon could support an improved Fortescue product
portfolio offering that supports reduced Scope 3 emissions
intensity. This outcome is conditional on the development
of the project. The evaluation of downstream processing
of lower grade iron ore into green metal, which has now
begun, is an important initiative with the potential to reduce
Scope 3 emissions.
Shipping
Our commitment to address Scope 3 emissions also
includes a target to enable a reduction in emissions intensity
levels from the shipping of our iron ore by 50 per cent, from
FY21 levels by 2030. In FY24, Fortescue demonstrated the
use of ammonia for shipping on the Green Pioneer vessel.
We aim for all Fortescue’s own ore carriers to be powered
by green fuels by 2030. We are proactively engaging with
the shipping industry to promote a transition to ammonia-
powered vessels.
Our engagement with shipping suppliers includes interim
measures to identify and charter low-emission vessels
(greenhouse gas ratings of A-D), targeting vessels which
are equipped with energy-saving devices, optimising vessel
and fleet size, using eco steam performing vessels, and
optimising schedules for just-in-time arrivals.
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Upstream emissions (our supply
chain)
In FY23, we established a dedicated Decarbonisation
Project Management Office within our Contracting
and Procurement function, to identify and progress
decarbonisation opportunities in our supply chain. This
team is also integrating climate change requirements
into Fortescue’s source-to-contract process and building
internal capability to support our Decarbonisation Program.
In FY24, we continued to focus on education and
capability building with our onsite contractors to meet
our 2030 targets at our Australian iron ore operations.
Our Decarbonisation Project Management Office
engaged directly with 77 strategic suppliers about our
Decarbonisation Program and how to start developing
their own roadmap to Real Zero. We also established a
decarbonisation portal to share updates with our onsite
contractors. Key suppliers have been required to submit
decarbonisation plans.
We are working to improve our standard contract templates
to clearly communicate our minimum expectations and
reporting requirements with our suppliers to align with site
decarbonisation timelines. Our tender submissions also
include a request for product carbon footprint data and
emission profiles of equipment supplied. We intend to launch
new emissions contract clauses and introduce performance
metrics into strategic categories next year.
In FY25, we will begin developing our targeted strategy for
reducing Scope 3 emissions in our upstream supply chain. In
preparation for this work, we invited our active suppliers to
a decarbonisation information session hosted by the World
Economic Forum in May 2024.
For high-risk sourcing activities, our commercial strategies
focus on supply chain transparency to assess and validate
risk. Our award criteria consider sustainability, along with
price, quality and schedule. We prioritise suppliers who align
with our Values and commit to working collaboratively with
us to deliver sustainability outcomes in our shared supply
chains. We believe that genuine partnerships and commitment
to shared sustainability objectives with our suppliers lead to
opportunities for innovation, proactive risk identification and
mitigation, more effective remediation mechanisms, improved
supply chain resilience, and competitiveness in the market.
Case Study
CONTINENTAL
INDUSTRY
Fortescue collaborated with conveyor belt supplier,
Continental Industry, to complete an emission mapping
study, comparing two types of conveyor belts. Multiple
stakeholders supported the study, both internal Fortescue
teams and external Continental Industry teams.
Fortescue recognises that reducing Scope 3 emissions is
a challenge that cannot be tackled in isolation. Proactively
engaging with our supply chain to reduce and remove
upstream emissions is essential. As part of this journey, we
educated our suppliers, conducted internal evaluations, and
employed life cycle assessment (LCA) methodologies and
tools to assess the environmental impact of products and
processes.
The LCA-based assessment compared the decarbonisation
potential of Continental’s Conveyor Belts with Low Rolling
Resistance Covers (CV917) (‘Low Rolling Resistance
Conveyor’) vs. Standard Conveyor (CV913) (‘Standard
Conveyor’). Evaluations considered raw material input (kg)
and operational energy efficiency (kWh).
Overall, the Low Rolling Resistance Conveyor demonstrated
greater decarbonisation potential than the Standard
Conveyor. Additionally, during the trial, Fortescue observed
lower wear rates with the Low Rolling Resistance Conveyor,
which indicate reduction in change outs and extended
product life span.
Fortescue is strategically reducing emissions by developing
strong relationships with supply chain partners and
integrating life cycle thinking into decision-making
processes.
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Contributing to
an economy-wide
transition
We are seeking to make a significant and strategic
contribution to accelerating the global transition to a
zero-emissions economy. As an integrated green
technology, energy and metals business, we offer a suite
of zero-emissions products and technologies to support
industrial decarbonisation.
Our goal to eliminate fossil fuels from our Australian
terrestrial iron ore operations and value chain is driving
innovation in a suite of new decarbonisation technologies
that we are developing through Fortescue Zero and
elsewhere. In turn, we expect that we will be able to
market these technologies, and our wider expertise in
decarbonising industry, to support other industry players to
implement and fast-track their climate transition strategies,
thereby making a strategic and economy-wide contribution.
To encourage decarbonisation of industry beyond our own
operations and to facilitate an economy-wide transition, it is
essential to advance the adoption of renewable energy and
clean fuels, particularly green hydrogen.
Fortescue has focused R&D and investment on early-stage
technology as key enablers to making these energy projects
more economically attractive, including innovations across
solar, wind and battery technology, through means of
Fortescue-led R&D, venture capital funding, partnerships,
seed funding or acquisitions. This innovation focus and
investment also extends beyond the project components
themselves into the application and use of this energy,
including downstream energy carriers and end-use
applications that have potential to redefine paradigms
across multiple industries. A key strategic focus as part of
this downstream application is scaling the conversion of iron
ore into green metal, using hydrogen as a reductant.
Fortescue has a substantial opportunity to demonstrate
commercially viable technology, leveraging our innovation
to support green energy transition, and attracting further
investment in our green products and decarbonisation
technologies. We are working to develop the green
technologies for trucks, trains, planes, ships, electrolysers,
solar, cables, wind, batteries, hydrogen fuel cells and the
digital industry. Our values of generating ideas, stretch
targets and empowerment foster an embedded culture of
innovation across our workforce, placing our company at the
forefront of technological development.
Fortescue Energy comprises the integrated segments of
Green Energy Projects, Fortescue Zero (including Hydrogen
Systems and Power Systems), and Fortescue Capital. For
more information on these entities including achievements
in FY24, please refer to the Operation and Financial Review.
Fortescue Capital
Fortescue Capital is Fortescue's green energy investment
accelerator platform headquartered in New York City.
The platform is integral to Fortescue’s commitment to
deliver green energy projects, technology investments
and decarbonisation initiatives. For further information on
Fortescue Capital, please refer to the Overview section.
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Fortescue Energy
Fortescue is committed to green hydrogen and its
derivatives, maintaining a portfolio of projects which show
significant potential for decarbonisation and economic
growth. Current projects are described in the Overview and
in the Operating and Financial Review including four priority
green hydrogen projects:
• Arizona Hydrogen, USA
• Gladstone PEM50 Project, Queensland, Australia
• Holmaneset Project, Norway
• Pecém Project, Brazil.
Fortescue Zero
Fortescue Zero is the green technology and engineering
services business, creating the solutions required to drive
a zero emissions future. It is the driver for world-class
technical innovation, engineering, testing and manufacturing
services to deliver energy efficient performance. Our
progress and achievements within the two arms, Hydrogen
Systems, and Power Systems are described in the Overview.
Advocacy
By working in genuine partnership with policymakers
and civil society, Fortescue has a demonstrated history
of supporting strong economic and social outcomes
for our operating jurisdictions. As the energy transition
gathers pace, we are building on this legacy by leading
industry-wide action to inform, shape and shift key policy
measures to encourage, rather than undermine, industrial
decarbonisation.
Fortescue has contributed to a range of governmental
processes associated with transparency, target setting and
renewable energy uptake in our key operating jurisdictions.
For example, we:
• provided economic modelling to support a more
ambitious 2035 emissions reduction target for Australia
and practical economic policy ideas to broaden Australia’s
climate policymaking toolkit
• participated in multilateral, bilateral and regulatory
processes to demonstrate the viability of safe green
ammonia for maritime decarbonisation
• contributed to the stablisation of the Australia – China
relationship, including by hosting Premier Li Qiang at our
Fortescue Zero Prototype Facility in Hazelmere to discuss
opportunities for green metal supplies between our
countries.
Metals
operations
exploration
energy
hydrogen
systems
power
systems
capital
Projects
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Maximising opportunities and mitigating risks in the energy
transition
Led by Fortescue Executive Chairman, Dr Andrew Forrest AO, we have laid out a clear plan for policymakers and
economic leaders to support the transition to a zero-emission economy.
We engaged with the following key moments in FY24:
Promoting high-ambition
corporate leadership and
voluntary action in industrial
decarbonisation.
Shaping financial
institutions, processes
and flows to favour
green energy solutions.
Rallying policymakers
to reform fiscal, carbon
and trade policy to
incentivise faster
emissions reduction.
Participation in APEC 2023 in San
Francisco, COP28 in Dubai and the
World Economic Forum in Switzerland.
Making the case for stronger
transition planning with clear end
dates for fossil fuels.
Keynote address at the JP Morgan
Scottsdale Action Forum, Arizona
to over 100 prominent CEOs,
Chairs, bankers, US government
representatives and policy leaders.
Demonstrating Fortescue’s
progress on its industry-leading
decarbonisation strategy.
Participation in the IEA 50th
Anniversary and 2024 Ministerial
Meeting, Paris. Dr Forrest met with
the IEA Executive Director, Fatih Birol,
and spoke at a ‘High Level Ministerial
Dialogue’ on responsible investment
and private-sector collaboration to
accelerate energy transitions. Dr
Forrest also attended roundtables with
Energy & Resource Ministers, including
on the topic of critical minerals.
Briefing to His Majesty The King and
the Sustainable Markets Initiative
at Buckingham Palace and on the
Fortescue Green Pioneer.
Participation in the Choose France
summit in Paris with President Macron
to highlight Fortescue’s projects
in Europe, and its JV with OCP in
Morocco, which has the potential to
supply green electrons or molecules
to France.
Munich Security Conference, Munich.
Dr Forrest addressed policymakers,
alongside senior White House officials
on the need for significantly enhanced
emissions reduction ambition in 2025
NDCs. Fortescue also hosted an official
side event on climate change security
risks with the Australian Strategic
Policy Institute (ASPI), attended
by Special Envoy John Kerry and
Ambassador Rudd.
Keynote address to the Australian
National Press Club by Dr Forrest on
policy reform needed to help Australia
seize green industrial opportunities;
including through the termination of
the diesel fuel tax credit.
Dr Forrest attended the China
Development Forum in Beijing, and
the Boao Forum for Asia and Australia
China Senior Business Leaders
Forum in Hainan Province. Dr Forrest
made the case for China bringing its
leadership, manufacturing capacity
and innovation needed to leapfrog coal
and transition fuels, while accelerating
the global energy transition.
ASEAN-Australia Special Summit,
Melbourne. Dr Forrest spoke on
the main panel at the CEO summit,
attended by Australian Prime Minister
Anthony Albanese and Treasurer Jim
Chalmers.
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Overview
A just transition
Fortescue is committed to ensuring that
the communities in which we operate
benefit from our success. Our social
investment programs focus on providing
training, employment and business
opportunities for local people, particularly
considering vulnerable and Indigenous
communities and empowering women and
children. These programs, developed in
consultation with affected communities
and guided by our existing Social
Investment Framework and Human Rights
Policy, ensure investment is aligned with
our business objectives, our sustainability
strategy and the United Nations
Sustainable Development Goals.
As we develop our portfolio globally,
our commitment to building thriving
communities expands. For more
information about our broader approach to
ensure a just transition and social equity,
including our commitment to retain, retrain
and redeploy workers affected by our
decarbonisation efforts, please refer to our
FY24 Sustainability Report and our Climate
Transition Plan, available on our website at
fortescue.com.
A just transition
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Climate-
related risks
Climate change is a material risk for Fortescue and
has been consistently represented as such since the
commencement of our formal corporate social responsibility
and sustainability disclosures in 2017. In 2020, we began
standalone reporting on climate change, reflecting the
importance of this issue to our business.
Building on our long-term understanding of climate-
related risks and opportunities, we have further refined our
understanding of the potential implications of a changing
climate. This year, Fortescue has performed its first
sustainability double materiality assessment to support a
refresh in our strategy and to cast a greater spotlight on our
sustainability-related issues, including climate change.
Physical risks
Physical climate risks arise from the direct or indirect
impacts of changing climate and extreme weather events.
Increasing temperatures and the prevalence of extreme
weather events such as heatwaves, droughts and bushfires
can disrupt operations, damage infrastructure and challenge
supply chains. These conditions can lead to higher
operational costs, reduced productivity and potential losses
in revenue. Additionally, changes in precipitation patterns
and the increased frequency of intense rainfall events
heighten the risk of flooding, which can damage assets,
disrupt operations and lead to repairs and downtime. Coastal
assets are vulnerable to sea level rise and storm surges.
Bushfires present a significant hazard in the Pilbara region,
particularly during the summer months from November
to April. This period corresponds with the region's hot and
dry season, characterised by high temperatures and low
humidity. Climate change will have an impact on fire weather
patterns, especially the pattern of heavy rain promoting
vegetation growth followed by dry periods that create
abundant fuel, which can significantly heighten the risk and
intensity of bushfires.
Dry lightning, which occurs when thunderstorms produce
lightning strikes with little to no rainfall, creates ideal
conditions for igniting bushfires. Between November 2023
and January 2024, storms with lightning strikes and dry
conditions resulted in a total of 48 days of bushfires at the
Eliwana mine site. This level of bushfire exposure is unusually
high, partly due to drier-than-normal climatic conditions
and our reduced ability to implement preventative burning
controls during cooler times of the year.
Severe temperatures in locations where we operate can
also create a hazard. Temperatures are already extreme in
the northern part of Western Australia – and always have
been. However, temperatures are increasing and the state
endured one of its hottest summers on record this year with
temperatures 1.56°C above the 30-year average from 1991
to 2020. Several record maximum daily temperatures were
broken across the state.
Gabon, while not as hot, experiences humid conditions,
which will be an important consideration for managing
health and safety risks at the Belinga Project. Exposure to
excessive heat, particularly in humid conditions, can lead
to heat-related illness in our workforce working outside.
Climate change will increase the risk, and studies suggest
that, for every 1°C the planet warms, humidity rises by about
7 per cent. Increasing humidity can have significant impacts
as the upper limit of our bodies to deal with heat decreases
in high humidity, with heat stroke (the most severe form of
heat illness) becoming possible from as low as 31-35°C in
humid conditions.
The results from this assessment provided a framework for
a more granular analysis on how these material climate-
related risks are managed across our business. With this
approach, we continue to consider the outward social and
environmental impacts associated with our activities, as
well as the sustainability-related risks and opportunities
impacting our financial performance. Full details of this
assessment are provided in our FY24 Sustainability
Materiality Report available on our website at fortescue.com.
An overview of climate-related physical and transition risks is
presented below.
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Climate-related physical risks
RISK DETAIL
STRATEGIC RESPONSE
Damage to assets or operational disruptions resulting from the increasing occurrence of climate-related hazard events
Our asset portfolio is exposed to climate-
related hazards, potentially causing material
damage and/or production delays to our
mining and rail operations and connecting
infrastructure, leading to operational
disruptions, impacts to production rates and
increased capital costs associated with asset
repair. There is also the risk of disruptions to
overhead line assets due to lightning.
Global sea level rise coupled with storm
surge has the potential to cause material
damage to our port infrastructure and green
energy production facilities located within
proximity of watercourses/ coastlines through
inundation, with extreme winds potentially
causing port closures and evacuation of ships,
significantly disrupting freight schedules.
Fortescue is focused on building resilience into operations to protect
assets and minimise operational downtime from extreme weather
events.
We have constructed our port, rail and mine infrastructure to meet
engineering specifications, accounting for the future risk of extreme
weather events by considering current industry standards, including the
Australian Rainfall and Runoff Guidelines and the Standard Engineering
Specification for Drainage and Flood Protection. Infrastructure is
designed to have various levels of flood immunity depending on the
criticality and life of the asset.
We continue to work closely with the Pilbara Ports Authority and other
operators to minimise impacts to ship movements during extreme
weather events in Port Hedland in line with emergency management
procedures. Recognising the critical nature of the port operations and
risks arising from a changing climate, we endeavour to strengthen this
relationship to further enhance our understanding of possible future
scenarios to develop robust adaptation strategies.
To ensure the resilience of our operations into the future, we conduct
climate change assessments on hydrology (rainfall and flood risk)
as a standard activity on all project studies in Fortescue Energy and
undertake sensitivity assessments of facility floor levels, drainage
infrastructure and flood mitigation measures against climate change
affected storm events.
Supply chain disruptions and delays
Climate change impacts can also be felt
throughout our supply chains. Flooding,
heatwaves, storms or bushfires can disrupt
supplier production or impact transportation
corridors, which can cause delays.
Fortescue works with its transport providers to establish alternative
routes or transport modes in case of road closures due to storms, flooding
or bushfires. Where possible, inventory is transferred between Fortescue's
sites to reduce risk to assets and ensure continuity of operations.
Fortescue has an established network of transport providers available to
service our logistics requirements. Our contracted logistics vendors are
monitored in their performance with agreed insurances to further mitigate
risk.
We continuously explore opportunities to optimise existing supply
sources and identify alternative sources for critical goods and services
to diversify our supply chain. We also actively work to secure resources
within our control in order to strengthen the resilience of our operations’
logistics and critical services against supply disruptions.
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RISK DETAIL
STRATEGIC RESPONSE
Increased worker health and safety risks
Climate change impacts can result in illness,
potential loss of life or loss of production.
Extreme heat can lead to heat stress, which
can put employee safety at risk and disrupt
operations. Heat stress or stroke can cause
the worker to seek medical attention and take
time from work to recuperate. In severe cases,
exposure to extreme heat may even cause
death.
Fortescue has always operated in areas that are impacted by severe
weather events, extreme temperatures and bushfire risk, and we have
controls in place to manage these risks which will be more widely used if
impacts become more severe.
We manage the risk to the health and safety of our people, including
onsite contractors, by implementing a number of hazard control
standards and management procedures detailing requirements for
effective prevention, preparedness and response for hazards such as
extreme weather, flooding and cyclones.
We implement a Bushfire Risk Management program across all our sites
which focuses on the protection of people and key assets/infrastructure,
including fire buffer zones for each asset. The program incorporates
the use of prescribed burning to reduce fuel loads and minimise the
frequency, intensity and duration of bushfires.
Heat stress and vector or waterborne diseases, which includes potential
exposure to biological contaminants, are managed through our Fortescue
Health Standard and relevant procedures to ensure preventative
measures are adopted.
Tailings storage facility failure
Climate change impacts, such as increased
precipitation and/or storm intensities, have
the potential to place increased stress on
tailings storage facilities. The impacts may
also challenge operational assumptions about
water management and associated controls
for mitigating the risk of facility failure.
Our tailings management strategy is a risk-based approach to ensure
there are appropriate controls in place to mitigate risk of tailings storage
facility (TSF) failure, including assessment and provision for climate
change. Our TSF designs utilise risk-based design criteria such that the
risk of failure is as low as reasonably practical (ALARP). This includes
allowance of water management on our facilities up to the probable
maximum flood (PMF) event with allowances for increasing storm
intensities due to climate change. This is applied throughout operations
and planned for in closure.
Vulnerability to water-stress
The potential for prolonged drought events or
changes to precipitation patterns may place
increasing stress on the availability of water
resources required for mining operations
and green energy production. This may delay
approvals, lead to more stringent controls and
impact relationships with local stakeholders.
Reduced water availability (surface water and/
or groundwater) may impact on hydrogen
production, and drawdown of groundwater/
reduction in surface water flows may increase
potential for environmental impacts and/or
downstream/surrounding users.
Our water strategy is focused on reducing water usage across our
operations. This includes assessing technological solutions and
identifying metrics and internal performance standards to manage water
scarcity potential.
We take a risk-based approach towards ensuring secure water supply
and managing climate-related risks for each of our operations. Water
sources providing operational water supply that may be impacted by
changing climate are considered by assessing different (dry and/or wet)
climate scenarios. This informs us whether these water sources can meet
operational water demand and whether additional or alternative water
sources are required.
We also assess the extent to which prolonged droughts may place
additional stress on mine water supplies, which may increase the risk of
non-compliance with environmental approvals.
We incorporate drought conditions into water supply assessments during
evaluation of new projects, and we have included consideration of water
supply availability risk into our standardised risk module library to inform
internal project evaluation.
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RAIL BUCKLING
AND DERAILMENT
INCIDENT
CASE STUDY
Transition risks
Transitioning to a low-carbon economy involves extensive
changes in policies, laws, technologies, and markets to meet
climate change mitigation and adaptation requirements.
The nature, speed, and focus of these changes can create
transition risks that pose challenges for organisations.
For many, transition risks focus on challenges associated
with requirements to decarbonise and keep pace with global
developments. We are already investing heavily in green
energy and decarbonisation, demonstrating that change is
possible. Our transition risks also include challenges with
respect to supply and demand timing for our technology
and energy solutions and anticipating emerging and
developing regulatory requirements.
We continuously navigate market and technological changes
and adapt to evolving regulatory landscapes to maintain a
competitive edge and respond to enhanced sustainability
requirements. As countries and vulnerable communities
increasingly contend with accelerating climate impacts,
there is an elevated risk of social and policy tipping points
that may drive the introduction of tighter climate regulations.
By continuing to innovate, embracing sustainable practices
and aligning strategies with evolving market demands, we
can minimise our risks and capitalise on opportunities.
Dampier Bunbury Gas Pipeline
Cloudbreak
Christmas Creek
Eliwana
WESTERN HUB
Solomon
CHICHESTER HUB
NYIDINGHU
IRON BRIDGE
Karratha
Dampier
Roebourne
Marble Bar
Nullagine
Tom Price
Port Hedland
HERB ELLIOTT
PORT
Canning Basin
Fortescue’s climate change strategy includes a focus on
building resilience into our operations and protecting assets
to minimise operational downtime from extreme weather
events.
Fortescue’s three mining hubs in the Pilbara are connected
to our port facility by 760km of rail. In December 2023, a
heat-related buckle in our railway line led to a derailment
and damage of ore cars, about 150km south of Port Hedland.
On that day, the Marble Bar weather station recorded a
maximum temperature of 49.3°C at 3.56pm, marking one of
the hottest December days in Western Australia on record.
The wagons were empty when they derailed and there were
no injuries recorded. However, the derailment impacted
supply of iron ore to our port operations for 78 hours.
Accelerated re-rail program
Our Rail Maintenance team has already been implementing
an accelerated re-rail program as part of our standard
rail maintenance procedures. With annual expenditures
of approximately A$50 million, the program focuses on
rectifying identified track defects to manage our asset.
As part of this program, and in specific response to the
incident, an internal investigation was launched into the
impacts of extreme heat on the railway infrastructure to
review and quantify our maintenance strategy and to better
understand the various interacting causal factors leading to
heat-related buckle. The investigation results were verified
by an independent technical expert team from Monash
University, ensuring the reliability and accuracy of our
findings and actions.
The learnings derived from this investigation have informed
our modelling and risk assessment processes, supporting a
more holistic approach to maintenance practices including
those that consider the potential for increased likelihood
and severity of extreme weather events that may eventuate
as a result of climate change.
DERAILMENT
LOCATION
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Climate-related transition risks
RISK DETAIL
STRATEGIC RESPONSE
Existing and emerging policy and regulatory demands resulting from a global goal to decarbonise
Evolving policy and regulatory
changes are a material risk for
Fortescue, including regulatory
uncertainty in relation to green
hydrogen and ammonia.
There is also ambiguity and lack of
global alignment of the definition
of what is considered to be a
green fuel. Inconsistent guidance
across jurisdictions can lead to
misalignment with stakeholder
expectations, challenges in
reporting, and difficulties in selling
‘green’ fuels.
We closely monitor policy and regulatory developments and regularly conduct
scenario analysis to anticipate potential regulatory changes impacting projects and
the ability to source compliant fuels.
We proactively engage with government bodies, regulators and industry associations
to influence favourable policy and regulatory outcomes and advocate for global
mutual recognition in the various markets and reporting standards. For more
information about our engagement strategy, including engagement and advocacy
activities with industry and government, please refer to our Climate Transition Plan,
available on our website at fortescue.com.
We understand that investors
are increasingly prioritising
sustainability criteria when making
investment decisions, resulting in
elevated pressures to comply with
complex standards to maintain
investor confidence and ensure
access to capital.
Fortescue has extensive engagement with shareholders, lenders and the investment
community on sustainability matters to ensure it is transparent in its approach and
that investors areas of concern are understood. ASX Releases, investor and analyst
briefings and the Annual Reporting suite are important channels to communicate
and report on Fortescue's approach to sustainability.
In November 2023, we launched Fortescue Capital, headquartered in New York City,
as a new green energy investment platform and an integral next step in Fortescue’s
commitment to deliver green energy projects and decarbonisation investments.
As a fiduciary of third party capital, we must not only meet our own rigorous ESG
standards, but also the requirements and expectations of our investors. These
institutional investors – typically pension funds, sovereign wealth funds, foundations
and endowments – are known for their exemplary commitment to sustainability
and ESG principles, often regarded as the gold standard in the industry. This dual
sensitivity fosters a culture of accountability and continuous improvement.
Emerging technologies and technical viability of decarbonisation
We accept that there are, and will be
in the future, technical challenges
related to decarbonisation. The
achievement of our decarbonisation
targets depends on Fortescue’s
success in integrating new zero
emission technologies into existing
operations in an accelerated
timeframe. This could lead to
unforeseen operational issues
impacting production.
Fortescue is rapidly adapting and applying existing technologies in new ways and
working with OEMs to develop and deploy entirely new technology in our operations.
Integrating new zero-emission technologies into existing operations is complex. It
involves replacing or evolving legacy systems and establishing new robust operating
systems as we introduce intermittent renewable energy sources and battery storage
to power a new electrified fleet. To ensure seamless integration and mitigate any
potential risks, we are testing all zero-emission technology in our own operations
under controlled conditions before broader deployment.
We continue to work with leading technology providers to minimise all risks
associated with technology performance as well as the integration of such
technology into an existing operating environment.
As a first-mover company we face
the transition risk of balancing
the protection of our intellectual
property (IP) to maintain a
competitive edge with the need to
share knowledge to drive industry-
wide progress.
Successfully navigating conflicting dynamics is essential for Fortescue to lead in
innovation and global decarbonisation efforts.
Fortescue Hydrogen Systems (FHS) leverages its ability to rapidly prototype,
enabling fast turnaround times for inventions, which in turn facilitates the rapid
analysis of commercial and technical viability in practice. This ability ensures that
invention disclosures are quickly converted into patent applications, maintaining
an agile approach to protecting the IP generated. FHS has also actively segregated
business units developing individual components with high-value IP.
Fortescue Zero manages competitive technology and IP risk on a case-by-case
basis, ensuring a suitable approach depending on the nature of the IP whilst ensuring
collaboration with external partners.
Additionally, we conduct market intelligence to identify future technologies and
baseline the current performance of our internal product development, ensuring we
remain at the forefront of the industry.
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RISK DETAIL
STRATEGIC RESPONSE
We rely on the future availability
of a workforce proficient in
advanced green technologies,
renewable energy systems and
hydrogen production. The current
labour market has a limited
supply of skilled professionals in
these emerging fields, and the
intense competition for talent
in the renewable energy sector
further exacerbates the challenge
of attracting and retaining the
necessary expertise.
We are in a unique position as a vertically integrated green metals, technology and
energy business. Our people operate across the full value chain and are excited
to be developing new technology, testing new systems, and rethinking the way
traditional mining operations are powered and run. Strengthening our brand through
showcasing decarbonisation initiatives and fostering a supportive work environment
further distinguishes us as an employer of choice in the sector.
Our commitment to pioneering decarbonisation practices positions us as an
employer of choice for professionals seeking to contribute to transformative
environmental initiatives. Guided by our Workforce Transition Strategy launched
internally earlier this year, we are heavily investing in our people through
apprenticeships, nationally recognised qualifications, OEM training and in-
house developed training packages, fostering internal capability development
opportunities and demonstrating a commitment to career growth in renewable
energy.
For Scope 3, there is a risk that
technology and policy do not keep
pace with our decarbonisation
ambition. In addition, some of our
customers might not transition
to low-carbon technologies and
practices at the necessary pace.
Meeting Scope 3 decarbonisation
targets involves overcoming major
technical obstacles to produce
green steel, including application
of hydrogen-based processes
and renewable energy integration.
These innovations require
addressing significant engineering
challenges related to optimising
efficiency, ensuring reliability, and
achieving scalable deployment.
Without technology changes, limited Scope 3 reductions are achievable. Fortescue is
actively developing and scaling several zero emission reduction and electric smelting
technologies to show that change is possible.
The adoption of hydrogen-based technologies in green metal production offers a
pathway to decarbonise the steelmaking process. The production of green metal
using hydrogen as a reducing agent, instead of carbon-based sources like coke in
traditional blast furnaces, significantly reduces carbon emissions in the production
of steel. This process, known as hydrogen direct reduction, emits water vapour rather
than carbon dioxide.
Most of the iron and steelmaking technology development to date has focused
on the processing of ultra high-grade iron ores, which comprise a small portion
of global production. Fortescue’s iron ores, and those of Australian producers in
general, require a different technological solution for processing into emission-free
iron and steel. Fortescue is mitigating the risk of implementing relatively unproven
commercial-scale technologies by fast-tracking pilot projects such as the Green
Metal Project, which aims to produce its first green metal in 2025. This project will
test the technologies needed for the production of green metal using Australian iron
ores which are not ultra high-grade.
Shifts and uncertainties in market demand for our commodities, products and services
The global push towards reducing
carbon emissions and enhancing
sustainability may alter demand
patterns in the steel industry. The
rise of green steel production may
demand different types or grades
of iron ore, potentially reducing
the need for traditional iron ore
products.
We maintain strong relationships with our customers to ensure supplies of iron ore
meet their expectations in terms of quality, consistency and reliability of supply.
Fortescue produces a range of products, with several higher quality, and lower
emissions products, including our new magnetite product from Iron Bridge, as well as
hematite products including Kings Fines, West Pilbara Fines and Fortescue Lump.
Diversification of Fortescue’s product offering buffers uncertainties in market
demand and allows us to manage the placement risk of lower grade volumes and
pivot towards potential growth markets.
Fortescue is also investing in iron making technologies that use our ores as input to
produce green metal while producing the green inputs for the process (decarbonised
iron ore, green hydrogen and renewable energy) and constructing the Green Metal
Project to demonstrate that green metal production is feasible for Fortescue’s ore
types.
RISK DETAIL
STRATEGIC RESPONSE
The economic viability and cost-
competitiveness of green hydrogen
and ammonia present another
major transition risk. Currently,
green hydrogen production is
more expensive than traditional
methods due to high costs of
electrolysers and renewable energy
infrastructure. Market confidence
may be impacted if green energy
projects are not executed or are too
cost intensive.
To address the economic viability and cost-competitiveness of green hydrogen,
the GEM Centre has initiated the manufacturing of electrolysers on its automated
assembly line and is currently optimising processes to reduce overall assembly
duration. By leveraging automation and scale, the business mitigates labour
constraints and reduces component costs, ultimately achieving a lower cost of
hydrogen.
Producing high pressure proton exchange membrane (PEM) electrolysers offers
several key technological advantages that enhance cost competitiveness. The
fast response times of PEM electrolysers enable higher utilisation factors when
operating on variable renewable energy, while their high pressure and purity reduce
downstream gas processing requirements, thereby lowering the overall cost of
hydrogen production. This approach not only supports the economic viability of
green hydrogen but also builds market confidence by demonstrating efficient and
cost-effective execution of green energy projects.
Reputational damage tied to changing societal expectations
We consider our Real Zero
transition not just a regulatory
or ethical mandate but also
a competitive differentiator.
Falling short of decarbonisation
commitments can result in a loss
of competitive edge, damaging our
reputation, eroding stakeholder
trust and brand value.
We are investing heavily in the decarbonisation of Fortescue’s iron ore operations in
order to meet our Real Zero commitments.
Our Fortescue global brand is built on a vision of shareholder value in the growing
green transition. Sustainability has been deeply integrated into the way our business
orients to market.
The examples of decarbonisation of our mining operations, the core technologies
coming to market under Fortescue Zero and the large-scale energy projects we have
under development are compelling proof of our commitment and will remain a key
aspect of our strategic communications.
Our portfolio has grown through acquisition and research, and now includes many
different aspects of the global green transition. This increased scale of our global
operations abates some risk as well.
We connect regularly with our stakeholders across the business and work to deliver
narrative examples across our channels, and to evaluate if any challenges are going
to impact our plans.
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RISK DETAIL
STRATEGIC RESPONSE
Potential greenwashing allegations
pose a significant risk to our
business, as they can undermine
our reputation and lead to legal and
financial penalties.
If our sustainability efforts are
perceived as misleading or if we
unintentionally fail to comply with
the law, environmental regulations
or ‘green’ product certification
requirements, we risk eroding
stakeholder trust and attracting
scrutiny from third parties
including regulators, shareholders,
environmental and activist groups,
and competitors, which could
result in legal consequences (e.g.
damages and injunctions) and
damage to our reputation and
market credibility.
We deliver advice and training to Fortescue personnel on the risks of greenwashing,
and we prepare and circulate guidelines on best practices to help mitigate risk.
Additionally, we review and advise on greenwashing risks in various company
materials and publications, including annual reports. Our market announcements are
handled in accordance with our Continuous Disclosure and Market Communications
Policy. By integrating sustainability into our core business strategies, we align all
aspects of our operations with our sustainability goals, with the goal of ensuring
transparency and credibility.
In 2023, we made improvements to our internal verification process to continue to
ensure Fortescue’s publications accurately represent our activities. Led by our Legal
team, this process involves checks to verify the accuracy of our sustainability claims
and help prevent misleading information.
Prioritisation of decarbonisation
strategy to address climate
change may divert focus from
other sustainability-related risks.
This could lead to potential
challenges to uphold our social
and environmental policy
commitments. Balancing our focus
on climate action with our broader
sustainability obligations remains
critical to maintaining stakeholder
trust and ensuring comprehensive
environmental stewardship.
Sustainability is integrated into our decision-making, 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 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. Our unique culture and Values form the base of our sustainability approach,
which drives specific policies, ambitions and targets.
Fortescue operates under a Code of Conduct and Integrity which reflects our Values
and represents our commitment to uphold the highest ethical business practices.
Our core principles and Values are documented in the Code, which is supported by a
suite of policies and standards that shape our business, including several supporting
our sustainability related matters such as our Anti-Bribery and Corruption Policy,
Diversity Policy, Environment Policy, Equal Opportunity, Discrimination and
Workplace Bullying Policy, and our Health and Safety Policy.
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CLIMATE-RELATED
GOVERNANCE
MANAGEMENT
BOARD
SUSTAINABILITY
COMMITTEE
Support and advise the
ARMSC on climate-related
strategy, risks and reporting
Emissions actuals
and forecasts
DECARBONISATION
STEERING
COMMITTEE
Guidance and direction
to decarbonisation
program leadership
Endorse capital
investment decisions
Solution Selections
Program progress including
capital estimates
FORTESCUE ENERGY
PROJECT INVESTMENT
COMMITTEE
Provide input and guidance
on capital investments
related to Energy:
Projects
Large operational purchases
and fees
Large investments
Remuneration and
People Committee¹
Nomination
Committee¹
Finance
Committee¹
Audit, Risk Management
and Sustainability Committee¹
1 Effective 1 July 2024, Fortescue implemented a new committee structure. The new committees are:
(a) Audit, Finance and Risk Management Committee
(b) People, Remuneration and Nomination Committee
(c) Safety and Sustainability Committee
Climate-related Governance Framework
Good corporate governance is critical to the long-term
sustainable success of Fortescue and is the collective
responsibility of the Board and all levels of management.
We seek to adopt leading practice and contemporary
governance standards and apply these in a manner
consistent with our culture and Values. Fortescue’s
governance framework is outlined in our FY24 Corporate
Governance Statement and includes a description of:
• our governance framework
• the role and responsibilities of our Board, committees and
directors
• the role of the Delegations of Authority
• meeting attendance for our Board and committees
• Board skills matrix and diversity
• how directors maintain the skills required to discharge
their duties.
The FY24 Corporate Governance Statement, Statement
of Matters Reserved for the Board and Charters for each
committee are available on our website at fortescue.com.
The Board has delegated responsibility for day-to-day
activities to the executive team. This includes delegated
responsibility for instilling, reinforcing and living our Values,
executing our business strategy, managing business
performance, reviewing and managing material risks,
including climate-related risks, and leading and developing
people and talent within the organisation.
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Sustainability Committee
At the executive level, the Sustainability Committee (SC)
is responsible for supporting and advising the Board-level
Audit, Risk Management and Sustainability Committee
(ARMSC) on sustainability matters including those
that relate to environmental policy and management,
human rights, climate change strategy, procurement and
social investment, and for ensuring policies, processes
and standards are being implemented for the effective
management of sustainability matters. The SC is chaired by
the Director of Sustainability and External Affairs or a C-suite
Executive.
Members of the SC include executive officers and senior
leadership representatives from a number of areas,
including:
• C-Suite executive team (Chief Executive Officers (CEOs),
Chief Financial Officer (CFO), Chief Operating Officer
(COO))
• Sustainability and External Affairs
• Legal
• Approvals, Community and Environment
• Decarbonisation
• Contracts and Procurement
• Communications
• Investor Relations and Funding
• Fortescue People.
The SC met three times in FY24 and provided updates
and advice to the ARMSC at its quarterly meetings on
a range of climate-related issues, including emissions
actuals and forecasts, Science Based Targets initiative
(SBTi) submissions and emerging mandatory disclosure
requirements. From 1 July 2024, such updates will be
provided to the newly-established Safety and Sustainability
Committee.
Decarbonisation Steering
Committee
The Decarbonisation Steering Committee (DSC) comprises
the Fortescue Metals and Fortescue Energy CEOs and
the Fortescue CFO and additional executives as required
depending on the topics for discussion. The DSC
endorses capital investment decisions in advance of these
progressing to the Board; makes decisions on solution
selection; reviews program progress, including updated
capital estimates; and provides guidance and direction to
the Decarbonisation Program leadership.
The DSC met eight times in FY24 and provided updates and
advice to the ARMSC at its quarterly meetings on a range
of issues, including implementation of our decarbonisation
strategy and allocation of capital for decarbonisation
projects. From 1 July 2024, such updates will be provided to
the newly-established Audit, Finance and Risk Management
Committee (AFRMC).
Project Investment Committee
and Gateway Review Group
Fortescue has strong dynamic capabilities, taking advantage
of opportunities as they arise to establish competitive
advantage and initiate change. Our greatest opportunity
potential lies within the transition into a vertically integrated
green energy and resources company. To support this
transition, we have clear guidelines established to support
the process of evaluating new investments and development
opportunities.
The Fortescue Energy Project Investment Framework (PIF)
guides the evaluation and development of capital investment
opportunities from project inception to construction and
operations. The PIF drives consideration and assessment of
a wide range of criteria including commercial viability and
emission reduction potential, as well as sustainability and
human rights issues. As a project matures from inception
to execution, it is reviewed by the Project Investment
Committee prior to Board approval.
There is an existing development framework for Metals
projects, and with the recent amalgamation of our Projects
teams we will be looking to amend the PIF process to include
all Major Projects.
Similarly, at Fortescue Zero, the New Product Creation
System provides high-level guidance on the process to
facilitate delivery through a structured set of milestones.
This ensures that a wide range of sustainability
considerations are incorporated throughout the
development of new products. All projects are subject
to prior review and recommendation by the Gateway
Review Group. Membership of this group consists of lead
representatives from each part of the business involved in
the opportunity being discussed.
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Managing risk
Fortescue takes a risk-based approach to understand its exposure and
vulnerability to climate change.
Our risk culture emanates from our Values, builds on our
Code of Conduct and Integrity and is operationalised
through Fortescue’s Risk Management Framework (FRMF).
The FRMF provides a consistent approach to identifying,
assessing and treating risks, monitoring associated
controls and reviewing the continued effectiveness of risk
management across the business. It consists of a Risk
Management Policy, Risk Management Standard and a
Risk Management Procedure, and is further supported by
standards on planning for business continuity and disaster
response.
The consistent application of Fortescue’s Risk Management
Standard by all management teams directly supports the
Board’s oversight of the material risks that could impact
Fortescue’s ability to create or preserve value for its
stakeholders over the short, medium and long term. In line
with our Values and a strong belief in the long-term success
of developing internal capability, we have a designated
Climate Risk subject matter expert working with our Risk
and Assurance team to reinforce consideration of climate
risk within our risk culture and risk management processes.
For further information on the FRMF and our material risk
exposures, please refer to our FY24 Corporate Governance
Statement, available on our website at fortescue.com.
Integrating climate change into
enterprise risk management
Fortescue is building on our long-term understanding of
climate-related risks and opportunities as we turn our focus on
integrating climate change into our global risk management
system (CGR) aligned to our FRMF.
We have commenced an internal review process to refine and
consolidate processes and practices, leveraging our FRMF
to ensure a consistent and integrated approach to identify,
assess, prioritise and monitor climate-related risks across the
business. The review feeds into our internal Climate Readiness
Program, set up with a focus on coordinating and building
internal capabilities to enable consistent integration of climate
risk within a number of critical business functions.
Given its significance within Fortescue’s value chain, we
started the process using a case study approach to analyse
key operational risks associated with Herb Elliott Port
and associated key port infrastructure. In this process, we
specifically focused on possibilities to integrate climate risk
assessment methodology into existing risk management
practice, with the intention to apply learnings across our
whole suite of material climate-related risks and opportunities
identified through the Sustainability Materiality assessment
(see climate-related risks in Our Strategy).
Provide scope,
context, criteria
Treat risk
Monitor and
review
Identify and
assess risk
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Leveraging our existing risk management framework
Identify and
assess risk
The risk identification process
includes the systematic
identification of potential
threats and uncertainties
that could affect our ability to
achieve objectives.
Relevant stakeholders
are involved to assess the
potential likelihood and
consequence of the risk and
determine whether the risk is
material to the business.
Integration of climate change will involve identifying and monitoring climate-
related risks at multiple levels within the corporate risk management system.
Climate-related risks are identified at the strategic level and entered as a ‘parent
risk’ into Fortescue’s Sustainability risk register. This ensures strategic oversight and
collaboration across various business areas.
Parent risks will then be linked to their corresponding ‘operational’ risks managed
by the respective teams, creating multiple ‘layers’ of how climate-related risks and
opportunities are monitored across the business.
With a specific focus on Herb Elliott Port and the Judith Street Harbour towage
infrastructure in Port Hedland as a case study, we considered the strategic risk
of potential damage to assets or operational disruptions, specifically looking at
eight existing risk events in the port operations risk register with climate-related
hazard exposure. Risks included Port Hedland channel blockage, vessel sinking
or grounding at Fortescue berth, potential environmental breaches, fixed plant
structural failure, and failure of shiploader, stockyard balance machine and train
unloader.
Provide scope,
context, criteria
The risk management process
begins with defining business
objectives, and managers
regularly review risks in
relation to these objectives.
Internal and external factors
influence risk exposure,
including economic or
geopolitical developments,
climate change, communities’
and investors’ expectations, or
legislative requirements.
Integration of climate change will involve operationalising the consideration of
multiple time horizons into relevant business risks and to introduce standardised
guidance on climate-related scenario analysis for strategic and operational level
application.
The Risk Management Standard sets a materiality threshold for the risks of greatest
significance to Fortescue and outlines the Company’s expectations with respect to
understanding and managing those risks. Material operational risks, such as those
related to port and rail infrastructure, are identified and articulated in the Group’s risk
management system.
Managing climate-related risk requires a more forward-looking approach than is
typically used for other risks because climate change is considered an ‘emerging’
risk, as physical climate hazards may worsen over time and the transition to a net
zero economy becomes increasingly urgent.
Strategic
identification and
montoring
Parent risk
owenership
determined by
Risk owenership
within the
business
Corresponding
risk events
recorded in CGR
Location
Northern hub risk
register:
Port operations
Asset failure risks
Environmental
breach
Other risks
Business
function
Parent risk in
Sustainability risk
register:
Physical impacts
of climate change
and damage
to Fortescue
infrastructure
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Treat risk
Once a target risk rating is
set and agreed upon, the risk
treatment process involves
developing strategies to
address risks consistent with
Fortescue’s risk appetite.
Options for managing each
risk include accepting the risk,
avoiding the risk, transferring
the risk or mitigating the risk.
Integration of climate change will involve introducing a forward-looking approach
to risk and vulnerability management and developing standardised processes and
procedures to systematically capture impacts of climate-related events.
Identified operational risks were re-assessed to consider medium and long-term
horizons to take account of the possible increase in the frequency and intensity of
extreme events for high emission trajectories. Risk treatment plans are also reviewed
to identify vulnerabilities to projected changes.
While approaching unprecedented conditions, to understand the implications of
future change requires a robust understanding of current climate-related impacts to
evaluate risks, allocate resources, and develop strategies for long-term resilience.
Monitor and
review
Risks are reviewed at
least annually, including
re-evaluation of the risk
environment, assessment of
critical control effectiveness,
and a review of the status of
risk treatment actions.
The directors, through the
ARMSC1, regularly review the
Group’s risk profile and assess
progress in managing high
and extreme risks.
Integrating climate change into operations will involve setting up a physical climate
risk dashboard, representing worst-case scenario exposure across multiple time
horizons.
A forward-looking reassessment of existing operational risks revealed that while
some risks are already well-controlled, others could escalate due to climate change
if not proactively managed. The introduction of a designated climate-risk dashboard
will support internal monitoring and review processes, illustrating expectations of
how climate-related risks and potential impacts may evolve over time.
1 From 1 July 2024, such reviews will be undertaken through the newly-
established Safety and Sustainability Committee.
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Climate resilience
Fortescue commenced scenario-driven analysis in 2019 in line with TCFD-
aligned climate disclosure requirements. Since then, scenarios have been
continuously revised to reflect global developments and to accommodate our
rapidly evolving business needs.
In 2023, we progressed our approach to scenario analysis,
building on the narratives proposed in the IPCC Sixth
Assessment Report. To assess physical climate risks,
we used SSP1-1.9 (a low emission scenario), SSP2-4.5
(a moderate emission scenario), and SSP5-8.5 (a high
emission scenario) to explore our exposure to physical risk
for Pilbara assets, Phoenix (Arizona, US), and the Coastal
China region for 2030 and 2050. The analysis included
the anticipation of a worst-case scenario to understand
extremes to inform infrastructure design standards. While
high-end emission scenarios are considered increasingly
unlikely, we acknowledge that this cannot be ruled out due
to uncertainties associated with potential feedback in the
climate system, including tipping points.
For transition risks, we selected three low-emission
scenarios (SSP1-1.9, SSP2-2.6, SSP5-2.6) considering
differences in economic and population growth, resource
demand and global trade. In this assessment, we focused
on the influence of key value chain jurisdictions, namely the
European Union, the US and China. The three low-emission
scenarios represent divergent economic narratives to
a common global decarbonisation path, one of which is
consistent with the most ambitious global temperature
goal set out in the Australian Climate Change Act 2022.
Considering multiple scenarios is important in transition
planning, as these require us to evaluate a variety of
socio-economic challenges associated with mitigation and
adaptation actions. Moving beyond an orderly transition
scenario assumes that companies and governments must
decarbonise quickly and therefore takes into account the
increased risk of sudden market and policy changes.
As we move towards Real Zero, deciding which growth
options to pursue will be increasingly complex due to
varying levels of uncertainty and risk. We continue to
build our knowledge on climate change scenarios and
future global outlooks by engaging with multiple external
information providers. These viewpoints help us understand
of the pace of the global transition towards renewable
energy use and potential emission reduction trajectories
over time. Both fast and slow energy transitions contemplate
technology development, market demands, and cost factors
for products and energy.
The impacts of these scenarios will be incorporated into the
strategic planning and decision-making processes across
all of Fortescue’s growth options in technology, energy
and metals. Initial analyses will be conducted in FY25, with
plans for broader integration as appropriate throughout the
organisation.
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METRICS
Greenhouse gas
emissions
Our objective for Scope 1 and 2 emissions is to eliminate
the use of fossil fuels from our Australian iron ore terrestrial
operations by 2030. To address Scope 3 emissions,
Fortescue has set a target of net zero Scope 3 emissions by
2040.
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.
In Australia, Fortescue has a mandatory obligation to report
Scope 1 and 2 emissions from its Australian operations
above a certain threshold under the National Greenhouse
and Energy Reporting (NGER) scheme. Established by the
NGER Act 2007, the NGER scheme is a national framework
for reporting company information about greenhouse gas
emissions, energy production, energy consumption and
other information specified under NGER legislation.
Fortescue’s FY24 emissions are calculated in accordance
with the Greenhouse Gas (GHG) Protocol’s Corporate
Standard, the GHG Protocol’s Scope 2 Guidance, Corporate
Value Chain (Scope 3) Standard, and Technical Guidance for
Calculating Scope 3 Emissions and in accordance with the
NGER Measurement Determination 2008 for our emissions
mandated under NGER legislation.
At Fortescue, we place high importance on data quality
for all sustainability issues and continuously improve
our systems and processes to increase quality, integrity,
relevance and completeness of emissions data. We
continuously seek to improve our data sourcing, focusing on
the most material emissions categories.
Our approach to boundary setting and our emissions
calculation is available in our FY24 Emissions Calculation
Methodology document at fortescue.com.
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Scope 1 greenhouse gas emissions
FY24 emissions (mtCO2-e)
FY23 emissions (mtCO2-e)
FY22 emissions (mtCO2-e)
Total Group Scope 1
2.36
2.20
2.21
Our most significant Scope 1 emissions include those from our Australian iron ore operations and Fortescue marine vessels,
which consist of eight very large ore carriers and nine tugboats that operate under Fortescue’s operational control in Port
Hedland.
The increase in emissions is driven by increased consumption of gas to meet the power demand of our Iron Bridge facility.
For information on our strategy to reduce these emissions please refer to the Decarbonising our Iron Ore Operations section.
As mentioned in our Climate Transition Plan, the introduction of Iron Bridge ores in our product offering will enable up to two
to three per cent reduction in our Scope 3 emissions intensity by FY30.
Scope 2 greenhouse gas emissions
Fortescue adopts dual reporting for its Scope 2 emissions: market-based method and location-based method.
FY24 emissions (mtCO2-e)
FY23 emissions (mtCO2-e)
FY22 emissions (mtCO2-e)
Total Group Scope 2 - location based
0.37
0.35
0.33
Total Group Scope 2 - market based
(reported for whole Group in FY24,
and for Australia only in FY23 and
FY22)
0.50
0.54
0.43
Increases in Scope 2 location-based emissions in FY24 is largely attributed to the increased electricity consumption at the
Iron Bridge concentrate handling facility as a result of increases in production.
Decreases of our Scope 2 market-based emissions in Australia in FY24 is driven by the decrease in the national residual mix
factor.
Progress against our Scope 1 and 2 absolute target
Emissions covered by our Real Zero target represent 87 per cent of our FY22 Group Scope 1 and 2 emissions (our base year).
Annual progress against this target is present in the table below:
FY24 emissions (mtCO2-e)
FY23 emissions (mtCO2-e)
FY22 emissions (mtCO2-e)
Metals Australian Terrestrial
Scope 1 emissions
2.02
1.91
1.88
Metals Australian Terrestrial
Scope 2 emissions
(location-based)
0.36
0.35
0.33
Metals Australian Terrestrial
Scope 1 and 2 emissions
(location-based)
2.38
2.26
2.21
Energy efficiency initiatives helped limit the increase in these emissions in FY24 to 5.4 per cent. This reflects a reduction
of approximately 10 per cent against Fortescue’s budgeted emissions for the year.
Scope 1 and 2 physical intensity
Emissions intensity refers to the amount of greenhouse gases emitted per unit of output. This provides insight into the
energy and emission efficiencies of each tonnes of iron ore produced and shipped.
Unit
FY24
FY23
Iron ore shipped
wmt
191.6
192.0
Group Scope 1 and 2 emissions (location-
based)
mtCO2-e
2.72
2.55
Group Scope 1 and 2 location-based
emissions intensity
tCO2-e/wmt of
ore shipped
0.014
0.013
The 6.9 per cent increase in Scope 1 and 2 emissions combined with a 0.2 per cent decrease in ore produced, resulted in a
7.2 per cent increase in emissions intensity in FY24. This is driven by increased consumption from facilities that are still powered
by fossil fuels. For information on our strategy to reduce these emissions please refer to the Decarbonising our Iron Ore
Operations section.
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Scope 3 greenhouse gas emissions
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.
Group Scope 3 Category
Year on year variance
FY24 emissions
(mtCO2-e)
FY23 emissions
(mtCO2-e)
Category 1: Purchased goods and services
12.6%
2.82
2.50
Category 2: Capital goods
5.1%
0.13
0.12
Category 3: Fuel- and energy-related
22.7%
0.61
0.50
Category 4: Upstream transport
20.1%
2.99
2.49
Category 5: Waste
—
0.01
—
Category 6: Business travel
1.7%
0.03
0.03
Category 7: Employee commuting
(10.9)%
0.03
0.03
Category 8: Upstream leased assets
17.4%
0.13
0.11
Category 9: Downstream transport
9.2%
0.40
0.37
Category 10: Processing of sold products
0.3%
262.16
261.46
Category 11: Use of sold products
—
—
—
Category 12: End of life treatment of sold products
—
—
—
Category 13: Downstream leased assets
0%
0.002
—
Category 14: Franchises
0%
0
0
Category 15: Investments
—
—
—
Total Group Scope 3 emissions
0.6%
269.31
267.61
A dash (-) indicates where data is not reported.
At 269.31mtCO2-e, our Scope 3 emissions in FY24 were 0.6 per cent higher than in FY23, primarily driven by increases in
steelmaking and shipping emissions.
Steelmaking accounted for 97 per cent of our Scope 3 emissions in FY24. Our overall volume of iron ore shipped remained
stable at 191.6Mt. Changes to product mix and customer base led to a 0.3 per cent increase in processing of sold products
(Scope 3 category 10).
The 18.7 per cent increase in combined Scope 3 categories 4 and 9 emissions was driven by the update of emissions
factors in the Global Logistics Emissions Council Framework v3.0 and reflects an accounting-driven variance. Emissions for
FY23 and earlier have not been re-assessed or restated this year, although this is planned to ensure that we are accurately
monitoring progress against a like-for-like baseline.
Detailed information on methodology can be found in the FY24 Emissions Calculation Methodology located on our website
at fortescue.com.
Scope 2
Scope 1
Emissions (tCO₂-e)
Christmas
Creek
Solomon
Solomon
Power
Station
Cloudbreak
Shipping
Rail
Port
Eliwana
Iron
Bridge
Others
outside
Metals
Australia
Others
within
Metals
Australia
600,000
400,000
200,000
0
FY24 Group Operational Emissions
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Unit
FY24
FY23
FY22
FY21 baseline
Iron ore shipped
wmt
191.6
192.0
188.7
185.9
Total Shipping emissions
(combined Scope 1 and 3
emissions related to shipping)
mtCO2-e
3.62
3.04
3.47
3.28
Shipping emissions intensity
tCO2-e/
wmt of ore
shipped
0.019
0.016
0.018
0.018
Scope 3 Steelmaking
emissions
mtCO2-e
262.16
261.46
250.37
242.83
Scope 3 Steelmaking
emissions intensity
tCO2-e/
wmt of ore
shipped
1.37
1.36
1.33
1.31
Note that FY24 shipping emissions are not comparable to those of previous years due to the change in emissions factors as
mentioned previously.
Purchased goods and services
Fuel and energy related
Waste
Employee commuting
Capital goods
Upstream transport
Business travel
Upstream leased assets
Downstream transport
Processing of sold products
CO2-e (million tonnes)
8
7
6
5
4
3
2
1
0
Purchased goods and services
Fuel and energy related
Waste
Employee commuting
Capital goods
Upstream transport
Business travel
Upstream leased assets
Downstream transport
Group Scope 3 Emissions
Progress against our Shipping and Steelmaking intensity targets
Fortescue has set shipping and steelmaking physical intensity emission targets. Annual progress against these targets is
present in the table below:
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Climate-related
executive
remuneration
Our CEOs, executives and other senior leaders participate
in the Executive and Senior Staff Incentive Plan (ESSIP) and
Long-Term Incentive Plan (LTIP). All other eligible employees
participate in the short-term Staff Incentive Plan (SIP).
Targets related to emission reductions have existed in the
LTIP since FY21. Following a review at the end of FY23,
changes were made by the Remuneration and People
Committee for FY24 to incorporate into all short-term
incentive plans to continue to drive the link between variable
remuneration and our Decarbonisation Program for all
employees across our business.
In FY24, Decarbonisation related KPIs sit in both the Metals
and Energy scorecards and make up 10 to 20 per cent of the
overall short-term incentive opportunity. Targets include
the delivery of FY24 milestones against the integrated
decarbonisation schedule and budget, and a reduction in
emissions. The scorecard for the Energy business also has
an additional 30 per cent related to the development and
commercialisation of projects and products that support
decarbonisation more broadly. Fortescue’s on-foot LTIP
includes a number of strategic measures that support
climate related action, including the development of
Fortescue’s green fleet and stationary power infrastructure,
green metal, and growth of the Energy business. These
targets typically account for approximately one-third of the
total strategic measures component of the LTIP.
Details of the remuneration policies for all employees and
the remuneration paid to directors (executive and non-
executive) and executives are set out in the Remuneration
Report.
Carbon Credits
In 2023, Fortescue ceased purchasing voluntary carbon
offsets for Scope 1 and 2 emissions, instead focusing our
efforts on the elimination of emissions. Carbon offsets
against Scope 1 and 2 emissions are purchased and
relinquished only to the extent required by legislation. Our
participation in compliance markets is therefore limited to
purchases required only to the extent of law, tapering in line
with facility-level decarbonisation plans. Accordingly, we
note that:
1. Australian Carbon Credit Units (ACCUs) are used to meet
regulatory requirements under the National Greenhouse
and Energy Reporting (Safeguard Mechanism) Rule 2015
(SGM) requirements.
2. In FY24 Fortescue is expected to be in excess of SGM
baselines by approximately 120,000tCO2-e, requiring
an equivalent number of ACCUs to be acquired and
surrendered to the Australian Government.
3. Fortescue is investigating using methods available under
the SGM, including multi-year monitoring periods, to
reduce the number of ACCUs required at facilities with
advanced decarbonisation plans.
4. The ACCUs that Fortescue is required to acquit FY24
SGM exceedances are produced by third parties under
the Australian Government’s approved methodologies,
and acquired through a third party broker. The underlying
carbon credits are from nature-based carbon removal
projects.
climate change
report
FORTESCUE FY24 ANNUAL REPORT | 99
Operating and
financial review
Ore Reserves and
Mineral Resources
Our approach
to sustainability
Directors’ report
| Remuneration
Report
Financial report
Corporate
governance
Corporate
directory
Overview
Capital
expenditure,
financing and
investment
Capital investment allocation
In September 2022, Fortescue’s Board approved capital
expenditure of US$6.2 billion for decarbonisation of our
iron ore operations by 2030. Aligned with our approach to
decarbonisation, we have allocated the investment towards
green energy and green mining fleet.
In FY24, the committed decarbonisation capital was
US$224 million. Fortescue’s forecast capital expenditure
guidance for decarbonisation in FY25 is US$700 - US$900
million. The estimated capital required to complete our
decarbonisation program is updated as our studies and
engineering design work progresses, as new information
is received from the market and as our projects progress.
Updates are reported up to our Decarbonisation Steering
Committee and our Board, and the decarbonisation capital
requirements are considered in the context of the Group’s
capital allocation framework and funding strategy.
Each separable project which forms part of the overall
decarbonisation program will be taken to the Board for
Final Investment Decision to approve capital for that
project. As we determine the optimal technical solutions to
eliminate the last approximately 10 per cent of emissions,
the incremental capital and operating costs over and above
our ‘business as usual’ expectations will be outlined to our
Decarbonisation Steering Committee before a decision is
made on the preferred solution.
As we mature our understanding of the financial impact
of climate-related risks and opportunities, we are also
developing systems and processes to track all climate-
related spending. When combining our decarbonisation
expenditure with our broader ambition towards a greener
energy future, we have invested more than 11 per cent
of our total FY24 spend (including capital and operating
expenditure on our Decarbonisation, Energy and Green
Metal projects).
Sustainability Financing
Framework
Fortescue remains committed to sustainability in all
aspects of our business. Part of our capital structure is our
Sustainability Financing Framework, which enables the
issuance of Green Bonds or Loans.
The Framework outlines eligible green projects including
renewable energy, green hydrogen and ammonia,
sustainable water management and socio-economic
advancement and empowerment initiatives. It also outlines
a range of impact indicators that will be used for impact
reporting for the use of proceeds.
This Framework was used in our inaugural Green Bond
in April 2022 for US$800 million. Allocation reporting is
provided in the Operating and Financial Review section of
this report.
climate change Report
FORTESCUE FY24 ANNUAL REPORT | 100
Exposure
to climate-
related risks
Physical risk exposure
As part of our commitment to enhance the resilience of
our assets and to mitigate climate-related risks, we have
partnered with our insurance partners to better understand
our climate-related hazard exposure of our critical assets
in Australia. Asset vulnerability to extreme climate events
such as flood, wind and fire was considered combined with
site-specific factors such as construction design, location
of the asset and risk mitigation actions. By leveraging our
insurance partner’s expertise in risk management and
insurance, we aim to develop targeted strategies to protect
our infrastructure and ensure operational continuity. At the
time of this report, 11 designated sites have been assessed,
including our operating mines in the Pilbara, together with
Perth Head Office, Gladstone GEM Centre, Herb Elliott
Port and associated Port Hedland facilities. Combined, this
represents a total area of 38,920 ha, of which 71 per cent
(27,514 ha) was assessed as being exposed to one or more
peril.
Exposure to risk of stranded
assets by 2030
There is ongoing work to consider the financial implications
arising from climate-related risks related to changes in the
useful life of assets, residual values and changes in the fair
valuation of assets as a result of our energy transition. We
can reasonably expect that finalising this work will result in
an impact on:
• financial estimates and matters of judgement
• provisions for potential liabilities
• expenses.
climate change
report
FORTESCUE FY24 ANNUAL REPORT | 101
Operating and
financial review
Ore Reserves and
Mineral Resources
Our approach
to sustainability
Directors’ report
| Remuneration
Report
Financial report
Corporate
governance
Corporate
directory
Overview
NAVIGATIONAL INDEX
This navigational index references the location of TCFD-aligned disclosures.
TCFD RECOMMENDATION
DISCLOSURE
LOCATION
Governance – Disclose the organisation’s governance around climate change-related risks and opportunities.
a) Describe the board’s oversight of climate-related risks and
opportunities.
Governance
Pages 88-89
b) Describe management’s role in assessing and managing
climate-related risks and opportunities.
Governance
Pages 90-92
Strategy - Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s
businesses, strategy and financial planning where such information is material.
a) Describe the climate-related risks and opportunities the
organisation has identified over the short, medium, and long-term. Climate-related Risks
Pages 80-87
b) Describe the impact of climate-related risks and opportunities
on the organisation’s businesses, strategy, and financial planning.
Our Strategy
Pages 70-79
c) Describe the resilience of the organisation’s strategy, taking into
consideration different climate-related scenarios, including a 2°C
or lower scenario.
Climate Resilience
Page 93
Risk management - Disclose how the organisation identifies, assesses, and manages climate-related risks.
a) Describe the organisation’s processes for identifying and
assessing climate-related risks.
Managing Risk
Pages 90-92
b) Describe the organisation’s processes for managing climate-
related risks.
Managing Risk
Pages 90-92
c) Describe how processes for identifying, assessing, and
managing climate-related risks are integrated into the
organisation’s overall risk management.
Managing Risk
Pages 90-92
Metrics and targets - Disclose the metrics and targets used to assess and manage relevant climate-related risks and
opportunities where such information is material.
a) Disclose the metrics used by the organisation to assess
climate-related risks and opportunities in line with its strategy and
risk management process.
Metrics
Pages 94-100
b) Disclose Scope 1, Scope 2 and if appropriate, Scope 3
greenhouse gas (GHG) emissions, and the related risks.
Metrics
Pages 94-97
c) Describe the targets used by the organisation to manage
climate-related risks and opportunities and performance against
targets.
Our Targets
Pages 68-69
Directors’ report
FORTESCUE FY24 ANNUAL REPORT | 102
DIRECTORS’
REPORT
Directors’ report
| Remuneration
Report
FORTESCUE FY24 ANNUAL REPORT | 103
Operating and
financial review
Ore Reserves and
Mineral Resources
Our approach
to sustainability
climate change
report
Corporate
governance
Corporate
directory
Overview
Financial report
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 10 to 16.
The Directors’ meetings, including meetings of the Company’s Board of Directors and of each Board committee held
during the year ended 30 June 2024 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 5205G(1) of the Corporations Act 2001, at the date of
this report are as follows:
Director
Ordinary shares
Share rights
Dr Andrew Forrest AO
1,131,365,000
–
Mark Barnaba AM CitWA
40,300
–
Elizabeth Gaines
341,294
51,464
Lord Sebastian Coe CH, KBE
10,000
–
Penny Bingham-Hall
62,357
–
Dr Jean Baderschneider
138,000
–
Yifei Li
–
–
Dr Larry Marshall (appointed 28 August 2023)
2,000
–
Usha Rao-Monari (appointed 24 January 2024)
–
–
Noel Pearson (appointed 1 August 2024)
–
–
¹FY24 Corporate Governance Statement is available on Fortescue’s website at fortescue.com
The remuneration of Directors and Key Management Personnel are detailed in the Remuneration Report on pages 106
to 149.
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 a highly profitable green technology, energy and metals company, with a laser focus
on being a Real Zero 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 2 to 26, Operating and Financial Review on pages 27 to 43 and Corporate Governance
Statement¹ section 4 Risk Management.
¹FY24 Corporate Governance Statement is available on Fortescue’s website at fortescue.com
DIRECTORS’
REPORT
AT 30 JUNE 2024
Directors’ report
FORTESCUE FY24 ANNUAL REPORT | 104
DIVIDENDS
2024
Profit
US$m
Underlying net profit after tax
5,664
Underlying net profit after tax attributable to equity holders
5,683
Declared and paid during the year:
A$ cents
Final ordinary dividend for the year ended 30 June 2023 – paid in September 2023
100
Interim ordinary dividend for the year ended 30 June 2024 – paid in March 2024
108
Total – declared and paid during the year
208
Declared since the end of the financial year:
Final ordinary dividend for the year ended 30 June 2024 – to be paid in September 2024
89
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 are presented in Fortescue’s
FY24 Sustainability Report² and compliance
with Fortescue’s conditions of approval under
environmental legislation is reported to the relevant
regulators in line with the requirements of each Act.
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 FY24 Climate Change Report on pages
65 to 101 of this report.
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 2024 as a result of the exercise of options.
Company Secretary
Assistant Company Secretary Navdeep (Mona) Gill
was appointed as Company Secretary of Fortescue on
17 July 2024, replacing Cameron Wilson who retired
effective 30 June 2024 and Phil McKeiver who held
the role previously from 29 November 2023. Details of
Mona Gill’s qualifications and experience are set out
on page 16 of this report.
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.
DIRECTORS’ REPORT
At 30 June 2024
²FY24 Sustainability Report is available on Fortescue’s website at fortescue.com
Directors’ report
| Remuneration
Report
FORTESCUE FY24 ANNUAL REPORT | 105
Operating and
financial review
Ore Reserves and
Mineral Resources
Our approach
to sustainability
climate change
report
Corporate
governance
Corporate
directory
Overview
Financial report
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,
Finance and Risk Management 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,
Finance and Risk Management 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.
The auditor’s independence declaration, as required
under section 307C of the Corporations Act 2001, is set
out on page 218 and forms part of this report.
Future developments
The Overview section set out on pages 2 to 26 and the
Operating and Financial Review section set out on pages
27 to 43 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.
DIRECTORS’ REPORT
At 30 June 2024
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 2024, the Directors declared a final
dividend of 89 Australian cents per ordinary share
payable in September 2024.
This report has been made in accordance with a
resolution of the Directors.
Dr Andrew Forrest AO
Executive Chairman
Dated in Perth this 28th day of August 2024.
Directors’ report
FORTESCUE FY24 ANNUAL REPORT | 106
1. Introduction and FY24 Key Management Personnel
110
2. Remuneration snapshot
111
3. Response to first strike
114
4. Business performance
116
5. Remuneration outcomes
120
6. Incentive plan operation
132
7. Executive contract terms
139
8. Non-Executive Director Remuneration
140
9. Remuneration governance
141
10. Statutory disclosures
142
REMUNERATION
REPORT
Directors’ report
| Remuneration
Report
FORTESCUE FY24 ANNUAL REPORT | 107
Operating and
financial review
Ore Reserves and
Mineral Resources
Our approach
to sustainability
climate change
report
Corporate
governance
Corporate
directory
Overview
Financial report
FROM THE PEOPLE,
REMUNERATION
AND NOMINATION
COMMITTEE CHAIR
Dear Shareholders,
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 2024 (FY24).
FY24 Fortescue performance
FY24 was another year of strong operational and financial
performance for Fortescue, while maintaining our
unwavering focus on safety. Significant milestones were
achieved across both Metals and Energy, aligned with
delivering on our vision and strategy.
Our group wide safety performance continued to improve,
with Metals achieving its lowest ever Total Recordable Injury
Frequency Rate (TRIFR), far exceeding the stretch target set
by the business.
Fortescue’s strong operating performance and capital and
cost discipline contributed to outstanding financial results
in FY24. Our net profit after tax of US$5.7 billion represented
the third highest earnings in Fortescue’s history. At the same
time, our balance sheet remains strong, meaning we are well
positioned to continue to invest in growth opportunities.
Iron ore shipments achieved the second highest volume
in our Company’s history which was an outstanding effort
given the challenges the team had to overcome, including an
ore car derailment and significant weather disruptions. We
responded to the challenges and implemented a recovery
plan which led to record shipments in the June quarter. This
was a real demonstration of our Values in action and meant
that Fortescue was still able to exceed its stretch target for
hematite shipments, resulting in a partial achievement of our
production targets. Fortescue’s continued drive for efficiency
and productivity contributed to strong cost management
and resulted in partial achievement of Fortescue’s stretch
target for hematite C1 cost.
Our new Iron Bridge mine transitioned to operational
production and achieved its first shipment of high grade
magnetite concentrate in early FY24. Commissioning
activities progressed with expenditure targets achieved and
continued focus on a safe and efficient ramp up. However C1
Cost and production targets were not achieved.
Good progress was made towards our decarbonisation
targets with the commissioning of three electric excavators
across our sites, the development of battery electric
and hydrogen fuel cell haul truck prototypes, and the
construction of a 100MW solar farm. Efforts to increase
energy efficiency across our sites resulted in a 10 per cent
reduction from our forecast CO2 emissions in FY24. This saw
us exceed our FY24 stretch targets for decarbonisation.
Our Energy business took the first green energy projects
to Final Investment Decision and turned soil on our Arizona
Hydrogen project in the United States. Work commenced
on our Gladstone PEM50 project in Queensland – a green
hydrogen project utilising Fortescue’s own electrolyser
technology. The Fortescue Board has also agreed to fast-
track two more projects, with Holmaneset in Norway and
Pecém in Brazil progressing to feasibility phase.
Through Fortescue Zero, we are creating the solutions
required to drive a zero emissions future by developing a
range of technologies that can be used across a variety of
applications and industries. Sales contracts were executed
with new and existing customers for battery packs, battery
management systems and battery intelligence software.
Fortescue Zero also saw the first sales contracts for
electrolysers signed, shortly after we opened our Gladstone
Electrolyser Manufacturing Centre.
Fortescue is committed to diversity and inclusion in the
workplace, with steady growth achieved in both female and
First Nations Australians participation. Diversity targets
were partially achieved across both Metals and Energy.
Whilst overall voluntary employee turnover remains low
at approximately eight per cent, we had a higher level of
executive turnover and employee engagement targets were
not achieved in FY24. Diversity, inclusion and engagement
remain a key priority for the Board in FY25.
Directors’ report
FORTESCUE FY24 ANNUAL REPORT | 108
Key Management Personnel
(KMP) Changes
In FY24 our management team has come together as ‘One
Fortescue’. This has seen further evolution of the operating
model and some changes to senior leadership to ensure
operations are streamlined and our values driven culture is
fostered across the business.
In August 2023, we announced the appointment of Dino
Otranto to the role of Chief Executive Officer (CEO),
Fortescue Metals. Mr Otranto joined Fortescue in 2021 as
Chief Operating Officer, Iron Ore and quickly established
himself as an integral member of the Fortescue family.
Dino’s appointment reflects our commitment to developing
and promoting internal talent. His role sits alongside Mark
Hutchinson as CEO, Fortescue Energy, with both reporting
directly to the Board.
In October 2023, Shelley Robertson joined Fortescue in the
role of Chief Corporate Officer (CCO). She has a significant
portfolio which brings together a number of core business
functions that sit across both the Metals and Energy
businesses. In July 2024 we announced that Ms Robertson
had been appointed to the role of Chief Operating Officer.
As the One Fortescue approach continues to evolve, we
have reestablished a Group Chief Financial Officer (CFO)
role which is responsible for both the Metals and Energy
businesses. Apple Paget was initially appointed to this
role on an acting basis, and in July 2024 we were pleased
to announce her appointment to this role on a permanent
basis.
During the year we appointed two new independent non
executive directors to the Board. Dr Larry Marshall, former
CEO of CSIRO, is a technology innovator, business leader,
published author and a Male Champion of Change with
a wealth of experience in creating new value and impact
through innovation. Usha Rao-Monari is an experienced
international executive and director with finance,
infrastructure investment and environmental expertise,
especially in the area of water.
In August 2024 we announced the appointment of Noel
Pearson to the Fortescue Board as a non executive director.
Mr Pearson is a prominent Australian indigenous leader,
social advocate and lawyer.
FY24 Remuneration framework
and outcomes
Fortescue’s 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 and rewarding for performance.
When assessing outcomes, the Board maintains a holistic
view of performance. 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 below.
FY24 Fixed remuneration changes
Fortescue positions fixed remuneration for executives with
reference to the median of S&P/ASX50 Index and ASX-listed
resources peer groups.
On taking up the role of Chief Executive Officer, Fortescue
Metals, Mr Otranto’s total fixed remuneration (TFR) was
set at A$1,400,000. This was subsequently reviewed and
increased to A$1,750,000 with effect from January 2024
based on market benchmarking and the Board’s assessment
of his performance in the role.
Ms Robertson’s total fixed remuneration on appointment was
set at A$725,000 with reference to external benchmarks.
Ms Paget has been provided with a higher duties allowance
with her total fixed remuneration set at A$840,000 to
recognise the additional responsibilities associated with
taking on the Group Chief Financial Officer role in an acting
capacity.
In line with other executives, a four per cent increase was
applied to CEO, Fortescue Energy Mr Hutchinson’s TFR
effective 1 July 2023 bringing his TFR to A$2,080,000.
Further detail regarding these changes is outlined in
section 5.
Directors’ report
| Remuneration
Report
FORTESCUE FY24 ANNUAL REPORT | 109
Operating and
financial review
Ore Reserves and
Mineral Resources
Our approach
to sustainability
climate change
report
Corporate
governance
Corporate
directory
Overview
Financial report
FY24 Executive and Senior Staff Incentive
Plan (ESSIP) outcomes
The Board set stretch targets for the FY24 ESSIP to drive
outperformance in business operations and financial
performance, aimed at maximising shareholder value.
FY24 ESSIP performance conditions included operational
production, cost and decarbonisation targets, delivery of
projects and products, people and culture measures, and
individual Key Performance Indicators. Overall, the FY24
ESSIP outcomes for the CEOs and other KMP ranged from
50 per cent to 79 per cent of target.
Section 5 of the Report provides further detail regarding the
targets and their achievement.
FY22 Long Term Incentive Plan (LTIP)
outcomes
Vesting of the FY22 LTIP is assessed over a three year
performance period from 1 July 2021 to 30 June 2024. FY22
was the first year in which we assessed outcomes based on
separate scorecards for our Metals and Energy businesses.
The Metals scorecard consisted of Return on Equity (ROE),
relative Total Shareholder Return (TSR), and Strategic
Measures aligned with the Company’s long-term objectives.
Performance conditions were tested and vested at 81.3 per
cent based on TSR and ROE performance and progress
against strategic measures that are critical to our future
success.
The Energy scorecard consisted of Total Shareholder Return
(TSR), an independent valuation metric, and Strategic
Measures aligned with the Company’s long-term objectives.
The performance conditions were tested and vested at 30
per cent.
FY24 LTIP scorecard
To further support the evolution of the One Fortescue
operating model, and to simplify and align all executives
to a single long term vision, the LTIP has transitioned from
separate scorecards for our Metals and Energy businesses
to one single Fortescue scorecard for FY24 onwards. Further
information relating to the FY24 LTIP is set out in section 6.
Response to first strike and
FY25 remuneration changes
Following the first strike that Fortescue received against the
FY23 Remuneration Report at its Annual General Meeting
(AGM), the Board has listened to this feedback and has been
proactively engaging with proxy advisors and investors to
address the key areas of concern.
A detailed response to the feedback is outlined in section
3 of this report, but in summary, the following changes to
our remuneration framework will be, or have already been,
implemented:
• whilst the Board retains its ability to apply discretion
to incentive outcomes, it will not make discretionary
payments that do not clearly align with shareholder
interests, noting that no special recognition awards were
made in FY24
• introduction of a mandatory ESSIP deferral for KMP of
50 per cent across two years from the FY25 ESSIP grant
onwards
• increased weighting to relative TSR and reduced
weighting to Strategic Measures for the LTIP
• improved disclosure of Strategic Measures for all on-foot
LTIP grants (FY22, FY23 and FY24) and
• shareholder approval for participation of the CEOs in the
Performance Rights Plan at the 2024 AGM.
The evolution of our One Fortescue approach will remain
a priority for all leaders across Fortescue in FY25. A
key element of this will be ensuring we create the right
environment so that all our people can thrive and achieve
true collaboration, innovation and success. To support
this, we will have one consolidated ESSIP scorecard across
Metals and Energy in FY25.
The Board is committed to actively engaging with
shareholders to understand concerns and effectively
communicating Fortescue’s remuneration and governance
framework.
I invite you to read our Report and trust you will find
that it outlines the links between our strategy, culture,
performance and remuneration outcomes.
On behalf of the directors, we look forward to welcoming you
and receiving your feedback at our 2024 AGM.
Yours sincerely,
Penny Bingham Hall
People, Remuneration and Nomination Committee Chair
Directors’ report
FORTESCUE FY24 ANNUAL REPORT | 110
1. INTRODUCTION AND
FY24 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 FY24 were:
Name
Position
Time as KMP
Non-Executive Directors
Mark Barnaba AM
Deputy Chair and Lead Independent Director¹
Full year
Dr Jean Baderschneider
Non-Executive Director
Full year
Penny Bingham-Hall
Non-Executive Director
Full year
Lord Sebastian Coe CH, KBE
Non-Executive Director
Full year
Yifei Li
Non-Executive Director
Full year
Dr Larry Marshall
Non-Executive Director
Part year from 29 August 2023
Usha Rao-Monari
Non-Executive Director
Part year from 24 January 2024
Executive Directors
Dr Andrew Forrest AO
Executive Chairman
Full year
Elizabeth Gaines
Executive Director and Global Ambassador
Full year
Other Key Management Personnel (Executives)
Dino Otranto
Fortescue Metals Chief Executive Officer²
Full year
Mark Hutchinson
Fortescue Energy Chief Executive Officer
Full year
Apple Paget
Acting Group Chief Financial Officer³
Part year from 1 September 2023
Shelley Robertson
Chief Corporate Officer⁴
Part year from 1 October 2023
Fiona Hick
Fortescue Metals Chief Executive Officer⁵
Part year to 28 August 2023
Christine Morris
Fortescue Metals Chief Financial Officer
Part year to 31 August 2023
¹ Dr Larry Marshall will be appointed as Lead Independent Director, effective from the Company’s AGM. Mark Barnaba will continue as Non-Executive
Director and Deputy Chair.
² Dino Otranto was appointed as Fortescue Metals CEO on 28 August 2023. Prior to this, Dino served as Chief Operating Officer Iron Ore, a role which is
also considered KMP.
³ Apple Paget was appointed to the role of Fortescue Metals CFO on an acting basis from 1 September 2023. Apple was subsequently appointed to
the role of Group CFO on an acting basis with effect from 21 February 2024. In July 2024, Apple was appointed to the Group CFO role on a permanent
basis.
⁴ In July 2024 it was announced that Shelley Robertson had been appointed as Chief Operating Officer.
⁵ Fiona Hick resigned as Fortescue Metals CEO with her last day of employment being 28 February 2024. Ms Hick remained employed by the company
during her six month notice period.
In early FY24, Fortescue implemented a Group CFO model moving away from separate CFOs for the Metals and Energy business units. As a result,
Deborah Caudle was deemed to not have acted as KMP during FY24.
In August 2024 it was announced that Noel Pearson had been appointed to the Fortescue Board as a non-executive director.
There have been no other changes to KMP after the reporting date.
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2. REMUNERATION SNAPSHOT
Remuneration strategy principles
Attract, retain, and motivate
employees by providing
market competitive fixed
remuneration and incentives
Build a high performance
oriented culture that
supports the achievement
of our strategic vision
OUR VALUES DRIVE OUR REWARD STRATEGY, WHICH SEEKS TO:
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.
Family
Empowerment
Frugality
Stretch Targets
Integrity
Enthusiasm
Safety
Courage and
Determination
Generating
Ideas
Humility
OUR
VALUES
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FORTESCUE FY24 ANNUAL REPORT | 112
FY24 REMUNERATION FRAMEWORK
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)
Executive and Senior Staff
Incentive Plan (ESSIP)
Long Term Incentive Plan
(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
Link to
Values and
remuneration
strategy
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
• Participants can elect to receive
up to 100% of the award in share
rights
• Performance is assessed
against a balanced scorecard
• Targets set at stretch levels to
promote outperformance
• 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
FY24
Approach:
Fortescue
Metals
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
Operations (60%) – Safety, cost,
production, cashflow and revenue
People and culture (20%)
Individual KPIs (20%)
For FY24 a single LTIP scorecard was
applied across both the Metals and Energy
businesses
Performance measure breakdown
Total Shareholder Return (33%)
Return on Equity (33%)
Key strategic measures (34%)
FY24
Approach:
Fortescue
Energy
Performance measure breakdown
Business outcomes (60%) – Safety,
projects, commercialisation, cost and
decarbonisation
People and culture (20%)
Individual KPIs (20%)
MINIMUM SHAREHOLDING REQUIREMENT
CEO: 200% of TFR, CEO direct reports: 100% of TFR, NEDs: 100% of annual base fee
¹All 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, which includes the Minimum Shareholding Requirement.
2Awards under the LTIP are subject to the Maximum Value Limit.
Component
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
Year 1
Year 2
Year 3
Base salary, superannuation
and benefits
TFR
ESSIP¹
Minimum 50% awarded in
Performance Rights, with the
balance awarded in cash
LTIP1,2
Awarded in Performance Rights
FY24 ESSIP
FY24 LTIP (three year performance period)
The framework visualised
The following diagram sets out the remuneration structure and the delivery timing for the CEOs and other KMP.
FY22 LTIP vesting outcomes – Metals
Measure
Weighting
%
Result
Vesting
%
TSR
33
62.5th percentile
11.3
ROE
33
34.0
46.2
Strategic measures
34
8 out of 15
23.8
Total
81.3
FY22 LTIP vesting outcomes – Energy
Measure
Weighting
%
Result
Vesting
%
TSR
33
62.5th percentile
11.3
Independent valuation
33
Not achieved
0.0
Strategic measures
34
7 out of 15
18.7
Total
30.0
Share price over the last 3 years (A$/share)
Jul 21
Jan 22
Jul 22
Jan 23
Jul 23
Jan 24
Jul 24
0
5
10
15
20
25
30
A$
35
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.
As the vesting price of A$22.0159 is
below the grant price of A$23.576,
the Maximum Value Limit is not
applicable for the FY22 LTIP.
FY24 Remuneration Outcomes
FY24 ESSIP vesting outcomes – Metals
FY24 Metals ESSIP awards reflect achievement of:
• Operating and financial performance
• Consistent, strong safety performance
• Good progress against decarbonisation objectives
• Partial achievement of People & Culture objectives
PERFORMANCE
OUTCOMES
Operations
People and culture
Individual KPIs
Assessed individually
FY24 ESSIP vesting outcomes – Energy
PERFORMANCE
OUTCOMES
Business outcomes
People and culture
Individual KPIs
Assessed individually
FY24 Energy ESSIP awards reflect achievement of:
• Operating and financial performance
• Partial achievement of projects to FID
• Commercialisation of Energy products to new customers
• Partial achievement of People & Culture objectives
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Remuneration mix
The chart below shows the remuneration mix for superior performance where stretch targets have been met for the CEOs of
Fortescue Metals and Fortescue Energy and the Chief Corporate Officer and the acting Chief Financial Officer (other KMP).
TFR %
ESSIP (at risk)
LTIP (at risk)
Total at risk
CEOs
0%
72%
50%
100%
Other KMP
28%
31%
41%
36%
27%
37%
64%
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FORTESCUE FY24 ANNUAL REPORT | 114
3. RESPONSE TO FIRST STRIKE
Following the first strike against the remuneration report in 2023, the table below sets out below a summary of the key
concerns raised and Fortescue’s response to them.
Area of feedback
Response
The use of discretionary
payments
The Board has heard this feedback and whilst it retains the ability to apply discretion to
incentive outcomes, it will not make discretionary payments that do not clearly align with
shareholder interests.
The use of Board
discretion in Short Term
Incentive (STI)
outcomes
For the FY23 ESSIP, the previous cliff vesting approach was replaced with a sliding scale
that was used to assess outcomes between threshold and stretch levels of performance.
This change improves transparency and clarity of outcomes and reduces the need for Board
discretion when compared to a cliff vesting approach. Board discretion was not applied to any
of the FY23 STI outcomes. Some downward discretion to KMP STI outcomes was applied in
FY24.
“Doubling up” of
CEO and CFO
remuneration
The two CEO model is deemed the appropriate structure to deliver the Company’s vision
and strategy given the scale of the opportunity and the challenges to manage. The Board is
comfortable that remuneration is appropriately benchmarked.
As the One Fortescue model continues to mature, we have moved to a single Group CFO.
Disclosure of
CEO Metals
remuneration
Due to the timing of the appointment to CEO being the same day as the publishing of the
Annual Report, inclusion of Dino Otranto’s remuneration in the report was not possible. Full
disclosure of Dino Otranto’s remuneration is contained in this report.
Director fees
Mark Barnaba’s remuneration will be updated in FY25 to reflect the removal of fees associated
with Lead Independent Director responsibilities.
Elizabeth Gaines’ remuneration has been updated to reflect a reduction in time commitment
as an Executive Director and Global Ambassador Fortescue. Elizabeth Gaines’s annual
remuneration from 1 May 2024 is A$500,000 (with no incentive opportunity or travel
allowance).
Board independence
given tenure of
some directors
Two new independent NEDs were appointed to the Board in FY24 – Dr Larry Marshall (August
2023) and Usha Rao-Monari (January 2024). An additional independent NED, Noel Pearson,
was appointed at the start of FY25 (August 2024).
Dr Larry Marshall will be appointed as Lead Independent Director, effective from the
Company’s AGM. Mark Barnaba will continue as Non-Executive Director and Deputy Chair.
Board governance
Fortescue acknowledges that strong corporate governance is critical to the long-term,
sustainable success of the Company and is the collective responsibility of the Board of
Directors and all levels of management.
Fortescue has a talented, diverse and international Board committed to enhancing and
protecting the interests of shareholders and other key stakeholders.
Board committees have recently been reviewed and re-structured to provide appropriate
focus on Risk, Safety, Sustainability and our Climate Transition Plan, as well as to ensure that
all committees are made up of independent NEDs.
With effect from 1 July 2024, the Board committees are as follows:
Audit, Finance and Risk Management
People, Remuneration and Nomination
Safety and Sustainability
Performance rights grant
approval for CEOs was not
included in the AGM
Whilst not technically required as the CEOs are not directors of the company, the practice of
seeking approval for CEO performance rights grants will be re-introduced for the FY25 grant
at the 2024 AGM.
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Area of feedback
Response
Use and
disclosure
of LTI strategic
objectives
Strategic objectives in the LTI drive a focus on the key projects and initiatives that deliver
long-term value creation and have been specifically designed to ensure they do not overlap
with the more operational-focused individual KPIs in the STI scorecard.
Responding to feedback for improved disclosure, enhanced disclosure of the Strategic
Measures for all ‘on-foot’ LTIP grants (FY22, FY23, and FY24) has been included in the
Remuneration Report.
Also, in response to feedback, strategic objectives will reduce to 30 per cent, and relative TSR
will increase to 70 per cent to increase the link between executive reward and shareholder
experience. ROE will be removed from the FY25 LTIP scorecard.
Ability to achieve stretch
outcomes against
individual measures in
the LTI
A review of the company’s remuneration framework is underway for FY25. This review will
look at the remuneration mix (fixed vs variable), the measures and targets (threshold, target,
stretch), and associated vesting outcomes.
The vesting schedule for the FY25 LTIP will be simplified and the ability to achieve stretch
against measures within the LTI will be removed (i.e. preventing one KPI outcome offsetting
poor individual performance of another).
The 150 per cent Maximum Value Cap which exists to prevent unintended windfall gains from
rapid share price appreciation will remain a feature of the LTIP going forward.
FY23 STI outcomes
appeared to be
misaligned to financial
performance
Fortescue met or exceeded financial and operational targets in FY23. Record iron ore
shipments and strong underlying EBITDA and NPAT performance were reflected in Total
Shareholder Returns of 41 per cent over the year including total dividends of A$1.75 per share.
No discretion was used in assessing the outcomes of the FY23 STI.
Use of strategic objectives
in STI raises concern of
duplication
The STI scorecard includes Operations (weighted 60 per cent), People & Culture (weighted 20
per cent) and individual, role specific KPIs (weighted 20 per cent).
This structure ensures executives are rewarded not just for what is achieved, but also how it is
achieved in line with our Values of a diverse, inclusive and engaging workplace.
There is no duplication between the individual KPIs in the STI and the strategic measures in
the LTI.
STI rights grant at
the beginning of the
performance period
We acknowledge the approach may be unique compared to our peers. However, the Board
feel this approach provides better alignment between Executive remuneration outcomes and
shareholder interests as executives share in any upside or downside over the performance
period.
Lack of STI deferral
Fortescue’s STI has a mandatory minimum amount of 50 per cent that must be taken in share
rights, with the option to elect up to 100 per cent in shares.
A mandatory STI deferral of 50 per cent over two years (25 per cent in year one and 25 per
cent in year two) will be implemented for KMP from the FY25 ESSIP onwards.
Directors’ report
FORTESCUE FY24 ANNUAL REPORT | 116
4. BUSINESS PERFORMANCE
Underpinned by our unique culture and Values and a strong
focus on operating excellence and cost management,
Fortescue delivered another year of strong performance
across our stretch safety, production and financial targets.
Safety is a core priority and we achieved a TRIFR of
1.3 across Metals in FY24, representing a 28 per cent
improvement on the prior year. While this is an outstanding
and industry leading result that exceeded our stretch target
of 1.8, we remain unwavering in our aim to be a global leader
and focused on leading safety indicators as well as TRIFR.
Our iron ore shipments totalled 191.6Mt in FY24, which
is the second highest in the Company’s history. This was
an incredible effort given the challenges the team had to
overcome, including an ore car derailment on our main line
and some significant weather disruptions. The team moved
quickly to implement a recovery plan, and we achieved
record shipments in the June quarter. We also set new
records in railed tonnes, demonstrating the efficiencies
gained through our recovery plan. This record result meant
that Fortescue was still able to exceed its stretch target for
hematite shipments, resulting in a partial achievement of our
production targets.
Our Iron Bridge mine transitioned to operational production
and achieved its first shipment of high grade magnetite
concentrate in early FY24. While the performance of the raw
water pipeline impacted production and shipments during
the year, an innovative water management strategy has been
employed to increase plant uptime. This capital efficient
option may mitigate the need to replace the high-pressure
section of the raw water pipeline. Commissioning activities
continue to progress, with our focus on a safe and efficient
ramp up.
We remain focused on maintaining an industry leading cost
position and our Hematite C1 cost in FY24 of US$18.24/wmt
was in line with our market guidance. Our C1 cost continues
to be impacted by inflationary pressures, including diesel
prices and labour rates, as well as mine plan led cost
escalation. Our strong cost management resulted in partial
achievement of Fortescue’s stretch target for Hematite C1
cost and Magnetite expenditure.
Fortescue’s financial performance was underpinned by
its strong operating performance and customer demand,
together with capital and cost discipline. Underlying EBITDA
of US$10.7 billion was seven per cent higher than FY23
and the net profit after tax of US$5.7 billion was the second
highest in the Company’s history. This contributed to an
underlying return on equity (excluding Fortescue Energy
costs) of 31 per cent. Our Company’s balance sheet remains
strong, with a cash on hand of US$4.9 billion and net debt of
US$0.5 billion at 30 June 2024.
Reflecting an ongoing commitment to delivering
shareholder returns, the Board has declared a fully franked
final dividend of A$0.89 per share, bringing total dividends
declared for FY24 to A$1.97 per share. This represents a
payout ratio of 70 per cent of net profit after tax, in line with
the Company’s dividend policy to payout between 50 and
80 per cent of net profit after tax.
Progress on decarbonisation was evident right across the
business throughout FY24. This includes construction of a
100MW solar farm at North Star Junction, commissioning
of our gaseous and liquid hydrogen facility at Christmas
Creek and the changeout of 120 airfield lights to solar at
our aerodrome at Cloudbreak. We also deployed our first
electric excavators which are now operating across our
sites, together with the development of a battery electric
and hydrogen fuel cell haul truck prototypes. The focus on
increasing energy efficiency across our sites resulted in a
10 per cent decrease from our forecast CO2 emissions in
FY24, which saws saw us exceed our FY24 stretch targets for
decarbonisation.
In the Energy business, Fortescue took green energy
projects to final investment decision. We launched Arizona
Hydrogen, our green hydrogen plant in the United States,
and started work on Gladstone PEM50, a 50MW green
hydrogen project utilising Fortescue’s own electrolyser
technology. The Fortescue Board also agreed to fast-track
two more projects, enabling them to advance to feasibility
phase and commencement of the front end engineering
process. Holmaneset is a green ammonia project in Norway,
which has received backing and funding from the European
Union, and our Pecém Green Hydrogen Project in Brazil
advanced to feasibility phase, including commencement
of the front end engineering design process. In addition,
we have prospective projects being advanced in Oman,
Morocco, Jordan and Egypt. Progress on energy projects
resulted in a partial achievement of the stretch target.
In FY24, we also officially opened our Gladstone Electrolyser
Manufacturing Centre in Queensland and started selling our
electrolyser systems around the world. Through Fortescue
Zero, we are continuing to develop the solutions needed
to decarbonise industry. Sales contracts were executed
to new and existing customers for battery packs, battery
management systems and battery intelligence software.
As the technology, energy and metals group accelerating the
commercial decarbonisation of industry, rapidly, profitably
and globally, we remain firmly focused on delivering against
our growth strategy to the benefit of all our stakeholders.
1.3
SAFETY
US$4.9bn
CASH ON HAND
US$5.7bn
NET PROFIT
AFTER TAX
The following graphs show our Group performance against key financial measures in FY24:
Revenue
US$m
Free cash flow
US$m
FORTESCUE METALS TOTAL
RECORDABLE INJURY
FREQUENCY RATE
DIVERSITY
24.5%
FEMALE
US$/wmt
C1 Cost
Shipments
wmt
US$18.24/wmt
C1 COST
HEMATITE
191.6Mt
SHIPMENTS
TOTAL SHIPMENTS
18.24
FY24
13.93
FY20
FY21
15.91
FY22
17.54
12.94
FY23
FY24
191.6
FY22
192.0
FY21
FY20
182.2
178.2
189.0
FY23
FY21
FY20
FY24
FY22
12,820
22,284
17,390
16,871
18,220
FY23
FY22
8,961
FY20
5,108
FY24
3,572
FY21
4,449
4,317
FY23
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The graphs below show Fortescue’s EBITDA vs ESSIP outcomes and relative TSR vs LTIP outcomes over the last five years.
The values for FY19, FY20, and FY21 LTIP vesting outcomes in the chart above reflect the application of the LTIP Maximum Value Limit which reduced
overall vesting due to the increase in the share price over the respective performance periods. The actual performance outcome for the FY19, FY20 and
FY21 LTIP was 100%.
Underlying EBITDA vs ESSIP outcomes
Average ESSIP award as a % of maximum opportunity for KMP
Average ESSIP award as a % of maximum opportunity for KMP
0%
40%
60%
80%
120%
20%
100%
8,000
6,000
4,000
2,000
Underlying EBITDA (US$m)
10,000
12,000
14,000
16,000
18,000
Underlying EBITDA
FY21
FY22
FY24
FY23
FY20
Metals LTIP vesting (%)
Vesting dates
Relative TSR vs LTIP outcomes
3 years to
30/06/22
(FY20 LTIP)
3 years to
30/06/21
(FY19 LTIP)
LTIP vesting outcomes (%)
0%
10%
40%
60%
70%
80%
100%
20%
30%
50%
90%
Relative TSR percentile ranking
3 years to
30/06/23
(FY21 LTIP)
Energy LTIP vesting (%)
3 years to
30/06/24
(FY22 LTIP)
3 years to
30/06/20
(FY18 LTIP)
Relative TSR percentile
0
20
10
30
40
50
60
70
80
90
100
Directors’ report
FORTESCUE FY24 ANNUAL REPORT | 118
a. Five year Group performance
Fortescue continues to deliver operational and financial improvements across the business. Our performance across key
financial measures for FY24 and the five years FY20 to FY24 inclusive are set out below.
US$5.7bn
NET PROFIT
AFTER TAX
US$10.7bn
UNDERLYING
EBITDA
A$1.97
per share
FY24 DIVIDENDS
31%2
UNDERLYING RETURN
ON EQUITY
2024
2023
2022
2021
2020
Total tonnes shipped (wmt)
191.6
192.0
189.0
182.2
178.2
Revenue (US$m)
18,220
16,871
17,390
22,284
12,820
Underlying EBITDA (US$m)
10,708
9,963
10,561
16,375
8,375
Net profit after tax (US$m)
5,664
4,796
6,197
10,295
4,735
Underlying net profit after tax (US$m)¹
5,664
5,522
6,197
10,349
4,746
Underlying return on equity (%)
31²
33²
382
67
40
Gearing (book value of debt/debt + equity) (%)
22
23
26
19
28
Dividends declared (A$ per share)
1.97
1.75
2.07
3.58
1.76
Share price at 30 June (A$)
21.41
22.18
17.53
23.34
13.85
Change in share price (A$)
(0.77)
4.65
(5.81)
9.49
4.83
Change in share price (%)
(3.5)
27
(25)
69
54
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 excludes Fortescue Energy costs.
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FORTESCUE FY24 ANNUAL REPORT | 120
5. REMUNERATION OUTCOMES
As reported in Section 4, Fortescue has again delivered strong, consistent results against the majority of our key targets for
FY24, underpinned by our Values based culture and the commitment of the entire Fortescue team.
a. FY24 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
% Increase
TFR A$
Executives
Elizabeth Gaines¹
N/A
500,000
Mark Hutchinson²
4
2,080,000
Dino Otranto³
36
1,750,000
Apple Paget⁴
37
840,000
Shelley Robertson⁵
N/A
725,000
Christine Morris⁶
N/A
1,150,000
Fiona Hick⁶
N/A
2,080,000
1 Effective 1 May 2024 Elizabeth Gaines’ remuneration has been updated to reflect a reduction in time commitment as an Executive Director and Global
Ambassador.
2 Mark Hutchinson’s remuneration was increased from 1 July 2023 as part of Fortescue’s broader annual salary review process.
3 Dino Otranto’s remuneration was increased to 1,339,000 effective 1 July 2023 relating to his role as Chief Operating Officer aligned with Fortescue’s broader
annual salary review process. On appointment to the role of Fortescue Metals CEO, Mr Otranto’s remuneration was increased to 1,400,000 effective 28
August 2023. This was subsequently reviewed and increased to 1,750,000 with effect from 1 January 2024 based on the Board’s assessment of performance
in role.
4 Apple Paget’s remuneration for acting in the role of Metals CFO was set at A$615,295 (which included a higher duties allowance of A$127,920). Effective
21 February 2024, her total fixed remuneration was increased to A$840,000 (including a higher duties allowance) to reflect commencement in the acting
position of Group CFO.
5 Shelley Robertson’s remuneration was set on commencement in October 2023.
⁶ Christine Morris and Fiona Hick did not receive an increase to their remuneration in FY24.
b. FY24 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.
Further details of the Fortescue Metals and Energy ESSIP approaches, scorecards and performance outcomes are included on
the following pages.
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Corporate
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Corporate
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Overview
Financial report
Measure
Weighting
Detail
Stretch
target
Assessed
outcome
Commentary
Operations – 60%
Safety1
10
TRIFR
≤1.8
Achieved
TRIFR of 1.3 achieved for Metals
business. Injury risk profile reduced
by 25.3% and fatality risk profile
reduced by 21.9%
Injury risk profile
20% reduction
Fatality risk profile
15% reduction
Fatality Hurdle applies
Production
10
Total hematite iron ore
shipped
Total magnetite iron
ore shipped
189.4Mt
7.4Mt
Partially
achieved
Hematite shipments of 190.4Mt
exceeded target
Magnetite shipments of 1.2Mt were
below threshold
C1 cost
10
Hematite C1 cost
A$26.97/wmt
Partially
achieved
Hematite C1 cost was A$27.64/wmt,
slightly above target resulting in
partial achievement
Cash flow
10
Sustaining capital
expenditure
A$2,134m
Achieved
A$2,133m sustaining capital
expenditure for the full year was
lower than the stretch target
Revenue
10
Fortescue Metals
EBITDA margin
(EBITDA/Total
Revenue)
Ship higher value
product volumes
>58%
Partially
achieved
Full year EBITDA margin of 63%
exceeded target
High value product objective was
not met due to a business decision
to prioritise throughput as part of
the production recovery plan
Decarbonisation
10
Reduction in forecast
emissions
Integrated
decarbonisation
schedule
2%
Delivery of
schedule and
budget
Exceeded
A 10% reduction in forecast
emissions was achieved, exceeding
the target
All FY24 decarbonisation schedule
milestones were achieved
People and Culture – 20%
People and
culture
20
Measured through the People
Experience Survey as well as Board
assessment:
Partially
achieved
Results of the People and Culture
measures were as follows:
Net promoter
score
>+34
+27
Employee
engagement index
>82
77
Female employment
rate
>23%
23.7% (Metals only)
GM & above female
employment rate
>33%
37.8% (Metals only)
Indigenous
employment rate
>15%
14.8% (Pilbara operations)
¹ In the event of a fatality, no award is made for the safety KPI.
The non-IFRS financial information included in the table above has not been subject to audit.
FORTESCUE METALS FY24 SCORECARD
The ESSIP performance objectives and outcomes in FY24 for Fortescue Metals are shown in the tables below.
Company wide operations and people and culture measures
The table below summarises the operations and people and culture measures which applied to the Fortescue Metals CEO and other
executives in the Metals business during FY24.
The outcome was 64.3 per cent out of a maximum of 80 per cent with a maximum of 20 per cent allocated to individual KPIs.
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FORTESCUE FY24 ANNUAL REPORT | 122
Individual KPIs
The table below illustrates the individual KPIs for CEO Metals, the outcome was 15 per cent out of a maximum of 20 per cent.
This resulted in a total outcome of 79.3 per cent for Fortescue Metals CEO.
Stretch target
Commentary
One Fortescue Operating Model and Culture
Embed One Fortescue into ways of working across
Fortescue Metals and Energy. Identify pathway to
address culture opportunities highlighted through 2023
People Experience Survey. Develop improved leadership
capability. Identify and address organisational capability
gaps through business and workforce planning, and
achieve a level of stability across the business.
A simplified One Fortescue leadership team established
with embedded cost reductions and shared mission.
Action Plan developed and implemented in response to
FY23 People Experience Survey but FY24 survey shows
there are still areas for improvement.
Initiatives to enhance leadership capability across both
Metals and Energy were launched including the Fortescue
Leadership Academy.
Executive level turnover still higher than target with
continued focus on organisational capability and stability.
Belinga Iron Ore Project
Achieve first shipment. Complete the 6-inch and diamond
core programs. Finalise the Belinga Accelerated Project
Plan to enable fast track to FID.
First shipment was achieved in November 2023.
6-inch diamond core program partially completed.
Belinga Accelarated Project Plan deferred.
The focus for the Belinga project is now on exploration
and studies with the team working through the process to
identify an optimised project configuration.
Iron Bridge
Successfully transition Iron Bridge from Major Projects to
Operations and ramp up as per budget. Deliver successful
commercial agreement with local pastoralists to increase
Iron Bridge water abstraction licence for the West Canning
Basin.
Iron Bridge successfully transitioned from Major Projects
to Operations in August 2023.
Ramp up as per budget not achieved due to impact of
the Raw Water Pipeline performance, which now is being
managed through a novel ‘water banking strategy’.
Commercial agreements in place with local pastoralists as
required.
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Ore Reserves and
Mineral Resources
Our approach
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climate change
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Corporate
governance
Corporate
directory
Overview
Financial report
Measure
Weighting
Detail
Stretch target
Assessed
outcome
Commentary
Operations – 60%
Safety1
10
TRIFR
Fatality Hurdle applies
≤1.8
Achieved
TRIFR of 0.3 achieved
for Energy business
Projects
20
Value accretive projects
to FID (supported by
funding solution)
5 projects
Partially
achieved
Arizona Hydrogen and
PEM50 projects went to
FID in FY24
Commercialisation
10
Products sold to new
customers across
Fortescue Zero and
Hydrogen Production
Systems
5 products
Achieved
In total seven products
were sold to new
customers in FY24
Cost
10
Segment net operating
expenditure (EBITDA
loss)
No more than
US$700m
Achieved
Management focus on
strict cost discipline,
financial management
and efficiencies resulted
in segment net operating
expenditure of US$659m
Decarbonisation
10
Integrated
decarbonisation schedule
and budget agreed
with FY24 milestones
achieved
Two solar farms
progressed to FID
Selection of
preferred solution
for all zero-
emission mobile
equipment classes
Primary wind
site selected
and necessary
approvals
underway
Partially
achieved
Decarbonisation
milestones were
achieved, except for the
second solar farm which
was ready to be taken
to FID in February 2024
but was delayed due to
circumstances outside of
management’s control
People and Culture – 20%
People and culture
20
Measured through the
People Experience Survey
as well as Board assessment:
Partially
achieved
Results of the People
and Culture measures
were as follows:
Net promoter score
>+10
+2
Employee engagement
index
>82
71
Female employment rate
>31%
28.8% (Energy only)
GM & above female
employment rate
>35%
35.8% (Energy only)
¹ In the event of a fatality, no award is made for the safety KPI.
The non-IFRS financial information included in the table above has not been subject to audit.
FORTESCUE ENERGY FY24 SCORECARD
The ESSIP performance objectives and outcomes in FY24 for Fortescue Energy are shown in the tables below.
Company wide business outcomes and people and culture measures
The table below summarises the business outcomes and people and culture measures which apply to the Fortescue Energy
CEO and other executives in the Energy business during FY24.
The outcome was 58.9% out of a maximum of 80% with a maximum of 20% allocated to individual KPIs.
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FORTESCUE FY24 ANNUAL REPORT | 124
Individual KPIs
The table below illustrates the individual KPIs for the Fortescue Energy CEO. Whilst some targets were partially achieved, the
Fortescue Energy CEO and the Board determined a total outcome of 50 per cent was appropriate.
Stretch target
Commentary
One Fortescue Operating Model & Culture
Embed One Fortescue into our ways of working across
Fortescue Metals and Energy. Identify pathway to address
culture issues highlighted through 2023 People Experience
Survey. Develop improved leadership capability. Identify and
address organisational capability gaps through business and
workforce planning and achieve a level of stability across the
business.
A simplified One Fortescue leadership team established
with embedded cost reductions and shared mission.
Action Plan developed and implemented in response to
FY23 People Experience Survey but FY24 survey shows
there are still areas for improvement.
Initiatives to enhance leadership capability across
both Metals and Energy were launched including the
Fortescue Leadership Academy.
Executive level turnover still higher than target with
continued focus on organisational capability and
stability.
Fortescue Capital
Successfully establish the Fortescue Capital business and
team with a business plan aligned to Fortescue Energy’s
funding requirements and third-party capital relationships
established.
Fortescue Capital established in New York with key
leadership appointments in place.
Business plan approved by the Board with good
progress made on obtaining third-party capital
relationships.
Fortescue WAE
Integrate WAE culture to align with Fortescue values and
provide a transparent pathway to integration (including
systems and cyber) with Fortescue, achievement of business
plan goals, and a pathway to profitability.
A pathway to integration of systems and cyber identified
and progressed. Progress on business plan goals,
culture alignment and employee engagement were
below expectations.
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financial review
Ore Reserves and
Mineral Resources
Our approach
to sustainability
climate change
report
Corporate
governance
Corporate
directory
Overview
Financial report
GROUP WIDE ROLES
For roles which support both the Metals and Energy business, including the CCO and Group CFO, company performance
outcomes are based on 50 per cent Metals performance and 50 per cent Energy performance.
Individual KPIs
The table below illustrates the individual KPIs for the Group CFO and CCO. Both the Group CFO and CCO achieved an
outcome of 15 per cent out of a maximum of 20 per cent. This resulted in a total outcome of 76.6 per cent for both the Group
CFO and CCO.
Role
Stretch target
Commentary
Group
CFO
Targets included identification of opportunities
to embed sustained efficiencies across
Finance, facilitate integration of Metals and
Energy finance functions as appropriate and
establish relationships and build networks
through engagement across the banking and
investment community.
Strong performance in managing and reporting Fortescue’s
key financial metrics.
Successful consolidation of the Group and Energy finance
functions resulting in increased productivity and clearer
accountability.
Focus on bringing together Metals and Energy businesses,
including the establishment of a simplified One Fortescue
leadership team.
Implementation of enhanced Business Planning approach
to inform the capital allocation framework.
Supported Fortescue’s institutional investor engagement
program and bank and funding engagement activities.
CCO
Objectives for the CCO included establishment
of the Corporate Services team, a focus on
Leadership and Talent Assessment including
the development and implementation of a
leadership assessment tool linked to our
capability framework to support talent and
succession planning, and improvements in
the Technology function including the use of
autonomy and AI.
Corporate Services shared mission established with
opportunities to standardise across Metals and Energy
identified.
Focus on bringing together Metals and Energy businesses,
including the establishment of a simplified One Fortescue
leadership team.
Initiatives to enhance leadership capability across
the business were launched, including the Fortescue
Leadership Academy.
A comprehensive Global Business Service strategy was
developed and implemented.
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FORTESCUE FY24 ANNUAL REPORT | 126
FY24
TFR
Maximum ESSIP
opportunity (% of TFR)
Weighting in shares
(%)1
Maximum ESSIP cash
opportunity
Maximum ESSIP shares
opportunity
ESSIP outcome %
Total ESSIP
cash awarded
Nominal value
of ESSIP vested
rights2
Nominal total
ESSIP value2
US$
Share price
at grant
A$21.9714
Share price
at vesting
A$22.0159
Share price
at grant
A$21.9714
Share price
at vesting
A$22.0159
Dino Otranto³
1,026,585
112.5
100
-
80,595 79.3
- 920,827 922,692
920,827
922,692
Mark Hutchinson
1,363,981
112.5
100
-
106,502
50
-
767,239
768,793
767,239
768,793
Apple Paget³
389,167
75
50
133,131
9,240 76.6
101,979
101,977
102,184
203,956
204,163
Shelley Robertson⁴
356,570
75
100
-
18,527 76.6
- 204,473 204,888
204,473
204,888
Remuneration values have been translated from Australian dollars to US dollars using an average exchange rate of 0.65576.
FY24
TFR
Maximum ESSIP
opportunity (% TFR)
Weighting in shares
(%)1
Maximum ESSIP cash
opportunity
Maximum ESSIP shares
opportunity
ESSIP outcome %
Total ESSIP
cash awarded
Nominal Value
of ESSIP
vested rights2
Nominal total
ESSIP value2
A$
Share price
at grant
A$21.9714
Share price
at vesting
A$22.0159
Share price
at grant
A$21.9714
Share price
at vesting
A$22.0159
Dino Otranto³
1,565,489
112.5
100
-
80,595
79.3
-
1,404,214
1,407,058 1,404,214 1,407,058
Mark Hutchinson
2,080,000
112.5
100
- 106,502
50
-
1,169,999
1,172,369 1,169,999 1,172,369
Apple Paget³
593,459
75
50 203,019
9,240
76.6
155,512
155,510
155,825
311,022
311,337
Shelley Robertson⁴
543,750
75
100
-
18,527
76.6
-
311,811
312,443
311,811
312,443
F Hick and C Morris were not employed at the time ESSIP invitations were issued and as such have not been included in the above tables. E Gaines is not eligible
to participate in the ESSIP and as such has not been included in the table. The Executive Chairman does not receive a salary or participate in any incentive plans
and as such has not been included in the table.
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$21.9714).
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 D Otranto and A Paget are pro-rated based changes in their TFR and ESSIP participating levels throughout the year.
⁴ TFR and ESSIP values for S Robertson have been pro-rated from commencement of employment with Fortescue of 1 October 2023.
FY24 ESSIP cash and shares outcomes
The table below details the maximum ESSIP cash and share awards against the actual outcomes for FY24.
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c. FY22 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. The FY22 LTIP was tested
over the period from 1 July 2021 to 30 June 2024.
The terms of the FY22 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. Given the value at vesting,
the cap has not been applied.
FY22 Metals LTIP
The Company has achieved the performance measures shown in the table below, resulting in 81.3 per cent of share rights
vesting.
FY22 LTIP Performance Outcomes
Measure
Weighting %
Threshold
Result
Achieved %
Weighted
achievement %
TSR
33
60th percentile
62.5th percentile
34.4
11.3
ROE
33
25%
34.0%
140.0
46.2
Strategic measures
34
5 out of 10
8 out of 10
70.0
23.8
FY22 LTIP vesting outcome
100
81.3
Performance measure and objective
Result
Proportion
of award
vested %
Comment
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
62.5th
percentile
34.4
Fortescue achieved a TSR of 29.8 per
cent and ranking at the 62.5th percentile
achieving a result between threshold
and target for this measure
ROE (33%)
The vesting criteria:
• threshold was set at 25%, resulting in 25% of
rights vesting
• target was set at 30%, resulting in 100% of
rights vesting; and
• 150% of rights will vest for ROE greater than
35%
34.0%
140.0
Fortescue’s underlying ROE (excluding
Fortescue Energy costs) performance
exceeded the ROE target performance
hurdle of 30 per cent achieving an
average ROE over the three year period
of 34.0 per cent
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FORTESCUE FY24 ANNUAL REPORT | 128
Performance measure and objective
Result
Proportion
of award
vested %
Comment
Strategic measures (34%)
Strategic measures
8 out
of 10
70.0
Achieved a score of 8 between the
threshold of 5 (25%) and target of 10
(100%) which equalled 70% vesting for
this measure
Technology Development
Assess beneficiation and processing
technologies that have the potential to disrupt
the existing iron/steel-making value chain,
enabled by green energy and technological
change with initial recommendations presented
to the Board for consideration by the end of FY22
with implementation of pilot plants by FY24
Achieved
at target
Four test campaigns on Fortescue’s iron
making process were completed in FY24,
with major improvements realised in plant
stability, efficiency of iron reduction, iron
recovery and amount of iron product
produced
Various green metal making processes
under development including approval of
Green Metal Project and progress of Low
Energy Direct Electrochemical Reduction
process
Magnetite Growth
Complete the Iron Bridge Magnetite Project in
line with Board approved Scope, Budget and
Timeframes with First Ore on Ship achieved
in December 2022 and on track to ramp up to
22mtpa by June 2024. Develop and commence
execution of the plan to acquire magnetite
assets to support growth strategy
Not
achieved
Iron Bridge completion (consequently,
first ore on ship and ramp up) was
significantly impacted by the COVID-19
pandemic which resulted in schedule
prolongation (e.g. low workforce
availability and delays in equipment
delivery)
Emissions
Identify a pathway to have at least 80% of the
mobile fleet (haul trucks, drills, excavators,
trains and Fortescue ore carriers) capable of
running on renewable energy or associated
variant (i.e. hydrogen, ammonia) by 2030
(subject to Board approval and capital
allocation)
Achieve 30% of stationary power from
renewables for existing operations (subject
to Board approval and capital allocation) and
identify a pathway to achieve at least 80% of
stationary power from renewables for existing
operations by 2030
Achieved
at target
Zero emission solution pathways
identified for over 90% of the mobile
fleet, with manufacturing pathways
selected for 81% of the fleet. Supplying
an average of over 30% of their
stationary power demand from solar
has been achieved at some sites (e.g.
Chichester)
Access to Inventory
Work with traditional owners, regulatory
bodies and other third parties to implement
the required changes to approval processes
following the introduction of new State
legislation to provide access to inventory
Achieved
at target
Changes made in response to evolving
legislative regime. Stretch target of
achieving access to inventory achieved
and 450Mt unlocked to life of mine
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FY22 Energy LTIP
The Company has achieved the performance measures shown in the table below, resulting in 30.0 per cent of share rights vesting.
FY22 LTIP Performance Outcomes
Measure
Weighting %
Threshold
Result
Achieved %
Weighted
achievement %
TSR
33
60th percentile
62.5th percentile
34.4
11.3
Independent valuation
33
Threshold
valuation
Not achieved
0.0
0.0
Strategic measures
34
Five out of 10
Seven out of 10
55.0
18.7
FY22 LTIP vesting outcome
100
30.0
Performance measure and objective
Result
Proportion
of award
vested %
Comment
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
62.5th
percentile
34.4
Fortescue achieved a TSR of 29.8 per
cent and ranking at the 62.5th percentile
achieving a result between threshold
and target for this measure
Independent valuation (33%)
The vesting criteria:
• performance at threshold resulting in 25% of
rights vesting
• performance at target, resulting in 100% of
rights vesting; and
• 150% of rights will vest for greater than three
times target
Not
achieved
0.0
Fortescue Energy’s valuation was not
achieved
Strategic measures (34%)
Strategic measures
7 out
of 10
55.0
Achieved a score of 7 between the
threshold of 5 (25%) and target of 10
(100%) which equalled 55% vesting for
this measure
Renewable Resource Exclusivity
Gain exclusive rights to access, occupy and use
land for the generation of 300GW of renewable
energy, which includes the generation from
the Power Purchase Agreements (PPA) where
security of supply exists.
Secure a pathway to land with potential for
generating capacity of 1,250GW
Partially
achieved
Secured exclusive rights to access,
occupy and use land for the generation of
88GW of renewable energy
As an outcome of the Board Think Tank
in FY23, the Energy business pivoted
to focus on a revised land strategy to
identify and secure 400GW of the best
energy resources in the most suitable
countries for the coming years. The pivot
resulted in the rationalisation of regional
development and a strategic decision
to not renew agreements in certain
jurisdictions.
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FORTESCUE FY24 ANNUAL REPORT | 130
Performance measure and objective
Result
Proportion
of award
vested %
Comment
Strategic measures (34%) continued
Projects
Develop and commence execution of the
plan to deliver 15mtpa of green hydrogen (or
equivalent) by 2030, targeting first production
commencing in 2024
Secure offtake agreements to align with
project supply
Secure green funding to align with project
schedule
Partially
achieved
The 15mtpa target will not be achieved
by 2030. During FY24, the Energy
business pivoted its strategic execution
to focus and invest in projects
that provide the most competitive
economics, are repeatable, have the
most certainty of execution, and have
a strong line of sight to off takers in key
regulated markets
Technology Development
Assess beneficiation and processing
technologies that have the potential to disrupt
the existing iron/steel-making value chain,
enabled by green energy and technological
change with initial recommendations
presented to the Board for consideration by
the end of FY22 with implementation of pilot
plants by FY24
Demonstrate pilot scale trials of
electrochemical reduction of iron ore,
developed in-house by Fortescue Future
Industries
Trail Metal Membrane technology at
commercial scale
Partially
achieved
Four test campaigns on the green metal
making process were completed in
FY24, with major improvements realised
in plant stability, efficiency of iron
reduction, iron recovery and amount of
iron product produced
Solomon Detritals Pilot Facility approved
and under development. Significant
upgrades programme commenced
Various green metal making processes
under development including approval
of the Green Metal Project and progress
of Low Energy Direct Electrochemical
Reduction process
Manufacturing
Complete the Green Energy Manufacturing
(GEM) Centre in Gladstone in line with Board
approved scope, budget and timeframes with
first electrolysers produced in FY24
Develop and commence execution of the
plan to expand manufacturing capability
to additional components and additional
facilities
Achieved
at target
Facility commissioned in April 2024 in
line with Board approved scope and
budget with the first Electrolyser stack
produced in March 2024
In FY24, Fortescue Zero opened the
Banbury production facility in the UK to
manufacture advanced power systems
for heavy industrial applications
Manufacturing of prototype systems
has commenced for the T264 truck,
with full scale production scheduled to
commence in FY25, along with systems
for additional equipment type
Green Fleet and Emissions
Identify a pathway to have at least 80% of the
mobile fleet (haul trucks, drills, excavators,
trains and Fortescue ore carriers) capable of
running on renewable energy or associated
variant (i.e. hydrogen, ammonia) by 2020
(subject to Board approval and capital
allocation)
Achieve 30% of stationary power from
renewables for existing operations (subject
to Board approval and capital allocation) and
identify a pathway to achieve at least 80% of
stationary power from renewables for existing
operations by 2030
Achieved
at target
Zero emission solution pathways
identified for over 90% of the mobile
fleet, with manufacturing pathways
selected for 81% of the fleet. Supplying
an average of over 30% of their
stationary power demand from solar
has been achieved at some sites (e.g.
Chichester)
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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$
Fixed
remuneration1
FY24 ESSIP
cash paid
Nominal value of
FY24 ESSIP
vested rights 2,3
Nominal value of
FY22 LTIP
vested rights 4,5
Other payment
Termination
payment
Nominal total
remuneration
earned in FY24
E Gaines⁶
745,927
-
-
631,095
-
-
1,377,022
D Otranto
1,026,585
-
922,692
595,995
-
-
2,545,272
M Hutchinson
1,363,981
-
768,793
-
-
-
2,132,774
A Paget
389,167
101,979
102,184
-
-
-
593,330
S Robertson
356,570
-
204,888
-
-
-
561,458
F Hick⁷
214,568
-
-
-
-
1,369,334
1,583,902
C Morris⁸
127,190
-
-
-
-
250,395
377,585
Remuneration values have been translated from Australian dollars to US dollars using an average exchange rate of 0.65576, except for the FY22 LTIP
which has been translated at 0.68512, which is the three year average exchange rate to reflect the LTIP performance period.
A$
Fixed
remuneration1
FY24 ESSIP
cash paid
Nominal value of
FY24 ESSIP
vested rights 2,3
Nominal value of
FY22 LTIP
vested rights 4,5
Other payment
Termination
payment
Nominal total
remuneration
earned in FY24
E Gaines⁶
1,137,500
-
-
921,145
-
-
2,058,645
D Otranto
1,565,489
-
1,407,058
869,914
-
-
3,842,461
M Hutchinson
2,080,000
-
1,172,369
-
-
-
3,252,369
A Paget
593,459
155,512
155,825
-
-
-
904,796
S Robertson
543,750
-
312,443
-
-
-
856,193
F Hick⁷
327,205
-
-
-
-
2,088,164
2,415,369
C Morris⁸
193,958
-
-
-
-
381,840
575,798
The Executive Chairman does not receive a salary or participate in any incentive plans and as such has not been included in the table.
¹ Fixed remuneration includes cash salary, paid leave and superannuation.
² FY24 ESSIP share rights granted at the beginning of the performance period at a VWAP of A$21.9714.
³ FY24 ESSIP vested rights awarded have a nominal value based on A$22.0159 being the five day VWAP at the beginning of FY25. 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 FY22 LTIP share rights granted at the beginning of the performance period at a VWAP of A$23.576.
⁵ FY22 LTIP vested rights awarded have a nominal value based on A$22.0159 being the five day VWAP at the beginning of FY25. The decrease in share
price over the respective performance periods has resulted in an unrealised decrease in equity value to KMP in respect to these plans.
⁶ E Gaines is not eligible to participate in the ESSIP in her role as Executive Director and Global Ambassador. The value shown in relation to the FY22 LTIP
relates to her ongoing eligibility in relation to her previous role as CEO.
⁷ F Hick resigned as Fortescue Metals CEO with her last day of employment being 28 February 2024. Ms Hick remained employed by the company during
her six month notice period with remuneration received during this period shown under the termination payment. Following the conclusion of her
employment, Ms Hick was paid amount equivalent to six months’ pay, noting the company elected to impose Ms Hick’s post-employment restraint. This
value also shown under termination payment.
⁸ C Morris departed Fortescue on 31 August 2023, on cessation of employment she received a payment of A$287,500 in lieu of her three month notice
period and a payment of A$94,340 to assist with relocation to the United States of America. These values are shown under the termination payment
column.
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6. 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 FY24 (noting differences, where applicable, between Fortescue Metals
and Fortescue Energy ESSIP plans):
Element
Description
Delivery
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 per
cent of awards in equity (a minimum of 50 per cent 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 FY24, the Board set a number of challenging targets for Fortescue Metals and Fortescue Energy (noted
below). Where employees support both businesses, outcomes are based on 50 per cent Metals and 50 per
cent Energy performance.
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 FY24 are
disclosed in Section 5.
FORTESCUE METALS
FORTESCUE ENERGY
The Board set a number of challenging targets for
operations, including production, safety, cost and
revenue across all operating and support functions:
• The operational measures were chosen as they
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 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 Board set a number of challenging targets
specific to Fortescue Energy including safety,
delivery of projects in Australia and globally, as well
as Decarbonisation and Commercialisation across all
operating and support functions:
• The measures were chosen as they represent the
key drivers of financial performance and provide
a framework for delivering long term shareholder
value
• 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 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.
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Element
Description
Target setting
Fortescue sets challenging ESSIP stretch targets and uses 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. Whilst each individual KPI has the opportunity
to achieve stretch levels of performance, the overall outcome is capped at 100 per cent.
Performance
% of Target achieved
% of Target awarded
Below threshold
<90% of Target
Nil
Threshold
90% of Target
10
Between threshold and target
95% of Target
50
Target
100% of Target
100
Stretch
≥120% of Target
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 (i.e. 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; and
• Any other relevant under or over performance or other criteria not stated above including how results
have been achieved.
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.
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. The key terms of the FY24 LTIP are set out in the table below.
Responding to feedback for improved disclosure, Strategic Measures for all ‘on-foot’ LTIP grants (FY22, FY23 and FY24) are
now included in the Remuneration Report. The strategic measures and outcomes for the FY22 grant are outlined in section 5,
and the strategic measures for the FY23 and FY24 LTIP are provided immediately below the FY24 LTIP key terms table.
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FORTESCUE FY24 ANNUAL REPORT | 134
Element
Description
Delivery
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.
Performance measure breakdown
Total Shareholder Return (33%)
Return on Equity (33%)
Key Strategic Measures (34%)
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. Each individual measure contributes to the
overall result with vested rights awarded based on the aggregate of the three measures.
A number of key changes will be implemented for FY25, including the removal of the ability to
earn up to 150 per cent on any individual measure, and the removal of ROE as a performance
measure.
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. Whilst each individual performance measure includes stretch
targets, with a relative contribution on any individual measure of up to 150 per cent, the overall
cap for the LTIP is 100 per cent of the maximum number of share rights granted.
Performance
and vesting
conditions
Relative TSR performance measure
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 FY24 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:
Key Terms of the FY24 LTIP:
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Element
Description
Performance
and vesting
conditions
(continued)
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
At the 80th percentile
100% of share rights vest
Stretch
At the 100th percentile
150% of share rights vest
Outcomes between performance levels are calculated on a linear basis.
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 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 with respect to the TSR measure.
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
25%
25% of share rights vest
Target
30%
100% of share rights vest
Stretch
>35%
150% of share rights vest
Outcomes between performance levels are calculated on a linear basis.
Strategic Measures
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 alone. 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 People, Remuneration and Nomination 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 (Strategic
Objectives).
In response to feedback, a more fulsome disclosure of the strategic measures has been included. The
strategic measures for the FY24 grant are set out below.
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
<5
Nil
Threshold
5
25% of share rights vest
Target
10
100% of share rights vest
Stretch
15
150% of share rights vest
Board
discretion
Awards under the LTIP are at all times subject to the Board’s absolute discretion.
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FY23 LTIP Strategic Measures
The table below summarises Strategic Measures for the FY23 LTIP. For other key terms relating to the FY23 LTIP please refer
to Fortescue’s FY23 Annual Report.
Fortescue shared measures
Decarbonisation
Endorsed at least 1.5GW of combined wind and solar capacity and have commenced construction of the first tranche of
this renewables capacity. Endorsed the zero emissions solutions plan for Fortescue’s entire mining fleet (excavators, drills
and trucks), including supporting charging and maintenance infrastructure, and commenced implementation by securing
at least 45 per cent of requisite mining fleet. Deliver the first electric haul trucks developed by Fortescue’s Green Fleet
team in conjunction with WAE (now Fortescue Zero) and Liebherr to at least one Fortescue site. Fortescue remaining on
track to deliver the Board approved US$6.2 billion (real basis) capital expenditure decarbonisation programme.
Fortescue Metals
Fortescue Energy
Green Metal
Commenced the construction of a green demonstration
plant facility, whether wholly owned or through a
partnership, for at least one emerging green metal-making
technology
Green Industry
Six products in production which can directly contribute
to the decarbonisation of Fortescue and should be
suitable for competitive sale in the open market
Belinga Iron Ore Development
Identified a target resource of at least 2 billion tonnes of Iron
Ore
Progressed the study for the broader development of
the Belinga Project to be in a position to take a final
investment decision
Projects
Two green energy projects to commissioning phase by
June 2025 in line with Board approved scope, budget,
and timeframes
Gender Diversity
40% female representation in Manager roles and above
across the Energy organisation
Pilbara Iron Ore
Continue to develop initiatives that enhance the iron
ore resource base, including delivery of the exploration
program, implementation of beneficiation technologies,
acquisitions and accessing inventory
Revenue
Achieve revenue target cumulatively calculated over the
performance period
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FY24 LTIP Strategic Measures
To further support the evolution of the One Fortescue operating model, and to simplify and align all executives to a single
long-term vision, the LTIP has transitioned from separate scorecards for our Metals and Energy businesses to one single
Fortescue scorecard for FY24 onwards. The table below summarises Strategic Measures for the FY24 LTIP.
Fortescue
Pilbara Iron Ore
Create a pathway for an incremental 200Mt of iron ore inventory through submitted referrals/approvals so that the tonnes
are available to be scheduled as part of the Fortescue Life of Mine Plan, subject to Native Title Party resourcing.
Metals Growth
Belinga Iron Ore Project
Complete scoping study and progress pre-feasibility in line with Board approved parameters
Critical Minerals
Critical minerals activities progressed with a pipeline of exploration and advanced development projects in Copper,
Lithium and / or Rare Earth Elements (REEs).
Energy
Achieved three value accretive green energy projects with construction complete and commissioning commenced in line
with Board approved scope, budget and timeframe.
Technology
Fortescue WAE (now Fortescue Zero) to achieve EBITDA target.
Fortescue Hydrogen Systems to achieve EBITDA target.
>15 AI projects delivered with target ROI over three years, and >500 people trained in advanced machine learning.
Fortescue Capital
Build the Fortescue Capital team and brand to serve as a catalyst for the business for green hydrogen and decarbonisation
and to market specific investment opportunities generated by Metals or Energy.
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Element
ESSIP
LTIP
What
happens on
cessation of
employment
Unless the Board exercises its discretion under the
ESSIP rules, for individuals who leave during the year
(i.e. before 30 June) the ESSIP is pro-rated based
on service during the period, and made at the usual
payment date, which is around September of each
year, post release of audited and approved full year
results.
Individuals who commence during the year similarly
will have awards under the ESSIP pro-rated based on
service during the performance period.
Unless the Board exercises its discretion under
the plan rules, on cessation participants may be
entitled to retain a pro rata portion of unvested
performance rights, which may vest, subject to
satisfaction of the applicable vesting conditions,
in accordance with the original terms of their
grant at the end of the vesting period.
Clawback
policy
Fortescue operates a Clawback policy which applies to both the ESSIP and LTIP. Clawback 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 Clawback 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.
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:
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Position
Executive
TFR (A$)1
Maximum ESSIP
opportunity
Maximum LTIP
opportunity
Nominal
value of total
remuneration
package at
maximum
opportunity A$
% of TFR
A$
% of TFR
A$
Executive Director
and Fortescue Global
Ambassador
E Gaines²
500,000
-
-
-
-
500,000
Fortescue Metals CEO
D Otranto³
1,750,000
112.5
1,968,750
150
2,625,000
6,343,750
Fortescue Energy CEO
M Hutchinson
2,080,000
112.5
2,340,000
150
3,120,000
7,540,000
Group CFO
A Paget⁴
840,000
75
525,000
100
700,000
2,065,000
Chief Corporate Officer
S Robertson⁵
725,000
75
543,750
100
725,000
1,993,750
Fortescue Metals CEO
F Hick⁶
2,080,000
112.5
2,340,000
150
3,120,000
7,540,000
Fortescue Metals CFO
C Morris⁷
1,150,000
75
862,500
100
1,150,000
3,162,500
The Executive Chairman does not receive a salary or participate in any incentive plans and as such has not been included in the table.
¹ Includes superannuation and allowances. TFR is reviewed annually by the People, Remuneration and Nomination Committee. ² E Gaines’ remuneration was
updated effective 1 May 2024 to reflect a reduction in time commitment as an Executive Director and Global Ambassador.
³ D Otranto was appointed to the role of Fortescue Metals CEO on 28 August 2023. Prior to that Mr Otranto served as COO Metals.
⁴ A Paget was appointed to the role of Fortescue Metals CFO on an acting basis from 1 September 2023. Ms Paget was subsequently appointed to the role
of Group Chief Financial Officer on an acting basis with effect from 21 February 2024. The TFR value in the above table is based on Ms Paget’s substantive
role as at 30 June 2024, being Deputy CFO, inclusive of a higher duties allowance for acting in the role of Group CFO. Higher duties allowances are excluded
from TFR for the purposes of calculating ESSIP and LTIP opportunity. In July 2024 Ms Paget was appointed to the Group Chief Financial Officer role on a
permanent basis.
⁵ S Robertson was appointed to the role of Chief Corporate Officer on 1 October 2023. In July 2024 it was announced that Ms Robertson was appointed to the
role of Chief Operating Officer.
⁶ F Hick resigned as Fortescue Metals CEO on 28 August 2023 with her last day of employment being 28 February 2024. Ms Hick remained employed by the
company during her six month notice period.
⁷ C Morris departed Fortescue on 31 August 2023.
7. EXECUTIVE CONTRACT TERMS
Executive KMP are employed on a rolling basis with no specified fixed term. All current KMP, with the exception of the
Executive Director, are required to provide written notice of twelve 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
for KMP for FY24.
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Position
Fee A$
Deputy Chair and Lead Independent Director
1,265,000¹
Non-Executive Director
230,000
Audit, Risk Management and Sustainability Committee (ARMSC) Chair
65,000
ARMSC Member
30,000
Remuneration and People Committee (RPC) Chair
65,000
RPC Member
30,000
Finance Sub-Committee Member
12,000
Australia FFI Advisory Board Fee²
184,000
Fortescue Capital Advisory Board Fee³
184,000
Nomination Committee Member
-
¹ Inclusive of Committee membership fees.
² The Australia FFI Advisory Board concluded in January 2024.
³ The Fortescue Capital Advisory Board was established in November 2023.
NEDs do not receive retirement benefits, nor do they participate in any incentive programs of the Company.
b. NED Salary Sacrifice Share Rights Plan
NEDs 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 purchased 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.
c. NED Travel Allowance
A NED Travel Allowance was introduced in FY24 to recognise the increasingly global footprint of Fortescue, the geographic
spread of directors, and as a mechanism to attract global candidates for director positions. This allowance does not apply to
the Chair, Deputy Chair, or Executive Director. The allowance applies to attendance at Board meetings only and is limited to
international travel. The amount payable depends on flight duration (one-way). For international flights greater than five hours
but less than 10 hours the allowance is A$7,500 and for international flights of more than 10 hours the allowance is A$15,000, with
only one allowance paid per round trip.
8. NON-EXECUTIVE DIRECTOR
REMUNERATION
a. NED remuneration policy and fees
Fortescue’s policy on Non-Executive Director (NED) remuneration requires that NED 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 NED remuneration of comparable companies.
The maximum aggregate remuneration payable to NEDs is A$4.5 million, which was approved by shareholders at the
Annual General Meeting on 22 November 2022.
Most NEDs receive fees for both Board and Committee membership. The payment of additional fees for serving on a
Committee recognises the additional time commitment required by NEDs who serve on a Committee.
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9. 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 FY24 consisted solely of non-executive directors. The chief executive officer 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 Committee.
A copy of the RPC Charter is available from the Corporate Governance section of our website at 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 2024, 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 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
Remuneration
Consultants
Board Remuneration
and People
Committee
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% of annual base fee
CEO¹:
200% of total fixed remuneration
Other Executive KMP:
100% of total fixed remuneration
¹ Applies to both 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
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.
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 fortescue.com
Directors’ report
FORTESCUE FY24 ANNUAL REPORT | 142
10. 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 FY24 refer
to Section 5. The tables below include statutory remuneration disclosures for FY24 and FY23. Disclosures are provided in
USD and AUD.
US$
Short-
term
employee
benefits
Post
employment
benefits
Termination
benefits
Long-term
employee
benefits
Share-based
payments
Total
statutory
remuneration
Cash salary
and fees
ESSIP cash
value for plan
year
Other cash
payment
Non-monetary
benefits
Superannuation
Other cash
payment
Accrued annual
and long
service leave
ESSIP
share value
LTIP
share value
Total
Executive Directors
A Forrest
FY24
-
-
-
5,925
-
-
-
-
-
5,925
FY23
-
-
-
-
-
-
-
-
-
-
E Gaines
FY24
727,894
-
-
203
18,033
-
-
-
(53,138)⁷
692,991
FY23
230,444
- 1,331,132
19,230
3,088
-
15,718
-
123,764
1,723,376
Other Key Management Personnel of Fortescue
D Otranto
FY24
1,008,552
-
-
2,728
18,033
-
36,725
1,005,773
644,129
2,715,940
FY23
848,799
-
-
623
18,525
-
35,692
680,519
304,560
1,888,718
M Hutchinson
FY24
1,345,947
-
-
45,781
18,033
-
125,810
833,537
937,441
3,306,549
FY23
1,320,924
644,178
-
24,579
18,154
-
101,767
760,843
460,164
3,330,609
A Paget¹
FY24
374,139
101,979
-
2,088
15,028
-
40,180
113,814
105,810
753,038
FY23
-
-
-
-
-
-
-
-
-
-
S Robertson²
FY24
343,044
-
-
-
13,525
-
31,126
222,131
-
609,826
FY23
-
-
-
-
-
-
-
-
-
-
F Hick³
FY24
211,350
-
-
1,472
13,525 1,359,027
20,886
-
(404,815)
1,201,445
FY23
465,850
-
-
329
8,892
-
42,911
596,312
415,859
1,530,153
C Morris⁴
FY24
122,682
-
-
4,626
4,508
250,395
11,423
-
-
393,634
FY23
-
-
-
-
-
-
-
-
-
-
J Shuttleworth⁵
FY24
-
-
-
-
-
-
-
-
-
-
FY23
68,327
-
-
-
1,603
-
6,639
-
28,636
105,205
I Wells⁶
FY24
-
-
-
-
-
-
-
-
-
-
FY23
431,965
- 673,650
7,711
12,780
-
63,732
-
(441,199)
748,639
Remuneration values have been translated from Australian dollars to US dollars using an average exchange rate of 0.67365 for FY23 and 0.65576 for FY24.
Directors’ report
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A$
Short-
term
employee
benefits
Post
employment
benefits
Termination
benefits
Long-term
employee
benefits
Share-based
payments
Total
statutory
remuneration
Cash salary
and fees
ESSIP cash
value for plan
year
Other cash
payment
Non-monetary
benefits
Superannuation
Other cash
payment
Accrued annual
and long
service leave
ESSIP
share value
LTIP
share value
Total
Executive Directors
A Forrest
FY24
-
-
-
9,035
-
-
-
-
-
9,035
FY23
-
-
-
-
-
-
-
-
-
-
E Gaines
FY24
1,110,000
-
-
309
27,500
-
-
-
(81,032)⁷
1,056,776
FY23
342,083
-
1,976,000
28,546
4,583
-
23,333
-
183,721 2,558,266
Other Key Management Personnel of Fortescue
D Otranto
FY24
1,537,989
-
-
4,159
27,500
-
56,004
1,533,752
982,263
4,141,667
FY23 1,260,000
-
-
925
27,500
-
52,983
1,010,196
452,104 2,803,708
M Hutchinson
FY24 2,052,500
-
-
69,813
27,500
-
191,854
1,271,101
1,429,549
5,042,318
FY23 1,960,847 956,250
-
36,486
26,949
-
151,069
1,129,434
683,091
4,944,126
A Paget¹
FY24
570,542
155,512
-
3,185
22,917
-
61,273
173,561
161,355
1,148,344
FY23
-
-
-
-
-
-
-
-
-
-
S Robertson²
FY24
523,125
-
-
-
20,625
-
47,465
338,739
-
929,955
FY23
-
-
-
-
-
-
-
-
-
-
F Hick³
FY24
322,298
-
-
2,245
20,625
2,072,446
31,850
-
(617,322)
1,832,142
FY23
691,532
-
-
488
13,199
-
63,700
885,195
617,322
2,271,435
C Morris⁴
FY24
187,083
-
-
7,055
6,875
381,840
17,419
-
-
600,272
FY23
-
-
-
-
-
-
-
-
-
-
J Shuttleworth⁵
FY24
-
-
-
-
-
-
-
-
-
-
FY23
101,429
-
-
-
2,380
-
9,856
-
42,509
156,173
I Wells⁶
FY24
-
-
-
-
-
-
-
-
-
-
FY23
641,231
-
1,000,000
11,446
18,972
-
94,606
-
(654,938)
1,111,317
¹ A Paget was appointed to the role of Fortescue Metals CFO on an acting basis from 1 September 2023 and is considered a KMP from that date.
² S Robertson commenced employment on 1 October 2023.
³ F Hick resigned as Fortescue Metals CEO with her last day of employment being 28 February 2024. Ms Hick remained employed by the company during her six
month notice period with remuneration received during this period shown under the termination payment. Following the conclusion of her employment,
Ms Hick was paid amount equivalent to 6 months’ pay, noting the company elected to impose Ms Hick’s post-employment restraint. This value also shown under
termination payment.
⁴ C Morris departed Fortescue on 31 August 2023, on cessation of employment she received a payment of A$297,500 in lieu of her three month notice period and a
payment of A$94,340 to assist with relocation to the United States of America. These values are shown under the termination benefits column.
⁵J Shuttleworth ceased to be a KMP from 4 August 2022. The values in the above table for FY23 reflect remuneration up to that date.
⁶ I Wells ceased to be a KMP from the date of his cessation of employment on 31 January 2023. The values in the above table for FY23 reflect remuneration up to
that date.
⁷ Negative value relates to reversal of prior year accruals..
Directors’ report
FORTESCUE FY24 ANNUAL REPORT | 144
US$
Base
fees
Committee
fees
Other
benefits¹
Superannuation
Total
M Barnaba AM
FY24
811,503
-
764
18,033
830,300
FY23
833,642
-
-
18,525
852,167
Dr J Baderschneider²
FY24
150,825
130,278
34,427
-
315,530
FY23
154,940
144,161
-
-
299,101
P Bingham-Hall
FY24
138,517
64,441
20,437
18,033
241,428
FY23
140,831
44,086
-
18,525
203,442
Lord S Coe CH, KBE
FY24
150,825
19,673
19,673
-
190,171
FY23
154,940
-
-
-
154,940
E Gaines³
FY24
-
-
-
-
-
FY23
126,310
32,950
535,441
15,438
710,139
J Morris OAM
FY24
-
-
-
-
-
FY23
141,829
58,852
-
18,525
218,936
Y Li
FY24
150,825
-
35,191
-
186,016
FY23
172,945
-
-
-
172,945
Dr Y Zhang
FY24
-
-
-
-
-
FY23
64,558
-
-
-
64,558
Dr L Marshall
FY24
114,349
14,915
20,437
16,383
166,084
FY23
-
-
-
-
-
U Rao-Monari
FY24
100,550
18,361
9,836
-
128,747
FY23
-
-
-
-
-
Remuneration values have been translated from Australian dollars to US dollars using an average exchange rate of 0.67365 for FY23 and 0.65576 for FY24.
b. NED remuneration
The remuneration of NEDs for the year ended 30 June 2024 and 30 June 2023 is detailed below.
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A$
Base
fees
Committee
fees
Other
benefits1
Superannuation
Total
M Barnaba AM
FY24
1,237,500
-
1,165
27,500
1,266,165
FY23
1,237,500
-
-
27,500
1,265,000
Dr J Baderschneider²
FY24
230,000
198,667
52,500
-
481,167
FY23
230,000
214,000
-
-
444,000
P Bingham-Hall
FY24
211,231
98,269
31,165
27,500
368,165
FY23
209,056
65,444
-
27,500
302,000
Lord S Coe CH, KBE
FY24
230,000
30,000
30,000
-
290,000
FY23
230,000
-
-
-
230,000
E Gaines³
FY24
-
-
-
-
-
FY23
187,501
48,913
794,836
22,917
1,054,167
J Morris OAM
FY24
-
-
-
-
-
FY23
210,538
86,962
-
27,500
325,000
Y Li
FY24
230,000
-
53,665
-
283,665
FY23
256,728
-
-
-
256,728
Dr Y Zhang
FY24
-
-
-
-
-
FY23
95,833
-
-
-
95,833
Dr L Marshall
FY24
174,376
22,745
31,165
24,983
253,268
FY23
-
-
-
-
-
U Rao-Monari
FY24
153,333
28,000
15,000
-
196,333
FY23
-
-
-
-
-
¹ Other benefits includes the Non-Executive Director travel allowance and reportable fringe benefits.
² Jean Baderschneider committee fees include the FFI Board Fee which recognises additional commitments associated with FFI subsidiary Board
responsibilities and Fortescue Capital Advisory Board Fee.
³ Elizabeth Gaines transitioned to an Executive Director role effective July 2023.
c. Details of performance grants to Executive Directors
There were no performance rights granted to Executive Directors in FY24.
Directors’ report
FORTESCUE FY24 ANNUAL REPORT | 146
LTIP Plan
Grant date
Performance
period
No. share rights
granted
Value per share
right granted
Value of rights
granted at grant
date
% Performance
achieved
% Vested
No. Vested
Forfeited /
lapsed
US$
A$
US$
A$
E Gaines¹
FY22
9/11/2021
1/7/21 to
30/6/2024
132,338
6.23
8.42
824,466
1,114,286
81.3
31.6
41,840
90,498
FY23
-
-
-
-
-
-
-
-
-
-
-
FY24
-
-
-
-
-
-
-
-
-
-
-
D Otranto
FY22
22/11/2021
1/7/21 to
30/6/2024
48,602
6.76
9.28
328,550
451,027
81.3
81.3
39,513
9,089
FY23
7/12/2022
1/7/22 to
30/6/2025
75,883
8.03
11.93
609,340
905,284
Determined in 2025
FY24
4/12/2023
1/7/23 to
30/6/2026
95,578
10.41
15.77
994,967 1,507,265
Determined in 2026
FY24²
29/04/2024
1/7/23 to
30/6/2026
19,884
11.07
16.91
220,116
336,238
Determined in 2026
M Hutchinson
FY22
-
-
-
-
-
-
-
-
FY23
7/12/2022
1/7/22 to
30/6/2025
176,814
7.80
11.59
1,379,149 2,049,274
Determined in 2025
FY24
4/12/2023
1/7/23 to
30/6/2026
142,002
10.41
15.77
1,478,241 2,239,372
Determined in 2026
A Paget
FY22
-
-
-
-
-
-
-
-
FY23
-
-
-
-
-
-
-
-
FY24
4/12/2023
1/7/23 to
30/6/2026
12,194
10.41
15.77
126,940
192,299
Determined in 2026
FY24³
29/04/2024
1/7/23 to
30/6/2026
17,254
11.07
16.91
191,002
291,765
Determined in 2026
S Robertson
FY22
-
-
-
-
-
-
-
-
FY23
-
-
-
-
-
-
-
-
FY24
-
-
-
-
-
-
-
-
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.
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LTIP Plan
Grant date
Performance
period
No. share rights
granted
Value per share
right granted
Value of rights
granted at grant
date
% Performance
achieved
% Vested
No. Vested
Forfeited /
lapsed
US$
A$
US$
A$
I Wells⁴
FY22
22/11/2021
1/7/21 to
30/6/2024
46,319
6.76
9.28
313,116
429,840
-
-
-
46,319
FY23
7/12/2022
1/7/22 to
30/6/2025
66,278
8.03
11.93
532,212
790,697
-
-
-
66,278
FY24
-
-
-
-
-
-
-
-
-
-
-
F Hick⁵
FY22
-
-
-
-
-
-
-
-
-
-
-
FY23
3/04/2023
1/7/22 to
30/6/2025
143,452
8.76
12.91
1,256,640 1,851,965
-
-
-
143,452
FY24
-
-
-
-
-
-
-
-
-
-
-
The Executive Chairman does not receive a salary or participate in any incentive plans and as such has not been included in the table.
¹ E Gaines remains eligible to participate in the FY22 LTIP on a pro-rata basis. The vesting outcome of 31.6% includes the lapsing of a pro-rata proportion
of rights on cessation of employment.
² D Otranto received an additional LTIP grant in FY24 to recognise an increase in participating TFR in the performance period.
³ A Paget received an additional LTIP grant in FY24 to recognise an increase in participating percentage and TFR in the performance period.
⁴ I Wells did not remain eligible to participate in any outstanding LTIP grants and as such all unvested performance rights lapsed.
⁵ F Hick did not remain eligible to participate in any outstanding LTIP grants and as such all unvested performance rights lapsed.
Directors’ report
FORTESCUE FY24 ANNUAL REPORT | 148
FY22 LTIP and FY24 ESSIP share rights movement
Executive
Share
rights granted
Share
rights lapsed
Share
rights forfeited
Share
rights vested
E Gaines
FY24 ESSIP
-
-
-
-
FY22 LTIP
132,338
90,498
-
41,840
M Hutchinson
FY24 ESSIP
106,502
53,251
-
53,251
FY22 LTIP
-
-
-
-
D Otranto
FY24 ESSIP
80,595
16,684
-
63,911
FY22 LTIP
48,602
9,089
-
39,513
A Paget
FY24 ESSIP
9,240
2,163
-
7,077
FY22 LTIP
-
-
-
-
S Robertson
FY24 ESSIP
18,527
4,336
-
14,191
FY22 LTIP
-
-
-
-
Share rights movement in FY24
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:
FY24
Balance
at the
start of
the year
Granted
Exercised /
converted
Forfeited
/ lapsed
Other
Balance
at the
end of
the year
Vested
Unvested
Not
exercisable
Executive Directors of Fortescue
E Gaines
204,627
-
(147,920)
(5,243)
-
51,464
-
51,464
51,464
Other Key Management Personnel of Fortescue
D Otranto
181,397
196,057
(50,409)
(6,503)
-
320,542
-
320,542
320,542
M Hutchinson
243,119
248,504
(56,359)
(9,946)
-
425,318
-
425,318
425,318
A Paget
5,258
40,240
(4,657)
(601)
-
40,240
-
40,240
40,240
S Robertson
-
18,527
-
-
-
18,527
-
18,527
18,527
C Morris
-
-
-
-
-
-
-
-
-
F Hick
190,305
-
(41,500)
(148,805)
-
-
-
-
-
e. KMP share rights
Share rights granted under the ESSIP at the beginning of FY24 (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
FY22 which vested in FY24 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.
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Financial report
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:
FY24
Held at
1 July 2023
Received on
conversion
of rights
Issued
Purchases
Sales
Transfers
Other
Held at
30 June 2024
Non-executive Directors of Fortescue
M Barnaba AM
40,300
-
-
-
-
-
-
40,300
Dr J Baderschneider
138,000
-
-
-
-
-
-
138,000
P Bingham-Hall
59,861
-
-
2,496
-
-
-
62,357
Lord S Coe CH, KBE
5,000
-
-
5,000
-
-
-
10,000
Y Li
-
-
-
-
-
-
-
-
Dr L Marshall
-
-
-
1,900
-
-
100
2,000
U Rao-Monari
-
-
-
-
-
-
-
-
Executive Directors of Fortescue
Dr A Forrest AO
1,131,365,000
-
-
-
-
-
-
1,131,365,000
E Gaines
341,294
147,920
-
-
(147,920)
-
-
341,294
Other Key Management Personnel of Fortescue
D Otranto
378
50,409
-
207
(50,409)
-
-
585
M Hutchinson
19,114
56,359
-
2,207
-
-
-
77,680
A Paget
-
4,657
-
206
-
-
-
4,863
S Robertson
-
-
-
-
-
-
-
-
F Hick
-
41,500
-
139
(41,639)
-
-
-
C Morris
-
-
-
-
-
-
-
-
Financial report
FORTESCUE FY24 ANNUAL REPORT | 150
FINANCIAL
REPORT
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CONSOLIDATED INCOME STATEMENT
For the year ended 30 June 2024
2024
2023
Note
US$m
US$m
Operating sales revenue
3
18,220
16,871
Cost of sales
5
(8,673)
(7,817)
Gross profit
9,547
9,054
Other income
4
45
53
Other expenses
6
(1,103)
(2,087)
Operating profit
8,489
7,020
Finance income
7
218
149
Finance expenses
7
(386)
(275)
Share of loss from equity accounted investments
22(c)
(21)
(8)
Profit before tax
8,300
6,886
Income tax expense
14
(2,636)
(2,090)
Net profit after tax
5,664
4,796
Net profit is attributable to:
Equity holders of the Company
5,683
4,798
Non-controlling interest
(19)
(2)
Net profit after tax
5,664
4,796
Note
Cents
Cents
Earnings per share for profit attributable to the ordinary equity holders
of the Company:
Basic earnings per share
8
184.8
156.0
Diluted earnings per share
8
184.4
155.7
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2024
2024
2023
US$m
US$m
Net profit after tax
5,664
4,796
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
7
52
Items that will not be reclassified to profit or loss in subsequent periods, net of tax:
Gain on investments taken to equity
16
4
Other comprehensive income, net of tax
23
56
Total comprehensive income for the period, net of tax
5,687
4,852
Total comprehensive income for the period attributable to:
Equity holders of the Company
5,706
4,854
Non-controlling interest
(19)
(2)
Total comprehensive income for the period, net of tax
5,687
4,852
The above consolidated income statement and consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
FINANCIAL REPORT
Financial report
FORTESCUE FY24 ANNUAL REPORT | 152
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2024
2024
2023
Note
US$m
US$m
ASSETS
Current assets
Cash and cash equivalents
9(b)
4,903
4,287
Trade and other receivables
10(a)
654
520
Inventories
10(c)
1,527
1,189
Other current assets
81
89
Total current assets
7,165
6,085
Non-current assets
Trade and other receivables
18
16
Inventories
10(c)
342
458
Property, plant and equipment
12(a)
21,682
20,974
Intangible assets
12(b)
388
299
Investments accounted for using the equity method
22(c)
260
260
Financial assets measured at fair value
104
77
Other non-current assets
101
49
Total non-current assets
22,895
22,133
Total assets
30,060
28,218
LIABILITIES
Current liabilities
Trade and other payables
10(b)
1,662
1,482
Borrowings and lease liabilities
9(a)
192
165
Provisions
13
508
445
Deferred income
10(d)
65
71
Current tax payable
14(c)
259
304
Total current liabilities
2,686
2,467
Non-current liabilities
Borrowings and lease liabilities
9(a)
5,208
5,156
Provisions
13
1,026
1,063
Deferred income
10(d)
84
28
Deferred tax liabilities
14(d)
1,525
1,506
Total non-current liabilities
7,843
7,753
Total liabilities
10,529
10,220
Net assets
19,531
17,998
EQUITY
Contributed equity
9(d)
1,077
1,044
Reserves
9(e)
175
170
Retained earnings
18,300
16,775
Equity attributable to equity holders of the Company
19,552
17,989
Non-controlling interest
(21)
9
Total equity
19,531
17,998
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
Financial report
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CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2024
2024
2023
Note
US$m
US$m
Cash flows from operating activities
Cash receipts from customers
18,341
16,849
Payments to suppliers and employees
(7,652)
(6,833)
Cash generated from operations
10,689
10,016
Interest received
238
144
Interest paid
(343)
(349)
Income tax paid
(2,665)
(2,379)
Net cash inflow from operating activities
9(c)
7,919
7,432
Cash flows from investing activities
Payments for property, plant and equipment - Fortescue
(2,547)
(1,959)
Payments for property, plant and equipment - joint operations
(287)
(942)
Payments of deposits
(24)
–
Proceeds from loan (2023: receipt of contributions) from non-controlling
interest
10
11
Receipt of government grants
54
–
Payments for acquisition of equity accounted investments
(30)
(221)
Purchase of financial assets
(17)
(59)
Other investing activities
30
55
Net cash outflow from investing activities
(2,811)
(3,115)
Cash flows from financing activities
Repayment of borrowings
(10)
(760)
Repayment of leases
(135)
(138)
Finance costs paid
(38)
(30)
Dividends paid
(4,140)
(3,922)
Purchase of shares by employee share trust
(142)
(151)
Net cash outflow from financing activities
(4,465)
(5,001)
Net increase / (decrease) in cash and cash equivalents
643
(684)
Cash and cash equivalents at the beginning of the period
4,287
5,224
Effects of exchange rate changes on cash and cash equivalents
(27)
(253)
Cash and cash equivalents at the end of the period
9(b)
4,903
4,287
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Financial report
FORTESCUE FY24 ANNUAL REPORT | 154
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2024
Attributable to equity holders of the Company
Non-
Contributed
Retained
controlling
Total
equity
Reserves
earnings
Total
interest
equity
US$m
US$m
US$m
US$m
US$m
US$m
Balance at 1 July 2022
1,053
109
16,175
17,337
8
17,345
Net profit after tax
–
–
4,798
4,798
(2)
4,796
Other comprehensive income
–
56
–
56
–
56
Total comprehensive income for
the period, net of tax
–
56
4,798
4,854
(2)
4,852
Transactions with owners:
Purchase of shares under employee
share plans
(151)
–
–
(151)
–
(151)
Employee share awards vested
142
(142)
–
–
–
–
Equity settled share-based payment
transactions
–
148
–
148
–
148
Acquisition of non-controlling interest
–
–
–
–
(8)
(8)
Contributions from non-controlling
interests
–
–
–
–
11
11
Dividends declared
–
–
(4,199)
(4,199)
–
(4,199)
Other
–
(1)
1
–
–
–
Balance at 30 June 2023
1,044
170
16,775
17,989
9
17,998
Balance at 1 July 2023
1,044
170
16,775
17,989
9
17,998
Net profit after tax
–
–
5,683
5,683
(19)
5,664
Other comprehensive income
–
23
–
23
–
23
Total comprehensive income for
the period, net of tax
–
23
5,683
5,706
(19)
5,687
Transactions with owners:
Purchase of shares under employee
share plans
(142)
–
–
(142)
–
(142)
Employee share awards vested
175
(175)
–
–
–
–
Equity settled share-based payment
transactions
–
156
–
156
–
156
Return of contributions to non-
controlling interests
–
–
–
–
(11)
(11)
Dividends declared
–
–
(4,158)
(4,158)
–
(4,158)
Other
–
1
–
1
–
1
Balance at 30 June 2024
1,077
175
18,300
19,552
(21)
19,531
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
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NOTES TO THE
CONSOLIDATED
FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Basis of preparation
01 Basis of preparation
156
Financial performance
02 Segment information
157
03 Operating sales revenue
159
04 Other income
159
05 Cost of sales
160
06 Other expenses
160
07 Finance income and finance expenses
161
08 Earnings per share
161
Capital management
09 Capital management
162
9(a)
Borrowings and lease liabilities
163
9(b) Cash and cash equivalents
165
9(c) Cash flow information
165
9(d) Contributed equity
166
9(e) Reserves
166
9(f) Dividends
167
10 Working capital
168
10(a) Trade and other receivables
168
10(b) Trade and other payables
168
10(c) Inventories
168
10(d) Deferred income
169
11 Financial risk management
169
11(a) Market risk
169
11(b) Credit risk
171
11(c) Liquidity risk
172
11(d) Fair values
173
Key balance sheet items
12 Property, plant and equipment and
intangible assets
174
12(a) Property, plant and equipment
174
12(b) Intangible assests
176
13 Provisions
177
Taxation
14 Taxation
178
14(a) Income tax expense
178
14(b) Prima facie income tax expense
reconciliation
178
14(c) Reconciliation of income tax expense
to current tax payable
179
14(d) Deferred tax assets and liabilities
179
14(e) Unrecognised tax losses and tax credits 180
Unrecognised items
15 Commitments and contingencies
181
16 Events occurring after the reporting period
181
Other
17 Related party transactions
182
18 Share-based payments
183
19 Remuneration of auditors
185
20 Deed of cross guarantee
186
21 Parent entity financial information
189
22 Interests in other entities
191
23 Summary of material accounting policies
193
24 Critical accounting estimates and judgements 208
Financial report
FORTESCUE FY24 ANNUAL REPORT | 156
BASIS OF PREPARATION
01 Basis of preparation
The financial statements cover the consolidated group
comprising of Fortescue Ltd (formerly 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.
The financial statements for the year ended 30 June
2024 were authorised for issue in accordance with a
Directors’ resolution on 28 August 2024.
(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 24.
(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.
Notes to the consolidated financial statements
For the year ended 30 June 2024
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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,
green ammonia projects, as well as green technology
development and manufacturing.
Corporate includes cash, intercompany loans which
eliminate at consolidation, 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 transactions between segments, those
transactions 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
2024
2023
2024
2023
2024
2023
2024
2023
Note
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
Revenue from external customers
3
18,129
16,764
91
107
–
–
18,220
16,871
Underlying EBITDA
11,400
10,545
(659)
(617)
(33)
35
10,708
9,963
Depreciation and amortisation
5,6
(2,144)
(1,744)
Finance income
7
218
149
Finance expense
7
(386)
(275)
Exploration, development and other
6
(96)
(170)
Impairment expense
6
–
(1,037)
Income tax expense
14(a)
(2,636)
(2,090)
Net profit after tax
5,664
4,796
Notes to the consolidated financial statements
For the year ended 30 June 2024
Financial report
FORTESCUE FY24 ANNUAL REPORT | 158
Notes to the consolidated financial statements
For the year ended 30 June 2024
FINANCIAL PERFORMANCE
02 Segment information (continued)
(b) Other segmental reporting
Metals
Energy
Corporate
Consolidated
2024
2023
2024
2023
2024
2023
2024
2023
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
Capital expenditure (cash
basis)
2,553
2,809
295
92
–
–
2,848
2,901
Investments accounted
for using the equity
method
19
17
241
243
–
–
260
260
Total assets
23,603
22,748
1,199
819
5,258
4,651
30,060
28,218
Total liabilities
3,781
3,546
314
203
6,434
6,471
10,529
10,220
(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.
2024
2023
US$m
US$m
Revenue from external customers
China
16,082
15,015
Other
2,138
1,856
18,220
16,871
(d) Major customer information
Revenue from the two largest customers amounted to US$1,760 million and US$1,335 million respectively
(2023: US$1,793 million and US$1,206 million), arising from the sale of iron ore and the related shipment of product.
Financial report
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Notes to the consolidated financial statements
For the year ended 30 June 2024
FINANCIAL PERFORMANCE
03 Operating sales revenue
2024
2023
US$m
US$m
Iron ore revenue
16,741
15,482
Provisional pricing adjustments - iron ore
(336)
(164)
Total iron ore revenue1
16,405
15,318
Shipping revenue
1,556
1,386
Provisional pricing adjustments - shipping revenue
57
(30)
Total shipping revenue1
1,613
1,356
Manufacturing and engineering services revenue2
91
106
Other revenue3
111
91
Operating sales revenue
18,220
16,871
1Certain sales contracts are provisionally priced at the initial revenue recognition (bill of lading) date, with the final
settlement price based on a pre-determined quotation period. Operating sales revenue from these contracts each
comprise two parts:
(i) Iron ore revenue and shipping revenue recognised at the bill of lading date at current prices; and
(ii) Provisional pricing adjustments which represent any difference between the revenue recognised at the bill of
lading date and the final settlement price.
Shipping revenue and the provisional pricing adjustments to shipping revenue are recognised over the period during
which the shipping service has been provided.
2Manufacturing and engineering services revenue is earned from contracts with customers. Revenue is recognised
when control of the goods or services are transferred to the customer (over time or at a point in time) at an amount
that reflects the consideration to which the Group is entitled in exchange for those goods or services.
3Other revenue includes towage services provided by Fortescue which is recognised as performed.
04 Other income
2024
2023
US$m
US$m
Net foreign exchange gain
–
48
Grants income
7
–
Other
38
5
45
53
Financial report
FORTESCUE FY24 ANNUAL REPORT | 160
FINANCIAL PERFORMANCE
05 Cost of sales
2024
2023
US$m
US$m
Mining and processing costs
3,102
2,856
Rail costs
288
266
Port costs
278
251
Shipping costs
1,531
1,455
Government royalty
1,209
1,124
Depreciation and amortisation
2,098
1,708
Manufacturing and engineering services costs
97
76
Other operating expenses
70
81
8,673
7,817
Total employee benefits expense included in cost of sales, administration expenses and research expenditure is
US$1,847 million (2023: US$1,754 million).
06 Other expenses
2024
2023
US$m
US$m
Administration expenses
416
288
Research expenditure
495
553
Impairment expense1
–
1,037
Exploration, development and other
96
170
Depreciation and amortisation
46
36
Fair value change in financial instruments
10
3
Net foreign exchange loss
31
–
Other
9
–
1,103
2,087
1Impairment expense relates to the impairment of the Iron Bridge CGU in prior year ended 30 June 2023 as described in note 12(a).
Notes to the consolidated financial statements
For the year ended 30 June 2024
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Notes to the consolidated financial statements
For the year ended 30 June 2024
FINANCIAL PERFORMANCE
07 Finance income and finance expenses
2024
2023
US$m
US$m
Finance income
Interest income
218
149
218
149
Finance expenses
Interest expense on borrowings and lease liabilities
313
228
Loss on early debt redemption
–
2
Other
73
45
386
275
08 Earnings per share
Cents
Cents
(a) Earnings per share
2024
2023
Basic
184.8
156.0
Diluted
184.4
155.7
(b) Reconciliation of earnings used in calculating earnings per
share
US$m
US$m
Net profit attributable to the ordinary equity holders of the Company used
in calculating basic and diluted earnings per share
5,683
4,798
(c) Weighted average number of shares used as denominator
Number
Number
Weighted average number of ordinary shares used as the denominator in calculating
basic earnings per share
3,075,951,886
3,075,997,351
Adjustments for calculation of diluted earnings per share:
Potential ordinary shares
5,204,787
5,793,933
Weighted average number of ordinary and potential ordinary shares used as the
denominator in calculating diluted earnings per share
3,081,156,673
3,081,791,284
(d) Information on the classification of securities
Share rights granted to employees under the Fortescue incentive plan are considered to be potential ordinary shares
and have been included in the determination of diluted earnings per share to the extent to which they are dilutive.
Details relating to the share rights are set out in note 18.
Financial report
FORTESCUE FY24 ANNUAL REPORT | 162
09 Capital management
Fortescue’s capital management policy supports its strategic objectives and provides a framework to maintain a
strong capital structure to deliver consistent returns to its shareholders as well as invest in future developments and
expansion of the business.
Fortescue’s capital includes total equity and net debt. Net debt is defined as borrowings and lease liabilities less cash
and cash equivalents.
2024
2023
Note
US$m
US$m
Borrowings
9(a)
4,585
4,587
Lease liabilities
9(a)
815
734
Cash and cash equivalents
9(b)
(4,903)
(4,287)
Net debt
497
1,034
Equity attributable to equity holders of the Company
19,552
17,989
Non-controlling interest
(21)
9
Total equity
19,531
17,998
Capital management involves a continuous process of:
• Evaluating capital requirements against the risks arising from Fortescue’s activities and its operating environment
• Raising, refinancing and repaying debt
• Development, maintenance and implementation of the dividend policy.
Fortescue has developed target ranges for a number of financial indicators. These indicators include gearing, net
gearing, debt to Underlying EBITDA and interest coverage ratio, and are monitored together with a number of
other financial and non-financial indicators. Target ranges for the financial ratios may vary upon the investment
and commodity cycles. During periods of intensive investment, for example expansion programs, or a commodity
downturn, the capital management policy contemplates interim ratio levels returning to a targeted longer term level.
Interim levels acknowledge and consider the requirements, in certain circumstances, for remedial actions to be taken.
As per previous disclosures, Fortescue has a share buy-back program in place that is an important part of the capital
management strategy. The program was put in place in 2018 and was extended in October 2020 for an unlimited
duration.
Notes to the consolidated financial statements
For the year ended 30 June 2024
CAPITAL MANAGEMENT
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Notes to the consolidated financial statements
For the year ended 30 June 2024
CAPITAL MANAGEMENT
09 Capital management (continued)
(a) Borrowings and lease liabilities
2024
2023
US$m
US$m
Senior unsecured notes
36
36
Green senior unsecured notes
14
14
Syndicated term loan
10
9
Lease liabilities
132
106
Total current borrowings and lease liabilities
192
165
Senior unsecured notes
2,778
2,774
Green senior unsecured notes
789
788
Syndicated term loan
958
966
Lease liabilities
683
628
Total non-current borrowings and lease liabilities
5,208
5,156
Total borrowings and lease liabilities
5,400
5,321
(i) Senior unsecured and green senior unsecured notes
As at 30 June 2024, the Company had the following senior unsecured notes on issue:
Date of
Non-call
Face value
Carrying value
Coupon
Date of issue
maturity
period
US$m
US$m
rate
Currency
September 2019
September 2027
8 years
600
606
4.500%
USD
March 2021
April 2031
10 years
1,500
1,505
4.375%
USD
April 2022
April 2030
8 years
700
703
5.875%
USD
April 2022
April 2032
10 years
800
803
6.125%
USD
3,600
3,617
The April 2032 US$800 million senior unsecured note is a Green Bond.
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 2024 had a carrying value of US$968 million (30
June 2023: US$975 million) with a coupon rate linked to Secured Overnight Financing Rate (SOFR) plus a fixed margin.
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, which
was available to draw until December 2023. As at 30 June 2024, the additional syndicated term loan facility remained
undrawn and has lapsed.
Financial report
FORTESCUE FY24 ANNUAL REPORT | 164
Notes to the consolidated financial statements
For the year ended 30 June 2024
CAPITAL MANAGEMENT
09 Capital management (continued)
(a) Borrowings and lease liabilities (continued)
(iii) Revolving credit facility
The US$1,025 million revolving credit facility with a maturity date on 28 July 2025, remained undrawn at 30 June 2024 and
30 June 2023. If drawn, interest accrues based on a variable rate linked to SOFR plus a fixed margin and is payable at the end
of the interest period selected (either one, two, three or six months), with the principal due at maturity.
(iv) Lease liabilities
The Group enters into contractual arrangements for the leases of mining equipment, vehicles, buildings and other assets.
Typically, the duration of these contracts is for periods of between 2 and 5 years, some of which include extension options
and are recognised within lease liabilities.
2024
2023
US$m
US$m
Expense relating to short-term leases
111
176
Expense relating to leases of low-value assets that are not shown above as
short-term leases
4
4
Expense relating to variable lease payments not included in the
measurement of lease liabilities
133
133
Future cashflows from leases not yet commenced
94
58
(v) Summary of movements in borrowings and lease liabilities
Senior
Green senior
Syndicated
Lease
unsecured notes
unsecured notes
term loan
liability
Total
US$m
US$m
US$m
US$m
US$m
Balance at 1 July 2022
3,560
802
986
755
6,103
Additions
–
–
–
139
139
Interest expense
173
50
59
58
340
Payments
(925)
(50)
(66)
(187)
(1,228)
Disposals
–
–
–
(14)
(14)
Transaction costs
2
–
(4)
–
(2)
Foreign exchange gain
–
–
–
(17)
(17)
Balance at 30 June 2023
2,810
802
975
734
5,321
Additions
–
–
–
232
232
Interest expense
137
50
77
74
338
Payments
(133)
(49)
(84)
(201)
(467)
Disposals
–
–
–
(25)
(25)
Foreign exchange loss
–
–
–
1
1
Balance at 30 June
2024
2,814
803
968
815
5,400
Information about Fortescue’s exposure to interest rate risk and foreign exchange rate risk is disclosed in note 11.
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Notes to the consolidated financial statements
For the year ended 30 June 2024
CAPITAL MANAGEMENT
09 Capital management (continued)
(b) Cash and cash equivalents
2024
2023
US$m
US$m
Cash at bank
1,815
2,693
Short term deposits
3,088
1,594
4,903
4,287
The cash and cash equivalents disclosed above and in the consolidated statement of cash flows include US$99 million
(2023: US$215 million) which are held by the Iron Bridge Joint Venture and reflects the 69% share of the Group. These
cash and cash equivalents are subject to contractual restrictions arising from the joint operation arrangement and are
therefore not available for general use by the other entities within the Group.
(c) Cash flow information
Reconciliation of net profit after tax to net cash inflow from operating activities
2024
2023
US$m
US$m
Net profit after tax
5,664
4,796
Depreciation and amortisation
2,144
1,744
Impairment expense
–
1,037
Exploration, development and other
96
170
Share-based payment expense
156
148
Net unrealised foreign exchange (gain)/loss
(35)
6
Rehabilitation expenditure
(1)
(22)
Depreciation in inventory
(1)
31
Equity accounted investments
26
15
Other non-cash items
52
(103)
Working capital adjustments:
Increase / (decrease) in payables
183
(1)
Increase in receivables
(136)
(60)
Increase in inventories
(222)
(94)
Increase in other assets
(81)
(18)
Increase / (decrease) in deferred income
50
(2)
Increase in provisions
57
72
Decrease in provision for income taxes payable
(52)
(20)
Increase / (decrease) in deferred tax liabilities
19
(267)
Net cash inflow from operating activities
7,919
7,432
Financial report
FORTESCUE FY24 ANNUAL REPORT | 166
Notes to the consolidated financial statements
For the year ended 30 June 2024
CAPITAL MANAGEMENT
09 Capital management (continued)
(d) Contributed equity
(i) Share capital
Issued
Treasury
Contributed
Issued
Treasury
Contributed
shares
shares
equity
shares
shares
equity
Number
Number
Number
US$m
US$m
US$m
At 1 July 2022
3,078,964,918
(2,425,286)
3,076,539,632
1,195
(142)
1,053
Purchase of shares under
employee share plans
–
(12,941,756)
(12,941,756)
–
(151)
(151)
Employee share awards
vested
–
12,288,513
12,288,513
–
142
142
At 30 June 2023
3,078,964,918
(3,078,529)
3,075,886,389
1,195
(151)
1,044
Purchase of shares under
employee share plans
–
(10,854,167)
(10,854,167)
–
(142)
(142)
Employee share awards
vested
–
10,933,022
10,933,022
–
175
175
At 30 June 2024
3,078,964,918
(2,999,674)
3,075,965,244
1,195
(118)
1,077
(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.
(e) Reserves
2024
2023
US$m
US$m
Share-based payments reserve
102
121
Foreign currency translation reserve
68
61
Financial assets reserve
21
5
Other reserves
(16)
(17)
175
170
(i) Share-based payments reserve
The share-based payments reserve is used to recognise the value of equity-settled share-based payments provided
to employees, including key management personnel, as part of their remuneration.
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Notes to the consolidated financial statements
For the year ended 30 June 2024
CAPITAL MANAGEMENT
09 Capital management (continued)
(f) Dividends
(i) Dividends paid during the year
2024
2023
US$m
US$m
Final fully franked dividend for the year ended 30 June 2023: A$1.00 per share (30 June
2022: A$1.21 per share)
1,975
2,591
Interim fully franked dividend for the half-year ended 31 December 2023: A$1.08 per
share (31 December 2022: A$0.75 per share)
2,183
1,608
4,158
4,199
(ii) Dividends declared and not recognised as a liability
2024
2023
US$m
US$m
Final fully franked dividend: A$0.89 per share (2023: A$1.00 per share)
1,858
1,975
(iii) Franking credits
2024
2023
A$m
A$m
Franking credit account balance at the end of the financial year at 30% (2023: 30%)
7,454
6,183
Franking credits that will arise from the payment of current tax payable as at the end of
the year
355
431
Franking debits that will arise from the payment of the final dividend for the year
(1,175)
(1,320)
6,634
5,294
(e) Reserves (continued)
(ii) Foreign currency translation reserve
The foreign currency translation reserve is used to recognise the exchange differences arising from the translation of
non-US dollar functional currency subsidiaries into US dollar Group presentation currency.
(iii) Financial assets reserve
The financial assets reserve represents the fair value changes on financial assets measured at fair value through
other comprehensive income. The Group transfers amounts from this reserve to retained earnings when the relevant
financial asset is derecognised.
(iv) Other reserves
The other reserves consists of capital reserve and general reserve.
Financial report
FORTESCUE FY24 ANNUAL REPORT | 168
Notes to the consolidated financial statements
For the year ended 30 June 2024
CAPITAL MANAGEMENT
10 Working capital
(a) Trade and other receivables
2024
2023
US$m
US$m
Trade debtors
429
331
GST receivables
120
68
Other receivables
105
121
Total current receivables
654
520
Iron ore trade receivables with embedded derivatives for provisional pricing amounting to US$368 million as at 30 June
2024 (2023: US$331 million) 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 amount to US$4 million as at 30 June
2024 for which a full provision has been recognised (2023: nil).
The carrying value of the receivables approximates their fair value. Information about Fortescue’s exposure to foreign
currency risk, interest rate risk and price risk pertaining to the trade and other receivables balances is disclosed in note
11.
Disclosures relating to receivables from related parties are set out in note 17.
(b) Trade and other payables
2024
2023
US$m
US$m
Trade payables
1,041
984
Royalty accrual
317
346
Other payables
304
152
Total current payables
1,662
1,482
(c) Inventories
2024
2023
US$m
US$m
Iron ore stockpiles
962
786
Warehouse stores, materials and work in progress
565
403
Total current inventories
1,527
1,189
Iron ore stockpiles
342
458
Total non-current inventories
342
458
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 2024 amounted to US$5,863 million (2023: US$5,157
million). During the year, inventory write-offs of US$16 million (2023: US$35 million) were recognised in relation to
specific items of warehouse stores and materials that were identified as obsolete. A net realisable value write-down of
US$51 million (2023: nil) was also recognised in relation to magnetite iron ore stockpiles.
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Notes to the consolidated financial statements
For the year ended 30 June 2024
CAPITAL MANAGEMENT
10 Working capital (continued)
(d) Deferred income
2024
2023
US$m
US$m
Deferred revenue - Iron ore sales
44
61
Deferred revenue - Manufacturing and engineering services
17
10
Deferred income - Government grants
2
–
Deferred income - Others
2
–
Total current deferred income
65
71
Deferred revenue - Infrastructure
21
21
Deferred income - Government grants
63
7
Total non-current deferred income
84
28
11 Financial risk management
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, Finance and
Risk Management Committee. The day-to-day management responsibility for execution of the risk management
framework has been delegated to the Metals CEO, Energy CEO and Group CFO. Periodically, the Group CFO reports to
the Audit, Finance and Risk Management 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 price (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 2024, Fortescue had 4.6 million tonnes of iron ore sales (2023: 2.6 million tonnes)
that remained subject to provisional pricing, with the final price to be determined in the following financial year.
A two 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 (2023: three per cent movement would have an impact on the Group’s profit of
US$6 million), before the impact of taxation. This analysis assumes all other factors, including the foreign currency
exchange rates, are held constant.
Financial report
FORTESCUE FY24 ANNUAL REPORT | 170
Notes to the consolidated financial statements
For the year ended 30 June 2024
CAPITAL MANAGEMENT
11 Financial risk management (continued)
(a) Market risk (continued)
(ii) Interest rate risk
The Group’s interest rate risk arises from variable rates on the syndicated term loan, the revolving credit facility to the
extent it is drawn, and the lease liabilities relating to the ore carriers. Changes in rates applicable to the short-term
deposits forming part of cash and cash equivalents also give rise to interest rate risk.
Fortescue’s policy is to reduce interest rate risk over the cash flows on its long-term debt funding through the use of
fixed rate instruments whenever appropriate.
Fortescue’s variable rate financial assets and liabilities at the end of the financial year are summarised below:
2024
2023
Note
US$m
US$m
Cash and cash equivalents
9(b)
1,815
2,693
Syndicated term loan
9(a)
(968)
(975)
Lease liabilities
(267)
(294)
580
1,424
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 25 basis points in interest rates in variable instruments would have an impact on the Group’s profit of
US$1 million (2023: a change of 50 basis points would impact profit by US$7 million), before the impact of taxation.
This analysis assumes that all other factors remain constant, including foreign currency rates.
(iii) Foreign currency exchange risk
Fortescue operates in Australia with a significant portion of its operating costs and capital expenditure incurred and
paid in Australian dollars, and as such, is exposed to the movements in the Australian dollar exchange rate.
Fortescue’s risk management policy is to target specific levels at which to convert United States dollars to Australian
dollars by entering into either spot or short-term forward exchange contracts or structured foreign currency option
arrangements (i.e. collars) to fix a portion of the Group’s Australian dollar exposure to within a Board-approved range.
The Group has not applied hedge accounting to any of these contracts during the year.
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Notes to the consolidated financial statements
For the year ended 30 June 2024
CAPITAL MANAGEMENT
11 Financial risk management (continued)
(iii) Foreign currency exchange risk (continued)
The carrying amounts of the financial assets and liabilities denominated in Australian dollars and Chinese Yuan (CNY)
(expressed in US dollars), are set out below:
AUD denominated
CNY denominated
2024
2023
2024
2023
US$m
US$m
US$m
US$m
Financial assets
Cash and cash equivalents
828
945
222
436
Trade and other receivables
59
201
–
–
Other financial assets
52
72
–
–
Total financial assets
939
1,218
222
436
Financial liabilities
Borrowings and lease liabilities
416
392
2
–
Trade and other payables
864
891
10
13
Current tax payable
259
304
–
–
Total financial liabilities
1,539
1,587
12
13
A change of two per cent in the Australian dollar exchange rate would have a net impact on the Group’s profit of US$12
million (2023: a change of two per cent would have an impact of US$7 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$4 million
(2023: a change of two per cent would have an impact of US$8 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 customers. Contracts for iron ore sales are completed under 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 2024, the Group had US$5 million (2023: US$2 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.
Financial report
FORTESCUE FY24 ANNUAL REPORT | 172
Notes to the consolidated financial statements
For the year ended 30 June 2024
CAPITAL MANAGEMENT
11 Financial risk management (continued)
(b) Credit risk (continued)
Fortescue has recognised bad debt expense from trading counterparties of US$4 million for the year ended 30 June
2024 (2023: nil).
The exposure to the credit risk from cash and short-term deposits held in banks is managed by the Group's Treasury
department and monitored by the Group CFO. Fortescue minimises the credit risks by holding funds with a range of
financial institutions with credit ratings approved by the Board.
(c) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as and when they fall due. Fortescue
manages liquidity risk by maintaining adequate cash reserves and banking facilities, by continuously monitoring actual
and forecast cash flows and by matching the maturity profiles of its assets and liabilities.
The table below analyses Fortescue’s financial liabilities into relevant maturity groupings based on the period to the
contracted maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.
Total
Less than
6-12
1-2
2-5
Over
contractual
Carrying
6 months
months
years
years
5 years
cash flows
amount
US$m
US$m
US$m
US$m
US$m
US$m
US$m
30 June 2023
Trade and other
payables
1,786
–
–
–
–
1,786
1,786
Borrowings
146
136
265
2,167
3,475
6,189
4,587
Lease liabilities
59
56
98
203
318
1,119
734
Lease expenditure
commitments
89
84
149
320
477
1,119
Effect of
discounting
(30)
(28)
(51)
(117)
(159)
–
1,991
192
363
2,370
3,793
9,094
7,107
30 June 2024
Trade and other
payables
1,921
–
–
–
–
1,921
1,921
Borrowings
140
130
1,214
1,110
3,319
5,913
4,585
Lease liabilities
64
68
121
242
320
1,213
815
Lease expenditure
commitments
98
99
177
363
476
1,213
Effect of
discounting
(34)
(31)
(56)
(121)
(156)
–
2,125
198
1,335
1,352
3,639
9,047
7,321
Management monitors rolling forecasts of the Group’s cash and overall liquidity position on the basis of expected cash
flows.
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For the year ended 30 June 2024
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.
2024
2023
Carrying value
Fair value
Carrying value
Fair value
US$m
US$m
US$m
US$m
Senior unsecured notes
2,814
2,599
2,810
2,504
Green senior unsecured
notes
803
790
802
760
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 2024.
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. The Group does not have any
financial assets or liabilities in this category.
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.
Financial report
FORTESCUE FY24 ANNUAL REPORT | 174
Notes to the consolidated financial statements
For the year ended 30 June 2024
KEY BALANCE SHEET ITEMS
12 Property, plant and equipment and intangible assets
(a) Property, plant and equipment
Right of use assets
Plant and
equipment
Land and
buildings
Exploration
and
evaluation
Assets under
development
Development
Plant and
equipment
Land and
buildings
Total
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$m
Net carrying
value
At 1 July 2022
9,671
584
758
5,157
3,548
822
110
20,650
Transfers of assets
1,662
85
(2)
(2,083)
267
–
–
(71)
Additions
11
1
159
2,831
–
85
56
3,143
Disposals and
write-offs
(46)
–
(100)
–
–
–
–
(146)
Depreciation
(1,224)
(59)
–
–
(298)
(142)
(16)
(1,739)
Impairment
–
–
–
(1,037)
–
–
–
(1,037)
Changes in
restoration and
rehabilitation
estimate¹
–
–
–
–
171
–
–
171
Other
–
–
–
8
(5)
–
–
3
At 30 June 2023
10,074
611
815
4,876
3,683
765
150
20,974
Cost
20,679
1,285
815
4,876
6,101
1,370
193
35,319
Accumulated
depreciation and
impairment
(10,605)
(674)
–
–
(2,418)
(605)
(43)
(14,345)
Net carrying
value
At 1 July 2023
10,074
611
815
4,876
3,683
765
150
20,974
Transfers of assets
4,048
142
(13)
(4,849)
562
–
–
(110)
Additions
25
30
190
2,576
–
147
80
3,048
Disposals and
write-offs
(48)
–
(37)
–
(6)
–
–
(91)
Depreciation
(1,591)
(63)
–
–
(283)
(125)
(27)
(2,089)
Impairment
–
–
–
–
–
–
–
–
Changes in
restoration and
rehabilitation
estimate¹
–
–
–
–
(53)
–
–
(53)
Other
–
–
–
8
(5)
–
–
3
At 30 June 2024
12,508
720
955
2,611
3,898
787
203
21,682
Cost
24,704
1,457
955
2,611
6,599
1,517
273
38,116
Accumulated
depreciation and
impairment
(12,196)
(737)
–
–
(2,701)
(730)
(70)
(16,434)
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.
In the prior year ended 30 June 2023, geology work in Ecuador tenements were put on standby whilst commercial
prioritisation of exploration projects took place. Management determined these tenements were no longer prospective
and US$63 million was written-off for the exploration and evaluation assets.
Financial report
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Notes to the consolidated financial statements
For the year ended 30 June 2024
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 as described in note 23(q), the Group is required
to assess at each reporting date whether there is any indication that its assets may be impaired. For the financial year
ended 30 June 2024, the Group’s assessment of its CGUs identified no indicators of impairment and concluded that
an impairment test was not required.
For the financial year ended 30 June 2023, indicators of impairment of the Iron Bridge CGU were identified and
accordingly, an impairment test of the Iron Bridge CGU was performed by assessing its fair value less cost of disposal
(FVLCD) compared to its carrying amount (refer to note 24(d)(i)). This resulted in the recognition of a pre-tax
impairment expense of US$1,037 million in the 30 June 2023 financial results.
The table below summarises the key judgement and estimates that may impact the carrying value of the Iron Bridge
CGU for the next 12 months as at 30 June 2024:
Price for Iron
Bridge product
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.
Operating cost
Operating cost for the ramp up period and long term are based on internal budgets and forecasts based on
life of mine plans. In determining the FVLCD, cash flows related to operating costs and capital expenditures
to enhance productivity or reduce costs are included.
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 rates are 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 is 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:
No impairment indicators were identified for the Group’s CGUs for the financial year ended 30 June 2024. For
the financial year ended 30 June 2023, an impairment expense of US$1,037 million (post tax: US$726 million)
was recognised for the Iron Bridge CGU reflecting the differences between the carrying amount and the FVLCD
recoverable amount.
Financial report
FORTESCUE FY24 ANNUAL REPORT | 176
Notes to the consolidated financial statements
For the year ended 30 June 2024
KEY BALANCE SHEET ITEMS
12 Property, plant and equipment and intangible assets (continued)
(b) Intangible assets
Goodwill
Other
intangible
assets
Total
US$m
US$m
US$m
Net carrying value
At 1 July 2022
199
58
257
Transfers
–
71
71
Additions
–
25
25
Disposals
–
(14)
(14)
Adjustment to subsidiary purchase consideration
(4)
–
(4)
Amortisation
–
(36)
(36)
At 30 June 2023
195
104
299
Cost
195
321
516
Accumulated amortisation
–
(217)
(217)
Net carrying value
At 1 July 2023
195
104
299
Transfers
–
88
88
Additions
–
56
56
Disposals
–
–
–
Amortisation
–
(55)
(55)
At 30 June 2024
195
193
388
Cost
195
465
660
Accumulated amortisation
–
(272)
(272)
In considering impairment, the goodwill recognised from the acquisition of Fortescue Zero (formerly Fortescue
WAE) by Fortescue is allocated to the CGUs expected to benefit from Fortescue Zero’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 forecasted financial
performance of the Pilbara Operations CGU and noted no indications that the goodwill needs to be impaired.
Financial report
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13 Provisions
2024
2023
US$m
US$m
Employee benefits
489
436
Restoration and rehabilitation
7
4
Others
12
5
Total current provisions
508
445
Employee benefits
5
4
Restoration and rehabilitation
1,021
1,059
Total non-current provisions
1,026
1,063
(a) Provision for restoration and rehabilitation
Movements in the provision for restoration and rehabilitation during the financial year are set out below:
2024
2023
US$m
US$m
At 1 July
1,063
912
Changes in restoration and rehabilitation estimate
(53)
171
Unwinding of discount
19
2
Payments for restoration and rehabilitation activities
(1)
(22)
At 30 June
1,028
1,063
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.
Notes to the consolidated financial statements
For the year ended 30 June 2024
KEY BALANCE SHEET ITEMS
Financial report
FORTESCUE FY24 ANNUAL REPORT | 178
Notes to the consolidated financial statements
For the year ended 30 June 2024
TAXATION
14 Taxation
For the year ended 30 June 2024, 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
Consolidated group
2024
2023
US$m
US$m
Current tax
2,613
2,360
Deferred tax
23
(270)
Income tax expense in the consolidated income statement
2,636
2,090
(b) Prima facie income tax expense reconciliation
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 2024, the Group’s global effective tax rate was 31.8 per cent. This is in line with the Australian
corporate tax rate of 30 per cent.
Consolidated
Australian
Consolidated
Australian
group 2024
group 2024
group 2023
group 2023
US$m
US$m
US$m
US$m
Profit before income tax expense
8,300
8,492
6,886
6,992
Tax at the Australian tax rate of 30 per cent
(2023: 30 per cent)
2,490
2,548
2,066
2,098
Research and development
(7)
(7)
(8)
(8)
Adjustments in respect of income tax
expense of prior periods
25
25
(11)
(11)
Foreign exchange variations and other
translation adjustments
3
3
(1)
(1)
Tax impact of overseas jurisdiction
98
18
64
13
Non-deductible expenditure
40
40
31
31
Share based payments
(16)
(16)
(20)
(20)
Other
3
–
(31)
(33)
Income tax expense
2,636
2,611
2,090
2,069
Effective tax rate
31.8%
30.7%
30.4%
29.6%
Financial report
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Notes to the consolidated financial statements
For the year ended 30 June 2024
TAXATION
14 Taxation (continued)
(c) Reconciliation of income tax expense to current tax payable
Consolidated group
2024
2023
US$m
US$m
Income tax expense in the consolidated income statement
2,636
2,090
Deferred tax (benefit) / expense
(23)
270
2,613
2,360
Current tax payable at 1 July
304
284
Tax payments made to tax authorities¹
(2,667)
(2,336)
Impact of foreign exchange on income tax payable²
9
(4)
Current tax payable at 30 June
259
304
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.
Consolidated group
2024
2023
US$m
US$m
Deferred tax assets
832
790
Deferred tax liabilities
(2,357)
(2,296)
Net deferred tax liabilities
(1,525)
(1,506)
Financial report
FORTESCUE FY24 ANNUAL REPORT | 180
Notes to the consolidated financial statements
For the year ended 30 June 2024
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:
Charged/ (credited) to
Deferred tax assets
Deferred tax liabilities
total comprehensive income
Consolidated group
Consolidated group
Consolidated group
2024
2023
2024
2023
2024
2023
US$m
US$m
US$m
US$m
US$m
US$m
Temporary differences
arising from
Exploration expenditure
–
–
(231)
(192)
39
15
Development
–
–
(536)
(668)
(132)
76
Property, plant and equipment
–
–
(1,344)
(1,218)
126
(296)
Inventories
–
–
(246)
(218)
28
15
Foreign exchange losses / (gains)
30
29
–
–
(1)
(37)
Provisions
448
447
–
–
(1)
(60)
Share based payments
31
36
–
–
5
(1)
Other financial liabilities
255
246
–
–
(9)
11
Other items1
68
32
–
–
(32)
7
832
790
(2,357)
(2,296)
23
(270)
¹ Deferred tax asset of US$4 million in 30 June 2024 and US$3 million in 2023 was recognised in equity.
(e) Unrecognised tax losses and tax credits
At 30 June 2024, the Group had income tax losses of US$438 million (2023: US$145 million) and tax credits of
US$3 million (2023: US$2 million), 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$438 million of tax losses, US$115 million expires not later than 10 years and US$12 million
expires later than 10 years and not later than 20 years. The remaining tax losses and tax credits do not expire.
Financial report
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Notes to the consolidated financial statements
For the year ended 30 June 2024
UNRECOGNISED ITEMS
15 Commitments and contingencies
Contingent liabilities represent a possible obligation arising from past events and whose existence will be confirmed
only by occurrence or non-occurrence of uncertain future events not wholly within the control of the Group. These are
not provided for on the balance sheet where the likelihood of the contingent liability is assessed as possible rather
than probable or remote.
Contingent liabilities may also be a present obligation arising from past events but is not recognised on the basis that
an outflow of economic resources to settle the obligation is not viewed as probable, or the amount of the obligation
cannot be reliably measured.
(i) Contingent assets and liabilities
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, the total quantum of compensation sought in the proceedings remains unclear. The Court has
issued a timetable for the proceedings which includes several hearings. The first hearing (for opening submissions
and on-country evidence) was held in August 2023, the second hearing (for expert and lay evidence) was held in
April 2024, a third hearing (for remaining expert evidence) will be in October 2024 and the final hearing (for closing
submissions) will be in February 2025.
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 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.
The Group has issued a number of bank and other performance guarantees for various operational and legal
purposes related to its own future performance, which are in the normal course of business. It is not expected that
these guarantees will be called on. No liabilities were recognised by the parent entity or the Group in relation to these
guarantees. Refer to note 21(b) for further details of guarantees entered into by the parent entity.
(ii) Capital commitments
2024
2023
US$m
US$m
Within one year
729
728
Between one and five years
301
373
Later than five years
7
–
Total commitments
1,037
1,101
16 Events occurring after the reporting period
On 28 August 2024, the Directors declared a final dividend of 89 Australian cents per ordinary share payable in
September 2024.
Financial report
FORTESCUE FY24 ANNUAL REPORT | 182
17 Related party transactions
(a) Subsidiaries and joint operations
Interests in significant subsidiaries and joint operations are set out in note 22.
(b) Key management personnel remuneration
2024
2023
US$'000
US$'000
Short-term employee benefits
6,304
8,673
Share-based payments
3,405
2,929
Long-term employee benefits
266
266
Post employment benefits
153
134
Termination benefits
1,609
–
11,737
12,002
Detailed information about the remuneration received by each key management person is provided in the remuneration
report on pages 106 to 149.
(c) Transactions with personally related entities
Key management personnel of the Group hold or have held positions in other companies (personally related entities)
where it is considered they control or significantly influence the financial or operating policies of those entities.
Transactions with those entities during the year are reflected below. There were no amounts owed by the Group to
personally related entities at 30 June 2024 (2023: nil).
2024
2023
US$'000
US$'000
Purchase of consulting and contracted services
2,228
3,324
Costs recharged to personally related entities
854
777
Lease of commercial space
2,105
2,520
Payments under a joint development agreement
2,967
7,272
8,154
13,893
Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
Financial report
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Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
18 Share-based payments
(a) Employee share rights plans
During the year ended 30 June 2024, Fortescue issued 1,096,921 (2023: 1,179,558) short term share rights and 1,743,806
(2023: 2,019,419) long term share rights to employees and senior executives, convertible to one ordinary share per right.
The short term rights vest over one year, and the long term rights vest over three years.
2024
2023
Number
Number
Outstanding at 1 July
7,209,493
7,084,421
Share rights granted
2,840,727
3,198,977
Share rights forfeited or lapsed
(1,523,052)
(1,192,508)
Share rights converted or exercised
(2,020,745)
(1,881,397)
Outstanding at 30 June
6,506,423
7,209,493
The weighted average fair value of share rights granted during the year ended 30 June 2024 and 2023 are presented
below:
Metals
Energy
2024
2023
2024
2023
A$/right
A$/right
A$/right
A$/right
Short term share rights
23.87
20.20
23.87
20.04
Long term share rights
15.77
12.05
15.77
11.59
The estimated fair value of the short term share rights was determined using a binomial option pricing model and the
estimated fair value of the long term share rights was determined using a combination of analytical approaches, binomial
tree and Monte Carlo simulation. The fair value estimation takes into account the exercise price, the effective life of the
right, the impact of dilution, the share price at grant date, expected price volatility of the underlying share, the effect of
additional market conditions, the expected dividend yield, estimated share conversion factor and the risk free interest rate
for the term of the right.
The weighted average inputs used to determine the fair value of share rights granted during the year ended 30 June 2024
and 2023 were:
Metals
Energy
2024
2023
2024
2023
Share price, A$
25.29
21.28
25.29
21.17
Exercise price, A$
–
–
–
–
Volatility, %
39
41
39
41
Effective life, years
1.97
1.93
1.88
1.90
Dividend yield, %
7.8
7.5
7.8
7.5
Risk free interest rate, %
4.1
3.1
4.1
3.1
Financial report
FORTESCUE FY24 ANNUAL REPORT | 184
Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
18 Share-based payments (continued)
(a) Employee share rights plans (continued)
Details of Metals share rights outstanding at 30 June 2024 are presented in the following table:
Metals
Exercise price
Balance at
the end of the
year
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
–
38,641
38,641
6.5
–
Yes
Short term share rights 2017
–
71,942
71,942
7.3
–
Yes
Short term share rights 2018
–
44,307
44,307
8.5
–
Yes
Short term share rights 2019
–
130,405
130,405
9.5
–
Yes
Short term share rights 2020
–
59,948
59,948
10.5
–
Yes
Short term share rights 2021
–
49,259
49,259
11.5
–
Yes
Short term share rights 2022
–
35,237
35,237
12.5
–
Yes
Short term share rights 2023
–
163,544
163,544
13.5
–
Yes
Short term share rights 2024
–
579,195
–
14.5
–
Yes
Long term share rights 2016
–
181,360
181,360
6.5
Yes
Yes
Long term share rights 2017
–
125,759
125,759
7.3
Yes
Yes
Long term share rights 2018
–
172,178
172,178
8.5
Yes
Yes
Long term share rights 2019
–
–
–
9.5
Yes
Yes
Long term share rights 2020
–
318,962
318,962
10.5
Yes
Yes
Long term share rights 2021
–
107,664
107,664
11.5
Yes
Yes
Long term share rights 2022
–
591,207
–
12.5
Yes
Yes
Long term share rights 2023
–
986,731
–
13.5
Yes
Yes
Long term share rights 2024
–
985,123
–
14.5
Yes
Yes
4,641,462
1,499,206
Details of Energy share rights outstanding at 30 June 2024 are presented in the following table:
Energy
Exercise price
Balance at
the end of the
year
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 2022
–
7,790
7,790
12.5
–
Yes
Short term share rights 2023
–
123,114
123,114
13.5
–
Yes
Short term share rights 2024
–
501,923
501,923
14.5
–
Yes
Long term share rights 2022
–
89,483
–
12.5
Yes
Yes
Long term share rights 2023
–
451,680
–
13.5
Yes
Yes
Long term share rights 2024
–
690,972
–
14.5
Yes
Yes
1,864,962
632,827
Financial report
FORTESCUE FY24 ANNUAL REPORT | 185
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Notes to the consolidated financial statements
For the year ended 30 June 2024
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:
2024
2023
US$m
US$m
Share-based payment expense
156
148
19 Remuneration of auditors
2024
2023
US$'000
US$'000
PricewaterhouseCoopers Australia
Audit and other assurance services
Audit and review of financial statements
1,949
1,546
Other assurance services
55
368
Total audit and assurance services
2,004
1,914
Other services
Consulting services
750
117
Total remuneration of PricewaterhouseCoopers Australia
2,754
2,031
Network firms of PricewaterhouseCoopers Australia
Audit and other assurances
Audit and review of financial statements
968
709
968
709
Total auditors' remuneration
3,722
2,740
Financial report
FORTESCUE FY24 ANNUAL REPORT | 186
Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
20 Deed of cross guarantee
Fortescue 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 Ltd
Group entities
• FMG Pilbara Pty Ltd
• Fortescue Services Pty Ltd
• Chichester Metals Pty Ltd
• FMG Personnel Pty Ltd
• FMG Resources (August 2006) Pty Ltd
• FMG Personnel Services Pty Ltd
• International Bulk Ports Pty Ltd
• FMG Resources Pty Ltd
• The Pilbara Infrastructure Pty Ltd
• CSRP Pty Ltd
• FMG Solomon Pty Ltd
• FMG Training Pty Ltd
• FMG Nyidinghu Pty Ltd
• Fortescue Green Technologies Pty Ltd
• FMG Procurement Services Pty Ltd
• Fortescue WAE Pty Ltd (formerly WAE Technologies HoldCo Pty Ltd)
• Pilbara Gas Pipeline Pty Ltd
• FMG Exploration Pty Ltd
• Pilbara Marine Pty Ltd
• W Hub Pty Ltd
• Pilbara Power Pty Ltd
• IRBR Pty Ltd
• FMG JV Company Pty Ltd
• FMG Iron Bridge Ltd1
• FMG Ashburton Pty Ltd
• FMG Iron Bridge (Aust) Pty Ltd1
• Pilbara Mining Alliance Pty Ltd
• FMG Magnetite Pty Ltd1
1These subsidiaries have subsequently joined the deed of cross guarantee by way of an assumption deed during the year ended 30 June 2024, therefore,
were only included in the consolidation of the closed group as at and for the year ended 30 June 2024.
(a) Consolidated income statement, consolidated statement of other comprehensive income, summary of
movements in consolidated retained earnings (closed group)
The above companies represent a ‘closed group’ for the purposes of the instrument, and as there are no other parties to
the deed of cross guarantee that are controlled by Fortescue Ltd, they also represent the ‘extended closed group’.
Set out below is a consolidated income statement, consolidated statement of other comprehensive income, summary of
movements in consolidated retained earnings for the year ended 30 June 2024 for the closed group represented by the
above companies.
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Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
20 Deed of cross guarantee (continued)
2024
2023
Consolidated income statement (closed group)
US$m
US$m
Operating sales revenue
18,107
16,845
Cost of sales
(8,744)
(7,838)
Gross profit
9,363
9,007
Other income
179
38
Other expenses
(286)
(890)
Operating profit
9,256
8,155
Finance income
199
109
Finance expenses
(353)
(248)
Profit before tax
9,102
8,016
Income tax expense
(2,699)
(2,468)
Net profit after tax
6,403
5,548
2024
2023
Consolidated statement of other comprehensive income (closed group)
US$m
US$m
Net profit after tax
6,403
5,548
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
2
–
Items that will not be reclassified to profit or loss in subsequent periods, net of tax:
Gain on investments taken to equity
–
–
Other comprehensive income, net of tax
2
–
Total comprehensive income for the period, net of tax
6,405
5,548
2024
2023
Summary of movements in consolidated retained earnings (closed group)
US$m
US$m
Balance at 1 July
17,902
16,553
Net profit after tax
6,403
5,548
Dividends declared
(4,158)
(4,199)
Adjustments for companies transferred into the closed group
(58)
–
Balance at 30 June
20,089
17,902
Financial report
FORTESCUE FY24 ANNUAL REPORT | 188
Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
20 Deed of cross guarantee (continued)
(b) Consolidated statement of financial position (closed group)
Set out below is a consolidated statement of financial position as at 30 June 2024 for the closed group represented by the
above companies.
2024
2023
US$m
US$m
Cash and cash equivalents
4,478
3,708
Trade and other receivables
4,350
4,712
Inventories
1,472
1,125
Other current assets
53
49
Total current assets
10,353
9,594
Trade and other receivables
235
119
Inventories
342
458
Property, plant and equipment
19,828
17,490
Intangible assets
140
95
Financial assets measured at fair value
3
-
Other non-current assets
560
1,493
Total non-current assets
21,108
19,655
Total assets
31,461
29,249
Trade and other payables
1,531
1,326
Borrowings and lease liabilities
195
172
Provisions
480
425
Deferred income
19
–
Current tax payable
235
285
Total current liabilities
2,460
2,208
Borrowings and lease liabilities
5,222
5,199
Provisions
991
959
Deferred income
21
68
Deferred tax liabilities
1,516
1,749
Total non-current liabilities
7,750
7,975
Total liabilities
10,210
10,183
Net assets
21,251
19,066
Contributed equity
1,077
1,044
Reserves
85
120
Retained earnings
20,089
17,902
Total equity
21,251
19,066
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Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
21 Parent entity financial information
(a) Summary financial information
2024
2023
US$m
US$m
Current assets1
269
345
Non-current assets1
11,518
10,137
Total assets
11,787
10,482
Current liabilities
269
345
Non-current liabilities
599
675
Total liabilities
868
1,020
Net assets
10,919
9,462
Contributed equity
1,077
1,044
Reserves
103
122
Retained earnings
9,739
8,296
Total equity
10,919
9,462
Profit for the year
5,600
4,130
Total comprehensive income for the year
5,600
4,130
1During the year, the 2023 comparative information was restated to reclassify intercompany receivable balance of US$330 million from non-current
assets to current assets as this intercompany receivable balance was collected within twelve months to settle the current liabilities.
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; and
• Profit for the year includes dividends received from subsidiaries of US$6,080 million (2023: US$4,028 million).
(b) Guarantees entered into by the parent entity
The parent entity, Fortescue Ltd, is a party to the deed of cross guarantee as described in note 20 and has provided a
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. It also provided a number of guarantees in respect of the Group companies as outlined
below.
Fortescue Ltd has unconditionally guaranteed the payment of principal and premium, if any, and interest related to the
senior unsecured and green senior unsecured notes as described in note 9(a)(i) with a total face value of US$3,600
million issued by FMG Resources (August 2006) Pty Ltd, a wholly owned subsidiary.
Fortescue Ltd and its wholly owned subsidiaries FMG Pilbara Pty Ltd, Chichester Metals Pty Ltd, FMG Solomon Pty
Ltd, International Bulk Ports Pty Ltd and The Pilbara Infrastructure Pty Ltd, have severally, fully and unconditionally
guaranteed the payment of the principal and premium, if any, and interest, including certain additional amounts that
may be payable in respect of the syndicated term loan as described in note 9(a)(ii) held by a wholly owned subsidiary,
FMG Resources (August 2006) Pty Ltd. The guaranteed syndicated term loan had a carrying amount of US$968
million as at 30 June 2024 (30 June 2023: US$975 million). The same parties have severally guaranteed the revolving
credit facility as described in note 9(a)(iii) of US$1,025 million (2023: US$1,025 million), which remained undrawn as at
30 June 2024.
Financial report
FORTESCUE FY24 ANNUAL REPORT | 190
Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
21 Parent entity financial information (continued)
(b) Guarantees entered into by the parent entity (continued)
As part of its Aboriginal Business Development activities, Fortescue Ltd seeks opportunities for Aboriginal
businesses to provide replacement equipment or additional equipment as required. Fortescue Ltd is a guarantor of
the bank facilities used by the Aboriginal businesses to purchase these assets which are then leased to the Group.
In addition, Fortescue Ltd has issued a number of bank and other guarantees to third parties for various operational
and legal purposes, which are in the normal course of business. It is not expected that these guarantees will be called
on. 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 and guarantees disclosed in note 15(i) but otherwise did
not have any contingent liabilities at 30 June 2024 or 30 June 2023.
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Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
22 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 23(a)(i):
Equity holding
Country of
Class
2024
2023
incorporation
of shares
%
%
Metals Segment
Chichester Metals Pty Ltd
Australia
Ordinary
100
100
FMG International Pte Ltd
Singapore
Ordinary
100
100
FMG International Shipping Pte Ltd
Singapore
Ordinary
100
100
FMG Insurance Singapore Pte Ltd
Singapore
Ordinary
100
100
FMG Iron Bridge (Aust) Pty Ltd
Australia
Ordinary
100
100
FMG Magnetite Pty Ltd
Australia
Ordinary
100
100
FMG Pilbara Pty Ltd
Australia
Ordinary
100
100
The Pilbara Infrastructure Pty Ltd
Australia
Ordinary
100
100
Pilbara Marine Pty Ltd
Australia
Ordinary
100
100
Karribi Developments Pty Ltd
Australia
Ordinary
100
100
FMG Air Pty Ltd
Australia
Ordinary
100
100
FMG Procurement Services Pty Ltd
Australia
Ordinary
100
100
Pilbara Housing Services Pty Ltd
Australia
Ordinary
100
100
FMG Autonomy Pty Ltd
Australia
Ordinary
100
100
Pilbara Iron Ore Pty Ltd
Australia
Ordinary
100
100
Pilbara Energy Company Pty Ltd
Australia
Ordinary
100
100
Pilbara Energy (Generation) Pty Ltd
Australia
Ordinary
100
100
FMG Clean Energy Pty Ltd
Australia
Ordinary
100
100
FMG Solomon Pty Ltd
Australia
Ordinary
100
100
FMG Resources (August 2006) Pty Ltd
Australia
Ordinary
100
100
FMG Trading Shanghai Co., Ltd
China
Ordinary
100
100
FMG Hong Kong Shipping Ltd
Hong Kong
Ordinary
100
100
FMG Exploration Pty Ltd
Australia
Ordinary
100
100
FMG Resources Pty Ltd
Australia
Ordinary
100
100
FMG International Exploration Pte Ltd
Singapore
Ordinary
100
100
Argentina Fortescue S.A.U.
Argentina
Ordinary
100
100
Ivindo Iron SA
Gabon
Ordinary
72
72
Financial report
FORTESCUE FY24 ANNUAL REPORT | 192
Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
22 Interests in other entities (continued)
(a) Subsidiaries (continued)
Equity holding
Country of
Class
2024
2023
incorporation
of shares
%
%
Energy Segment
Fortescue Future Industries Pty Ltd
Australia
Ordinary
100
100
Fortescue WAE Pty Ltd (formerly WAE Technologies HoldCo Pty Ltd)
Australia
Ordinary
100
100
Fortescue Zero Limited (formerly WAE Technologies Ltd)
United Kingdom
Ordinary
100
100
FFI USA Investments Inc
USA
Ordinary
100
100
FFI Phoenix Hub Holdings LLC
USA
Ordinary
100
100
Phoenix Hydrogen Hub LLC
USA
Ordinary
100
100
USA Fortescue Holdings Inc
USA
Ordinary
100
–
USA Fortescue Energy Holdings LLC
USA
Ordinary
100
–
MIH2 Pty Ltd
Australia
Ordinary
100
100
Australian Fortescue Future Industries Pty Ltd
Australia
Ordinary
100
100
Fortescue Hydrogen Systems Australia Pty Ltd (formerly Gladstone
Fortescue Future Industries Pty Ltd)
Australia
Ordinary
100
100
Australian Fortescue Future Industries Holdings Pty Ltd
Australia
Ordinary
100
100
Netherlands Fortescue Future Industries Holdings B.V.
Netherlands
Ordinary
100
100
Argentina Fortescue Future Industries SA
Argentina
Ordinary
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 23(a)(iii).
Participating interest
Joint
operations
Country of
incorporation
Holding entity
Principal activities
2024
2023
Iron Bridge
Joint Venture
Development of magnetite
Australia
FMG Magnetite Pty Ltd
assets and production of
69%
69%
magnetite concentrate
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23 Summary of material 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.
Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
22 Interests in other entities (continued)
(c) Investments accounted for using the equity method
The Group also holds interests in a number of individually immaterial joint ventures and associates that are accounted
for using the equity method.
Associate
Joint ventures
Total
2024
2023
2024
2023
2024
2023
US$
US$
US$
US$
US$
US$
Aggregate carrying amount as at 30 June
145
119
115
141
260
260
Aggregate amounts of the Group's share of:
Loss from operations
(20)
–
(1)
(8)
(21)
(8)
Financial report
FORTESCUE FY24 ANNUAL REPORT | 194
Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
23 Summary of material accounting policies (continued)
(a) Principles of consolidation (continued)
(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 include 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.
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 22(b).
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 23(q).
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Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
23 Summary of material accounting policies (continued)
(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.
(d) Revenue recognition
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) Interest income
Interest income is accrued using the effective interest
rate method.
Financial report
FORTESCUE FY24 ANNUAL REPORT | 196
Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
23 Summary of material accounting policies (continued)
(e) Deferred income
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.
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.
The Group continues to monitor the implementation of
the Base Erosion and Profit Shifting (BEPS) Pillar Two
initiative. These rules seek to ensure a 15% minimum
effective tax rate is paid by large multinational groups
in each global jurisdiction in which they operate. In this
regard, the Australian Government has announced an
intention to implement the Pillar Two rules in Australia,
retrospectively effective for income years commencing
on or after 1 January 2024. The implementing legislation,
if enacted, would apply to the Group from 1 July 2024.
This legislation was not enacted or substantively enacted
at 30 June 2024.
Separately, as at 30 June 2024, BEPS Pillar Two
legislation has been enacted or substantively enacted
by several overseas jurisdictions in which the Group
operates. In each case, the earliest year the rules may
potentially apply to the Group is the first income year
commencing on or after 1 January 2024 (being 1 July
2024 in the case of the Group). Fortescue is within the
scope of Pillar Two, and is therefore expected to become
subject to the rules in certain jurisdictions from 1 July
2024.
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Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
23 Summary of material accounting policies (continued)
(f) Income tax (continued)
As the rules did not yet apply to the Group in any country
at 30 June 2024, no current income tax has been
recognised as at 30 June 2024 in relation to Pillar Two
income taxes. Additionally, consistent with amendments
to AASB 112 Income Taxes, 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 has undertaken an assessment of its potential
exposure to Pillar Two income taxes, based on the most
recent tax lodgements, country-by-country reporting
and financial statements for members of the Group. That
analysis indicates that if the rules had applied to the
entire Group in the 30 June 2024 year, no material Pillar
Two income tax would be payable by the Group.
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.
(g) Cash and cash equivalents
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.
Financial report
FORTESCUE FY24 ANNUAL REPORT | 198
Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
23 Summary of material accounting policies (continued)
(h) Trade and other receivables (continued)
(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.
(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.
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Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
23 Summary of material accounting policies (continued)
(j) Financial assets (continued)
(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 consolidated 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.
(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 expired, 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 23(p).
Financial report
FORTESCUE FY24 ANNUAL REPORT | 200
Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
23 Summary of material accounting policies (continued)
(l) Property, plant and equipment (continued)
(i) Recognition and measurement (continued)
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 or when doing so results in depreciation
charges that do not reflect the asset’s useful life, 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, unless
doing so results in depreciation charges that do not
reflect the asset’s useful life and the straight-line basis is
the more appropriate method.
The units of production method is an amortised charge
proportional to the depletion of the estimated proven and
probable reserves at the mines.
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Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
23 Summary of material accounting policies (continued)
(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.
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.
Financial report
FORTESCUE FY24 ANNUAL REPORT | 202
Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
23 Summary of material accounting policies (continued)
(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.
(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.
• The Group can identify the component of the ore body
for which access has been improved.
• 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.
The estimated useful lives for the principal categories of
intangible assets amortised on a straight-line basis are as
follows:
• Computer software 3 years
• Patents and licenses 5 to 20 years
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Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
23 Summary of material accounting policies (continued)
(n) Intangible assets (continued)
(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 ability to measure reliably the expenditure during
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 23(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 (CGUs)
for the purpose of impairment testing. The allocation
is made to those CGUs or groups of CGUs that are
expected to benefit from the business combination in
which the goodwill arose.
(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 depreciated 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.
Financial report
FORTESCUE FY24 ANNUAL REPORT | 204
Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
23 Summary of material accounting policies (continued)
(o) Leases (continued)
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 24.
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.
(q) Impairment of non-financial assets
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.
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Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
23 Summary of material accounting policies (continued)
(q) Impairment of non-financial assets (continued)
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 CGUs. CGUs 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.
(r) Finance costs
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.
Financial report
FORTESCUE FY24 ANNUAL REPORT | 206
Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
23 Summary of material accounting policies (continued)
(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.
(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.
Financial report
FORTESCUE FY24 ANNUAL REPORT | 207
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Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
23 Summary of material accounting policies (continued)
(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.
(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 2023 and have been
adopted by the Group. The amendments listed below did
not have any impact on the amounts recognised in prior
periods and are not expected to significantly affect the
current or future periods.
• AASB 2021-2 Amendments to Australian Accounting
Standards – Disclosure of Accounting Policies and
Definition of Accounting Estimates [AASB 7, AASB 101,
AASB 108, AASB 134 & AASB Practice Statement 2]
• AASB 2021-5 Amendments to Australian Accounting
Standards – Deferred Tax related to Assets and
Liabilities arising from a Single Transaction [AASB 112]
• AASB 2023-2 Amendments to Australian Accounting
Standards – International Tax Reform –Pillar Two Model
Rules [AASB 112]
(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 2024 reporting period. These standards and
interpretations have not been early adopted by the
Group. These amendments are not expected to have
a material impact on the entity in the current or future
reporting periods and on foreseeable future transactions.
Financial report
FORTESCUE FY24 ANNUAL REPORT | 208
Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
24 Critical accounting estimates and judgements
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.
(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.
Financial report
FORTESCUE FY24 ANNUAL REPORT | 209
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Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
24 Critical accounting estimates and judgements (continued)
(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.
(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 when the
Group has completed an impairment assessment. 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.
Financial report
FORTESCUE FY24 ANNUAL REPORT | 210
Notes to the consolidated financial statements
For the year ended 30 June 2024
OTHER
24 Critical accounting estimates and judgements (continued)
(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 23(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.
Financial report
FORTESCUE FY24 ANNUAL REPORT | 211
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CONSOLIDATED ENTITY DISCLOSURE STATEMENT
At 30 June 2024
Name of entity
Type of entity
Trustee,
partner or
participant
in JV?i
Place of
incorporation
or formationii
% of issued
capital heldiii
Australian
resident?iv
Place of foreign
residence
(if applicable)v
1
ACRI Industry Solutions Pty Ltd
Body corporate
No
Australia
100%
Yes
2
Argentina Fortescue Future
Industries S.A.
Body corporate
No
Argentina
100%
No
Argentina
3
Argentina Fortescue S.A.U.
Body corporate
No
Argentina
100%
No
Argentina
4
Argentina Minera S.A.
Body corporate
No
Argentina
100%
No
Argentina
5
Australian Fortescue Future
Industries Holdings Pty Ltd
Body corporate
No
Australia
100%
Yes
6
Australian Fortescue Future
Industries Pty Ltd
Body corporate
No
Australia
100%
Yes
7
Belinga Joint Venture Company
Limited
Body corporate
No
United Kingdom
80%
No
United Kingdom
8
Bougainville Fortescue Limited
Body corporate
No
Papua New
Guinea
100%
Yes
9
Brasil Fortescue Mineração
Limitada
Body corporate
No
Brazil
100%
No
Brazil
10
Brasil Fortescue Sustainable
Industries Limitada
Body corporate
No
Brazil
100%
No
Brazil
11
Cameroon Fortescue Future
Industries Ltd
Body corporate
No
Cameroon
100%
No
Cameroon
12
Canada Fortescue Future
Industries Ltd
Body corporate
No
Canada
100%
No
Canada
13
CD Hub Pty Ltd
Body corporate
No
Australia
100%
Yes
14
Chichester Metals Pty Ltd
Body corporate
No
Australia
100%
Yes
15
Chile Fortescue Future Industries
SpA
Body corporate
No
Chile
100%
No
Chile
16
Chile Fortescue SpA
Body corporate
No
Chile
100%
No
Chile
17
Colombia Fortescue SAS
Body corporate
No
Colombia
100%
No
Colombia
18
CSRP Pty Ltd
Body corporate
No
Australia
100%
Yes
19
Democratic Republic of Congo
Fortescue Future Industries Ltd
Body corporate
No
Democratic
Republic of
Congo
100%
No
Democratic
Republic of Congo
20
Ecuador Fortescue S.A.
Body corporate
No
Ecuador
100%
No
Ecuador
21
Energy Resources Fortescue
Future Industries Pty Ltd
Body corporate
No
Australia
100%
Yes
22
FFI Ionix, Inc.
Body corporate
No
United States
100%
No
United States
23
FFI Phoenix Hub Holdings LLC
Body corporate
No
United States
100%
No
United States
24
FFI USA Investments Inc.
Body corporate
No
United States
100%
No
United States
25
FGAM Holdings Inc.
Body corporate
No
United States
100%
No
United States
26
FMG Air Pty Ltd
Body corporate
No
Australia
100%
Yes
27
FMG America Finance Inc.
Body corporate
No
United States
100%
Yes
Basis of preparation
The consolidated entity disclosure statement has been prepared in accordance with subsection 295(3A) of the Corporations
Act 2001. The entities listed in the statement are Fortescue Ltd and all its controlled entities in accordance with AASB 10
Consolidated Financial Statements.
Financial report
FORTESCUE FY24 ANNUAL REPORT | 212
CONSOLIDATED ENTITY DISCLOSURE STATEMENT (CONTINUED)
At 30 June 2024
Name of entity
Type of entity
Trustee,
partner or
participant
in JV?i
Place of
incorporation
or formationii
% of issued
capital heldiii
Australian
resident?iv
Place of foreign
residence
(if applicable)v
28
FMG Ashburton Pty Ltd
Body corporate
No
Australia
100%
Yes
29
FMG Autonomy Pty Ltd
Body corporate
No
Australia
100%
Yes
30
FMG Chichester Personnel Pty
Ltd
Body corporate
No
Australia
100%
Yes
31
FMG Clean Energy Pty Ltd
Body corporate
No
Australia
100%
Yes
32
FMG Colombia Operations PTE
LTD
Body corporate
No
Singapore
100%
No
Singapore
33
FMG Ecuador Operations PTE
LTD
Body corporate
No
Singapore
100%
No
Singapore
34
FMG Ecuador Tenements PTE
LTD
Body corporate
No
Singapore
100%
No
Singapore
35
FMG Employee Share Trust
Trust
No
N/A
N/A
Yes
36
FMG Exploration Pty Ltd
Body corporate
No
Australia
100%
Yes
37
FMG Hong Kong Shipping Ltd
Body corporate
No
Hong Kong
100%
No
Hong Kong
38
FMG Insurance Singapore Pte Ltd
Body corporate
No
Singapore
100%
No
Singapore
39
FMG International Exploration
PTE LTD
Body corporate
No
Singapore
100%
No
Singapore
40
FMG International Pte Ltd
Body corporate
No
Singapore
100%
No
Singapore
41
FMG International Shipping Pte
Ltd
Body corporate
No
Singapore
100%
No
Singapore
42
FMG IOC Pty Ltd
Body corporate
No
Australia
100%
Yes
43
FMG Iron Bridge (Aust) Pty Ltd
Body corporate
No
Australia
100%
Yes
44
FMG Iron Bridge Limited
Body corporate
No
Hong Kong
100%
Yes
45
FMG JV Company Pty Ltd
Body corporate
No
Australia
100%
Yes
46
FMG Magnetite Pty Ltd
Body corporate
Yes
Australia
100%
Yes
47
FMG North Pilbara Pty Ltd
Body corporate
No
Australia
100%
Yes
48
FMG Nullagine Pty Ltd
Body corporate
No
Australia
100%
Yes
49
FMG Nyidinghu Pty Ltd
Body corporate
No
Australia
100%
Yes
50
FMG Personnel Pty Ltd
Body corporate
No
Australia
100%
Yes
51
FMG Personnel Services Pty Ltd
Body corporate
No
Australia
100%
Yes
52
FMG Pilbara Pty Ltd
Body corporate
No
Australia
100%
Yes
53
FMG Procurement Services Pty
Ltd
Body corporate
No
Australia
100%
Yes
54
FMG Resources (August 2006)
Pty Ltd
Body corporate
No
Australia
100%
Yes
55
FMG Resources Pty Ltd
Body corporate
No
Australia
100%
Yes
56
FMG Solomon Pty Ltd
Body corporate
No
Australia
100%
Yes
57
FMG South America Pte Ltd
Body corporate
No
Singapore
100%
No
Singapore
58
FMG Trading Shanghai Co., Ltd
Body corporate
No
China
100%
Yes
Financial report
FORTESCUE FY24 ANNUAL REPORT | 213
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Directors’ report
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directory
Operating and
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CONSOLIDATED ENTITY DISCLOSURE STATEMENT (CONTINUED)
At 30 June 2024
Name of entity
Type of entity
Trustee,
partner or
participant
in JV?i
Place of
incorporation
or formationii
% of issued
capital heldiii
Australian
resident?iv
Place of foreign
residence
(if applicable)v
59
FMG Training Pty Ltd
Body corporate
No
Australia
100%
Yes
60
Fortescue Canada Limited
Body corporate
No
Canada
100%
Yes
61
Fortescue Capital Pty Ltd
Body corporate
No
Australia
100%
Yes
62
Fortescue Energy Hong Kong
Investments Limited
Body corporate
No
Hong Kong
100%
No
Hong Kong
63
Fortescue Energy Pty Ltd
Body corporate
No
Australia
100%
Yes
64
Fortescue Energy Ventures
Limited
Body corporate
No
United Kingdom
100%
No
United Kingdom
65
Fortescue Future Chemicals
Manufacturing Ethiopia PLC
Body corporate
No
Ethiopia
100%
No
Ethiopia
66
Fortescue Future Industries
International Pty Ltd
Body corporate
No
Australia
100%
Yes
67
Fortescue Future Industries
Kenya Ltd
Body corporate
No
Kenya
100%
No
Kenya
68
Fortescue Future Industries
Middle East Management Limited
Body corporate
No
United Arab
Emirates
100%
No
United Arab
Emirates
69
Fortescue Future Industries
Namibia (Proprietary) Limited
Body corporate
No
Namibia
100%
No
Namibia
70
Fortescue Future Industries Pty
Ltd
Body corporate
No
Australia
100%
Yes
71
Fortescue Future Industries Pty
Ltd PSC (Jordan)
Body corporate
No
Jordan
100%
No
Jordan
72
Fortescue Future Industries
Scotland Limited
Body corporate
No
United Kingdom
100%
No
United Kingdom
73
Fortescue Future Industries
Technologies Pty Ltd
Body corporate
No
Australia
100%
Yes
74
Fortescue Future Industries
United Kingdom Holdings
Limited
Body corporate
No
United Kingdom
100%
No
United Kingdom
75
Fortescue Global Asset
Management LLC
Body corporate
No
United States
100%
No
United States
76
Fortescue Green Technologies
Pty Ltd
Body corporate
No
Australia
100%
Yes
77
Fortescue Hydrogen Systems
Australia Pty Ltd
Body corporate
No
Australia
100%
Yes
78
Fortescue Hydrogen Technology
(Hefei) Limited
Body corporate
No
China
100%
No
China
79
Fortescue International
Marketing Pte Ltd
Body corporate
No
Singapore
100%
No
Singapore
80
Fortescue Ltd
Body corporate
No
Australia
100%
Yes
81
Fortescue Metals Pty Ltd
Body corporate
No
Australia
100%
Yes
82
Fortescue One Pty Ltd
Body corporate
No
Australia
100%
Yes
83
Fortescue Services Pty Ltd
Body corporate
No
Australia
100%
Yes
84
Fortescue UK Services Limited
Body corporate
No
United Kingdom
100%
No
United Kingdom
85
Fortescue WAE Pty Ltd
Body corporate
No
Australia
100%
Yes
86
Fortescue Zero Limited
Body corporate
No
United Kingdom
100%
No
United Kingdom
87
Gibson Island FFI Holdings Pty
Ltd
Body corporate
No
Australia
100%
Yes
88
Gibson Island H² Pty Ltd
Body corporate
No
Australia
100%
Yes
Financial report
FORTESCUE FY24 ANNUAL REPORT | 214
CONSOLIDATED ENTITY DISCLOSURE STATEMENT (CONTINUED)
At 30 June 2024
Name of entity
Type of entity
Trustee,
partner or
participant
in JV?i
Place of
incorporation
or formationii
% of issued
capital heldiii
Australian
resident?iv
Place of foreign
residence
(if applicable)v
89
Gibson Island NH³ Pty Ltd
Body corporate
No
Australia
100%
Yes
90
Gladstone H² Pty Ltd
Body corporate
No
Australia
100%
Yes
91
Greenland Fortescue A/S
Body corporate
No
Greenland
100%
No
Greenland
92
Holmaneset H2 AS
Body corporate
No
Norway
100%
No
Norway
93
IB Operations Pty Ltd
Body corporate
No
Australia
69%
Yes
94
International Bulk Ports Pty Ltd
Body corporate
No
Australia
100%
Yes
95
IRBR Pty Ltd
Body corporate
No
Australia
100%
Yes
96
Ivindo Iron SA
Body corporate
No
Gabon
72%
No
Gabon
97
Karribi Developments Pty Ltd
Body corporate
No
Australia
100%
Yes
98
Kazahkstan Fortescue LLP
Body corporate
Yes
Kazakhstan
100%
No
Kazakhstan
99
Kazakhstan Fortescue Future
Industries Limited
Body corporate
No
Kazakhstan
100%
No
Kazakhstan
100
Kazakhstan Fortescue
Operations LLP
Body corporate
Yes
Kazakhstan
100%
No
Kazakhstan
101
Masters Way Homes Pty Ltd
Body corporate
Yes
Australia
100%
Yes
102
MIH2 Pty Ltd
Body corporate
No
Australia
100%
Yes
103
MIH2 USA People, Inc.
Body corporate
No
United States
100%
No
United States
104
MIH2 USA, LLC
Body corporate
No
United States
100%
No
United States
105
Mula Hemnes H2 AS
Body corporate
No
Norway
100%
No
Norway
106
Nascent Exploration Pty Ltd
Body corporate
No
Australia
100%
Yes
107
Net Zero Holdings Pty Ltd
Body corporate
No
Australia
100%
Yes
108
Netherlands Fortescue Future
Industries Holdings B.V.
Body corporate
No
Netherlands
100%
No
Netherlands
109
New Zealand Fortescue Future
Industries Limited
Body corporate
No
New Zealand
100%
Yes
110
Norway FFI Holdings AS
Body corporate
No
Norway
100%
No
Norway
111
Papua New Guinea Fortescue
Future Industries Ltd
Body corporate
No
Papua New
Guinea
100%
No
Papua New Guinea
112
Peru Fortescue SAC
Body corporate
No
Peru
100%
No
Peru
113
Phoenix Hydrogen Hub LLC
Body corporate
No
United States
100%
No
United States
114
Pilbara Energy (Generation) Pty
Ltd
Body corporate
No
Australia
100%
Yes
115
Pilbara Energy Company Pty Ltd
Body corporate
No
Australia
100%
Yes
116
Pilbara Gas Pipeline Pty Ltd
Body corporate
No
Australia
100%
Yes
117
Pilbara Green Energy Company
Pty Ltd
Body corporate
No
Australia
100%
Yes
118
Pilbara Housing Services Pty Ltd
Body corporate
Yes
Australia
100%
Yes
119
Pilbara Iron Ore Pty Ltd
Body corporate
No
Australia
100%
Yes
Financial report
FORTESCUE FY24 ANNUAL REPORT | 215
Overview
Ore Reserves and
Mineral Resources
Our approach
to sustainability
climate change
report
Directors’ report
| Remuneration
Report
Corporate
governance
Corporate
directory
Operating and
financial review
CONSOLIDATED ENTITY DISCLOSURE STATEMENT (CONTINUED)
At 30 June 2024
Name of entity
Type of entity
Trustee,
partner or
participant
in JV?i
Place of
incorporation
or formationii
% of issued
capital heldiii
Australian
resident?iv
Place of foreign
residence
(if applicable)v
120
Pilbara Marine Pty Ltd
Body corporate
No
Australia
100%
Yes
121
Pilbara Mining Alliance Pty Ltd
Body corporate
No
Australia
100%
Yes
122
Pilbara Power Pty Ltd
Body corporate
No
Australia
100%
Yes
123
Pilbara Water and Power Pty Ltd
Body corporate
No
Australia
69%
Yes
124
Portugal Fortescue Unipessoal
LDA
Body corporate
No
Portugal
100%
Yes
125
Prairie Renewable Energy Farm
Pty Ltd
Body corporate
No
Australia
100%
Yes
126
PSV Leveque Pte Ltd
Body corporate
No
Singapore
100%
No
Singapore
127
PT Indonesia Fortescue
Infrastructure
Body corporate
No
Indonesia
100%
No
Indonesia
128
PT Indonesia Papua Fortescue
Future Industries
Body corporate
No
Indonesia
100%
No
Indonesia
129
RZ Net Pty Ltd
Body corporate
No
Australia
100%
Yes
130
South Africa Fortescue Future
Industries (Pty) Ltd
Body corporate
No
South Africa
100%
No
South Africa
131
Southern Cross Wind Pty Ltd
Body corporate
No
Australia
100%
Yes
132
SS IB Pty Ltd
Body corporate
No
Australia
100%
Yes
133
Tasmania H2 Pty Ltd
Body corporate
No
Australia
100%
Yes
134
The Fortescue Employee
Housing Plan Trust
Trust
No
N/A
N/A
Yes
135
The Master Way Homes Unit
Trust
Trust
No
N/A
N/A
Yes
136
The Pilbara Infrastructure Pty
Ltd
Body corporate
No
Australia
100%
Yes
137
Toowong Process Pty Ltd
Body corporate
No
Australia
100%
Yes
138
USA Fortescue Battery
Holdings LLC
Body corporate
No
United States
100%
No
United States
139
USA Fortescue Energy
Development LLC
Body corporate
No
United States
100%
No
United States
140
USA Fortescue Energy Holdings
LLC
Body corporate
No
United States
100%
No
United States
141
USA Fortescue Facilities LLC
Body corporate
No
United States
100%
No
United States
142
USA Fortescue Future
Industries LLC
Body corporate
No
United States
100%
No
United States
143
USA Fortescue Holdings Inc.
Body corporate
No
United States
100%
No
United States
144
USA Fortescue Hydrogen
Systems Holdings LLC
Body corporate
No
United States
100%
No
United States
145
USA Fortescue IP, Inc.
Body corporate
No
United States
100%
No
United States
146
USA Fortescue Manufacturing
Holdings LLC
Body corporate
No
United States
100%
No
United States
147
USA Fortescue MIH2 Holdings
LLC
Body corporate
No
United States
100%
No
United States
148
USA Fortescue Piquette LLC
Body corporate
No
United States
100%
No
United States
149
Viridi S.A.
Body corporate
No
Argentina
100%
No
Argentina
Financial report
FORTESCUE FY24 ANNUAL REPORT | 216
CONSOLIDATED ENTITY DISCLOSURE STATEMENT (CONTINUED)
At 30 June 2024
Name of entity
Type of entity
Trustee,
partner or
participant
in JV?i
Place of
incorporation
or formationii
% of issued
capital
heldiii
Australian
resident?iv
Place of foreign
residence
(if applicable)v
150
VTEC Services Pty Ltd
Body corporate
No
Australia
100%
Yes
151
W Hub Pty Ltd
Body corporate
No
Australia
100%
Yes
152
WAE Joint Ventures Limited
Body corporate
No
United Kingdom
100%
No
United Kingdom
153
WAE Technologies Australia
Pty Ltd
Body corporate
No
Australia
100%
Yes
154
WAE Technologies Deutschland
GmbH
Body corporate
No
Germany
100%
No
Germany
155
WAE Technologies US LLC
Body corporate
No
United States
100%
No
United States
156
WAE Ventures Limited
Body corporate
No
United Kingdom
100%
No
United Kingdom
157
Wongalee Renewable Energy
Farm Pty Ltd
Body corporate
No
Australia
100%
Yes
158
Zambia Fortescue Limited
Body corporate
No
Zambia
100%
No
Zambia
i This item addresses whether, at 30 June 2024, the relevant entity was a trustee of a trust within the consolidated entity, a partner in a partnership within
the consolidated entity, or a participant in a joint venture within the consolidated entity.
ii For entities that are bodies corporate, this item discloses the place at which the entity was incorporated or formed. This disclosure is not required for
entities that are not bodies corporate.
iii This item states the percentage of the entity’s issued share capital (excluding any part that carries no right to participate beyond a specified amount in
a distribution of either profits or capital) that was held, directly or indirectly, by Fortescue Ltd at 30 June 2024. This disclosure is not required for entities
that are not bodies corporate.
iv For each entity, this item discloses whether the entity was an Australian resident (within the meaning of the Income Tax Assessment Act 1997) as at
30 June 2024. If an entity is disclosed as not being an Australian resident, the entity was a foreign resident (within the meaning of the Income Tax
Assessment Act 1997) at 30 June 2024. For entities that are not bodies corporate (i.e. partnerships and trusts), this disclosure has been prepared based
on where the entity’s central management and control was located as at 30 June 2024.
v For entities that were disclosed as foreign resident according to the previous item, this item discloses the jurisdiction outside of Australia in which the
entity was a resident for the purposes of the income tax law of the relevant jurisdiction. For entities that were Australian resident (within the meaning of
the Income Tax Assessment Act 1997) that are also resident in foreign jurisdictions (i.e. dual resident companies), the Corporations Act 2001 does not
require disclosure of their places of foreign residence.
FORTESCUE FY24 ANNUAL REPORT | 217
DIRECTORS’ DECLARATION
In the Directors’ opinion:
(a) the financial statements and notes set out on pages 150 to 210 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 2024 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) the consolidated entity disclosure statement on pages 211 to 216 required by subsection 295(3A) of the
Corporations Act 2001 is true and correct, and
(d) 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 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 Group 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 2024.
FORTESCUE FY24 ANNUAL REPORT | 218
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, Level 15, 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.
Auditor’s Independence Declaration
As lead auditor for the audit of Fortescue Ltd for the year ended 30 June 2024, 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 Ltd and the entities it controlled during the period.
Chris Dodd
Perth
Partner
PricewaterhouseCoopers
28 August 2024
FORTESCUE FY24 ANNUAL REPORT | 219
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
Liability limited by a scheme approved under Professional Standards Legislation.
Independent auditor’s report
To the members of Fortescue Ltd
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Fortescue 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 2024 and of its
financial performance for the year then ended
(b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The financial report comprises:
•
the consolidated statement of financial position as at 30 June 2024
•
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, including material accounting policy
information and other explanatory information
•
the consolidated entity disclosure statement as at 30 June 2024
•
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.
FORTESCUE FY24 ANNUAL REPORT | 220
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.
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 and
energy operations.
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, Finance and Risk Management Committee.
Key audit matter
How our audit addressed the key audit matter
Operating sales revenue – iron ore and
shipping revenue
(Refer to note 3 and 24(f))
The Group recognised iron ore revenue of
US$16,405 million and shipping revenue of
US$1,613 million for the year ended 30 June
2024.
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
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
Directors’ report
| Remuneration
Report
FORTESCUE FY24 ANNUAL REPORT | 221
Operating and
financial review
Ore Reserves and
Mineral Resources
Our approach
to sustainability
climate change
report
Corporate
governance
Corporate
directory
Overview
Financial report
Key audit matter
How our audit addressed the key audit matter
comprise two parts:
(1) Iron ore revenue and shipping revenue
recognised at the bill of lading date at current
prices; and
(2) 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.
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 24(e))
The Group recognised provisions for restoration
and rehabilitation obligations of US$1,028 million
as at 30 June 2024.
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.
To assess the Group’s restoration and
rehabilitation obligations, we performed the
following audit procedures, amongst others:
•
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
FORTESCUE FY24 ANNUAL REPORT | 222
Key audit matter
How our audit addressed the key audit matter
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.
Impairment indicator assessment for the Iron
Bridge Cash Generating unit (CGU)
(Refer to note12(a) and 24(d(i)))
In accordance with Australian 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.
For the financial year ended 30 June 2024, the
Group’s assessment of the Iron Bridge CGU
identified no indicators of impairment and
concluded that an impairment test was not
required.
We consider the impairment indicator assessment
a key audit matter given the significance of Iron
Bridge CGU assets to the consolidated statement
of financial position and significant judgement is
required to assess whether there are any
indicators of impairment by reviewing iron ore
prices, exchange rates, discount rates and other
inputs.
To evaluate the Group’s impairment indicator
assessment of the Iron Bridge CGU we
performed the following procedures amongst
others :
•
Developed an understanding of the process
by which the Group conducted the
impairment indicator assessment and
whether it was appropriate under the
Australian Accounting Standards.
•
Assisted by PwC valuation experts in
aspects of our work, performed an
independent assessment of indicators of
impairment, by:
-
considering future iron ore prices,
exchange rates and other inputs, by
reviewing both internal information and
that published by external economic
and industry analysts and participants;
-
comparing the discount rate used by
the Group to market data and industry
research; and
-
evaluating the completeness of the
Group’s assessment of whether there
were any other external or internal
sources of information that could
indicate that the Iron Bridge CGU may
be impaired.
•
We have assessed the disclosures made in
the financial report against the requirements
of Australian Accounting Standards.
Operating and
financial review
Ore Reserves and
Mineral Resources
Our approach
to sustainability
climate change
report
Corporate
governance
Corporate
directory
Overview
Financial report
Overview
Operating and
financial review
Ore Reserves and
Mineral Resources
climate change
report
Directors’ report
| Remuneration
Report
Financial report
Corporate
directory
FORTESCUE FY24 ANNUAL REPORT | 223
Our approach
to sustainability
Corporate
governance
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 2024, 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 Allocation Reporting.
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 in accordance
with Australian Accounting Standards and the Corporations Act 2001, including giving a true and fair
view, and for such internal control as the directors determine is necessary to enable the preparation of
the financial report that 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.
FORTESCUE FY24 ANNUAL REPORT | 224
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in the directors’ report for the year ended 30 June
2024.
In our opinion, the remuneration report of Fortescue Ltd for the year ended 30 June 2024 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
Perth
Partner
28 August 2024
Operating and
financial review
Ore Reserves and
Mineral Resources
Our approach
to sustainability
climate change
report
Directors’ report
| Remuneration
Report
Financial report
Corporate
governance
Overview
Financial report
Corporate
directory
FORTESCUE FY24 ANNUAL REPORT | 225
Overview
Operating and
financial review
Ore Reserves and
Mineral Resources
climate change
report
Directors’ report
| Remuneration
Report
CORPORATE
DIRECTORY
1 Megawatt PEM
Electrolyser
Corporate
governance
Our approach
to sustainability
Corporate directory
FORTESCUE FY24 ANNUAL REPORT | 226
Top 20 holders of ordinary shares at 23 August 2024
Rank
Name
Shares number
% of issued capital
1
HSBC Custody Nominees (Australia) Limited
1,479,703,054
48.06
2
J P Morgan Nominees Australia Pty Limited
290,350,329
9.43
3
Valin Investments (Singapore) Pte Ltd
228,007,497
7.41
4
Tattarang Pty Ltd
176,522,507
5.73
5
Citicorp Nominees Pty Limited
139,367,622
4.53
6
Emichrome Pty Ltd
93,045,000
3.02
7
Valin Resources Investments (Singapore) Pte Ltd
37,876,216
1.23
8
BNP Paribas Noms Pty Ltd
31,572,883
1.03
9
BNP Paribas Nominees Pty Ltd
20,414,540
0.66
10
Pacific Custodians Pty Limited
19,870,700
0.65
11
National Nominees Limited
19,305,297
0.63
12
Citicorp Nominees Pty Limited
17,600,389
0.57
13
Pacific Custodians Pty Limited
15,165,269
0.49
14
BNP Paribas Nominees Pty Ltd
13,612,508
0.44
15
HSBC Custody Nominees (Australia) Limited
12,245,069
0.40
16
Invia Custodian Pty Limited
8,244,951
0.27
17
Citicorp Nominess Pty Limited
5,188,830
0.17
18
HSBC Custody Nominees (Australia) Limited
4,446,793
0.14
19
Mr John William Cunningham
4,000,000
0.13
20
HSBC Custody Nominees (Australia) Limited
3,939,825
0.13
2,620,479,279
85.11
Substantial holders
Rank Name
Shares number
% of issued capital
1
Tattarang Pty Ltd, Minderoo Foundation Limited, Nicola
Margaret Forrest and John Andrew Henry Forrest
1,131,365,000
36.74
2
Hunan Valin Iron and Steel Group Company
267,395,477
8.68
Range
Shareholders number
1 to 1,000
111,876
1,001 to 5,000
43,840
5,001 to 10,000
8,511
10,001 to 100,000
6,032
100,001 and Over
292
Total
170,551
Unmarketable parcels
There were 7,053 members holding less than a marketable parcel of share in the Company.
Corporate
directory
FORTESCUE FY24 ANNUAL REPORT | 227
Operating and
financial review
Ore Reserves and
Mineral Resources
Our approach
to sustainability
climate change
report
Directors’ report
| Remuneration
Report
Financial report
Corporate
governance
Overview
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, Level 15, 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
To: The Board of Directors of Fortescue Ltd
Independent assurance report on identified Subject Matter Information
in Fortescue Ltd’s FY24 Annual Report
The Board of Directors of Fortescue Ltd engaged us to perform an independent limited assurance
engagement in respect of the Eligible Project Cumulative Spend as at 30 June 2024 (the “Subject
Matter”) as listed in the Fortescue Ltd (the Company) and its controlled entities’ (together the Group)
FY24 Annual Report.
Subject Matter Information and Criteria
The Subject Matter Information is set out in the table below:
Table 1 – Subject Matter Information
Eligible Project
Eligible Category
Cumulative Spend
as at 30 June 2024
US$m
Fortescue WAE battery systems
Energy storage
205
Pilbara Generation Project
Renewable energy
161
Pilbara Transmission Project
Renewable energy
183
Green Fleet Energy Hub
Clean transportation
65
Battery Electric Locomotives
Clean transportation
16
Total allocated
630
The criteria (the “Criteria”) against which we assessed the Subject Matter is the basis of preparation
set out on page 41 of the Operating and financial review in the Fortescue FY24 Annual Report.
The maintenance and integrity of the Group’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 the Group’s website.
Our assurance conclusion is with respect to the Subject Matter Information as at 30 June 2024, and
does not extend to any other information included in, or linked from, the Fortescue FY24 Annual
Report including any images, audio files or videos.
FORTESCUE FY24 ANNUAL REPORT | 228
FORTESCUE FY23 ANNUAL REPORT | 228
Responsibilities of Management
The Group’s management is responsible for the Subject Matter and for the preparation of the Subject
Matter 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 the Group 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 management
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.
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
has not been prepared, in all material respects, in accordance with the Criteria as at 30 June 2024.
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.
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In carrying out our limited assurance engagement we:
•
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 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 appropriateness of selected estimates,
assumptions and methodologies applied by management in 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.
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 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 has not been prepared, in all material respects, in accordance with the
Criteria as at 30 June 2024.
Emphasis of matter
The basis of preparation of the Pilbara Transmission Project was amended in FY24.
We draw attention to basis of preparation on page 41 which sets out the amendment to the calculation
methodology in FY24 and the resultant impact to the cumulative spend of the Pilbara Transmission
Project. Our conclusion is not modified in respect of this matter.
FORTESCUE FY24 ANNUAL REPORT | 230
Use and distribution of our report
We were engaged by the board of directors of Fortescue Ltd to prepare this independent assurance
report having regard to the criteria specified by the Group and set out in this report. This report was
prepared solely for Fortescue Ltd to assist the directors in responding to their governance
responsibilities by obtaining an limited assurance report in connection with the Subject Matter
Information and may not be suitable for any other purpose.
We accept no duty, responsibility or liability to anyone other than the Group in connection with this
report or to the Group 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 the Group and if anyone other than the Group 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 the Group receiving
or using this report.
PricewaterhouseCoopers
Chris Dodd
Perth
Partner
28 August 2024
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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.
ASRS
Australian Sustainability Reporting
Standard ED-SR1, a draft of new
mandatory disclosure requirements
issued by the Australian Accounting
Standards Board (AASB), effective from
FY26.
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-e
When we refer to emissions, this
includes all greenhouse gas emissions,
reported in the unit of million tonnes
of carbon dioxide equivalent (CO2-e).
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. CO2-e
is the universal unit of measurement
to indicate the aggregate carbon
dioxide equivalent emissions of carbon
dioxide (CO2), methane, nitrous oxide,
hydrofluorocarbons, perfluorocarbons
and sulphur hexafluoride.
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.
Emissions intensity
Amount of greenhouse gas emissions
produced per unit of economic output.
dmt
Dry metric tonne.
Fe
The chemical symbol for iron.
FFI
Fortescue Future Industries Pty Ltd.
FID
Final Investment Decision, marks the
transition from project development
and feasibility studies to the actual
implementation and construction
phase.
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 Ltd (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, is 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
Fortescue defines ‘green iron’ as the end
product resulting from processing iron
ore into iron, using renewable energy and
with near zero carbon emissions.
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
Fortescue defines ‘green metal’ as metal
ore mined and processed into metal
using renewable energy and with near
zero carbon emissions. This green metal
definition similarly applies to processing
iron ore into iron.
Green metallic iron
Metallic iron made through the reduction
of iron ore using 100 per cent 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 per cent renewable energy.
GJ
Gigajoules, or 1,000,000,000 joules.
GW
Giga watt, or 1,000,000,000 watts.
GWh
Giga watt hours.
Ha
Hectares.
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HME
Heavy Mining Equipment, includes
large machinery used for the
extraction, transportation, and
processing of iron ore, such as diggers,
excavators, haul trucks and drilling
units.
Hematite
An iron ore compound with an average
iron content of between 57 per cent
and 63 per cent 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.
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.
IPCC
Intergovernmental Panel on Climate
Change, a United Nations body that
assesses the science related to climate
change, providing policymakers with
regular scientific assessments and
guidance on climate-related issues.
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.
LCA
Life cycle assessment.
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.
MW
Mega watt, or 1,000,000 watts.
MWh
Mega watt hours.
Net gearing
(Debt - cash) / (debt - cash + equity).
NPAT
Net profit after tax.
OEM
Original Equipment Manufacturers.
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.
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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.
Scope 1 emissions
Scope 1 emissions are direct emissions
that are from sources owned or
controlled by an entity.
Scope 2 emissions
Scope 2 refers to emissions associated
with the production of electricity, heat,
or steam purchased by an entity.
Scope 3 emissions
Scope 3 refers to all other indirect
emissions associated with activities
or facilities not owned or controlled by
the entity, including both upstream and
downstream emissions.
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.
TCFD
The Taskforce on Climate-related
Financial Disclosures, which the
Financial Stability Board established
to develop recommendations for more
effective climate-related disclosures
that enable a better understanding of
carbon related assets and exposures to
climate-related risks.
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.
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 Firetail,
Kings and Queens, Eliwana and Flying
Fish deposits.
wmt
Wet metric tonne.
Zero emissions
When used in relation to vehicles
means that (a) a vehicle’s exhaust
only emits water vapour when in
operation or (b) the vehicle is battery
electric powered without any exhaust
emissions.
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 refers to no fossil fuels and
no offsets. Fortescue has a plan to
decarbonise our Australian terrestrial
iron ore operations (Scope 1 and
2) in the Pilbara by 2030. We have
identified the solutions needed to
eliminate approximately 90 per cent
of terrestrial Scope 1 and 2 emissions
from our Australian iron ore operations
and are actively working to identify
solutions for the final approximately
10 per cent. 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. 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.
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.
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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, or other
epidemic or 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.
FORTESCUE FY24 ANNUAL REPORT | 235
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