FMG - Fortescue Ltd

[over9k]

since we are in ' uncharted territory ' i have NO idea what the market will look like in 10 years

i can guess , but there is some chance i don't even go close

our biggest customer might well be Vietnam , India , less likely Mexico , and Pakistan , over maybe even Indonesia which MIGHT become a center for metal smelting , and then on-selling bar-stock or ingots

Baby bust = economic armageddon.

Any country with an inverted population pyramid has no choice but to export to markets as it essentially doesn't have an internal one (or at least, nothing near what it otherwise would be). It is for this reason why countries like japan or south korea didn't fall over years ago.

But with the whole world having a baby bust, there's vanishingly few young people to even export to, with three notable exceptions of USA, Mexico, India.


And it makes so, so, so much more sense to build where you sell (if you can).

 

[divs4ever]

China is trying to reverse that baby drought ( that it actually deliberately created )

so let's add China as a 'maybe '

and that China policy will be one for younger members to watch , because as sure as heck someone else will try it later ( whether it is a success or not )

time will tell if sense returns to this world , because it sure isn't common at the moment

 

[divs4ever]

South Korea still has a lifeline with a North Korea unification ( but do NOT expect that unification to be simple or painless )

think Germany after the fall of the Berlin Wall but several times worse

 

[over9k]

China is trying to reverse that baby drought ( that it actually deliberately created )

so let's add China as a 'maybe '

and that China policy will be one for younger members to watch , because as sure as heck someone else will try it later ( whether it is a success or not )

time will tell if sense returns to this world , because it sure isn't common at the moment

Takes 25 years (and 9 months) to make a 25 year old.

 

[divs4ever]

yes but that pause in population increase , might be just what China needed ( or they have stuffed it up big time )

maybe enough to lose No. 1 spot to India well before expected

but currently the US is allegedly No. 1 and working damn hard to lose that spot

 

[Smurf1976]

There were other options available but they went with USA.

Again, there is a reason.

The USA has a lot of advantages over many other countries. Some that come to mind, in no particular order:

1. Economical and in most cases reliable infrastructure in particular energy and transport.

2. Relative political stability at all levels.

3. Moderate levels of taxation.

4. Large and growing domestic market. Make it where you sell it is the new trend.

5. Established diverse economy - finding someone who can do x is not overly difficult whereas it may actually be impossible in some countries.

 

[qldfrog]

The USA has a lot of advantages over many other countries. Some that come to mind, in no particular order:

1. Economical and in most cases reliable infrastructure in particular energy and transport.

2. Relative political stability at all levels.

3. Moderate levels of taxation.

4. Large and growing domestic market. Make it where you sell it is the new trend.

5. Established diverse economy - finding someone who can do x is not overly difficult whereas it may actually be impossible in some countries.

Sadly,it is trying very hard to destroy its advantages
Freedom and taxes first, abysmal education and health systems, law system getting very much not only very unfair but also very counterproductive with litigation.
Add removal of the american miracle with both old money and social/racist criteria locking your ascention there: better not be male and white/asian if you are not son of.....
And with now open borders,killing its emigration advantage:
Piling up on uneducated workforce it doesn't need anymore while at the same time being less attractive to world PhDs and scientists engineers.
Stiil speaking English .for how long? And the best place for entrepreneurs
Not good now but with a proper economic recession ,góod state policies and a reset But NOT the Reset, it could be a Phoenix.just remember the US under Carter...
EU was gloating the fall of the capitalist fortress and how France Germany Italy and Spain were better with their socialist model and union.I was there and travelled the US then.
.Fast forward 40y.....
So they can still have a chance if China **** up...which is not impossible,.but unlikely IMHO.
And China first is key for FMG/iron ore.
The issue i have with the optimistic view is that China has taken over Africa, with a state capitalist view there,so China will both secure the place and build infrastructure to enable its companies to secure the mineral and agricultural resources there.
In direct competition with us...
We'd better pray that India can sort its ****.....but i am not an optimistic by nature

 

[over9k]

The USA has a lot of advantages over many other countries. Some that come to mind, in no particular order:

1. Economical and in most cases reliable infrastructure in particular energy and transport.

2. Relative political stability at all levels.

3. Moderate levels of taxation.

4. Large and growing domestic market. Make it where you sell it is the new trend.

5. Established diverse economy - finding someone who can do x is not overly difficult whereas it may actually be impossible in some countries.

Sure, but they already had the chile mine BEFORE they had the U.S one. Why not just dig another one in chile? It was clearly the better option.

Right?

 

[Value Collector]

Unless you're expecting your market a decade from now to look VERY different to your market now


The reason why RIO have opened up this mine in the USA is the same reason why car manufacturers are opening plants in mexico and chip manufacturers are building plants in arizona: Anticipation of what their future market will look like (and where it will be).

When you think about how many people are in asia vs usa, it doesn't make sense to ship the chips across the pacific to get to your target market does it?

Unless, of course, asia isn't going to be your target market.

It comes back to cost of production, they will mine where ever they believe the cost of production will be the lowest over the life of the mine.

The cost of shipping mine products to market is a very small part of the over all cost.

The USA would actually have some significant advantages to Chile is the cost of production.

 

[Value Collector]

Sure, but they already had the chile mine BEFORE they had the U.S one. Why not just dig another one in chile? It was clearly the better option.

Right?

Rio’s Chile mines are a 50/50 Joint venture with BHP I believe.

but as I said before, do you know if they have a large virgin deposit of equal size and quality to the USA one?

 

[joeno]

View attachment 129547

But:

View attachment 129544

Side by side:

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However:

View attachment 129543

View attachment 129546


The result of all of this is that 95% of my money is no longer in Australian investments and the tiny bit that remains is in pure degen spec plays like DEG.

India doesn't need Australia's iron ore like china does for a whole multitude of reasons (india is not the world's workshop for one and for two, it can largely mine its own). However, even ignoring that, you still have a massive baby bust in literally the entire rest of the world aside from the USA.

The *world* has long since passed peak consumption. We're now in what the political spin doctors have decided to dub "post growth economies".



Not to be awful here but if you don't understand the significance of the charts I've posted above/don't know what they're telling you, then you don't know what you're doing investing. I don't own FMG but I'd want to be pretty bloody confident of where their demand is going to continue to come from because China isn't it.

Oversimplified insights from someone who has an extremely pessimistic view of China from memory. You could've posted the same thing 20 years ago when there was minimal Chinese demand and said that it was going to be going nowhere. It is misleading and taking into your own political persuasions and emotional charges biases. This is evidenced in the times you accused me of being a China fanboy when I simply questioned your logic.

You need to understand the value of iron ore. Not iron ore demand. Iron / steel is valuable from the PoV of elements in the soil of Earth and in terms of its place on the periodic table. It is used to build buildings taller than a couple of stories and is used for cars, machinery, utensils etc. For what it does and it's intrinsic chemical value, a kg of iron is a bargain.

I bought in at $1.70. There were haters then who said $2 was too much. Now $20 is too little

 

[divs4ever]

** I bought in at $1.70. There were haters then who said $2 was too much. Now $20 is too little **

fair enough you have got me on that one


good stock picking though

cheers

 

[basilio]

After the record profit announcment Twiggy is totally adamant that FMG is pivoting to being a world leader in renewable energy. He is asking all political parties to set stretch targets for zero emissions. FMG wants to do this by 2030. Also "demands" other leading mining companies follow suit.

He sees FMG engineering skills, massive industrial base and large cash reserves as the fuel to demonstrate green industry, reduce FMG costs and attract international partners for his Fortesque Future Industries projects
No shrinking violet either...

Fortescue says government action on climate ‘critical’

Fortescue chairman Andrew Forrest has challenged the Morrison government to set the sort of ambitious targets seen in corporate Australia.

www.afr.com

 

[basilio]

Further details of FMG's renewable energy program

Fortescue to invest another $1 billion in renewables, green hydrogen after windfall profit

Fortescue Metals to invest another $1 billion in its renewables division, and will push customers to tackle their 250 million tonne emissions footprint.

reneweconomy.com.au

 

[basilio]

This is another of FFI projects. Appears to have grown another leg.

Sun Cable: World’s biggest solar and battery project is about to get a lot bigger

Sun Cable is to announce a significant expansion to what is already the world’s biggest solar and battery project, and will deliver first output to Darwin in 2026.

reneweconomy.com.au

The Sun Cable project, backed by billionaires Mike Cannon-Brookes and Andrew Forrest, started out as a 10GW solar project in 2019, before increasing its planned capacity to 14GW, as well as between 20 and 30 gigawatt-hours of battery storage.

...Griffin wouldn’t say so, but the expansion and the mention of load profiles suggests that green hydrogen and/or green ammonia could be part of that expanded plan, given the massive push – by Forrest, in particular – towards green hydrogen as the major new component of green industry in the coming decades.

Forrest has spoken of his ambitions to have 20 million tonnes of green hydrogen production by the end of the decade, an amount that would require tens if not hundreds of gigawatts of renewable energy projects.

 

[divs4ever]

indeed , definitely NOT hiding in the bunker with the hard hat on ,

i would have expected him to have a little cash on the side in case a tasty morsel popped up

but he has been making it happen so far , and that is better than many companies

the flip-side is a get a better div. than expected , i guess it is up to me to park that money wisely , now

 

[basilio]

i would have expected him to have a little cash on the side in case a tasty morsel popped up

Divs Twiggy has more cash than Croesus. He swims in the stuff.

Facts are that FMG is in the market for truly big renewable energy/green industry projects. Talking of nation building projects here. A number have already been highlighted on ASF. Congo, Indonesia, Sun cable etc.

Any "smaller morsels" ie less than nation building are too small for FMG. Makes total sense when one consider that there is finite management and engineering capacity and FMG would therefore focus on big projects.

However the small tasty fish can be gobbled up by Twiggys private business consortium. Essentially he has taken his billions of dividends and is always looking around for opportunities . And of course there is an opportunity for public shareholders in these enterprises as well. The holding company is Tatterang

Tattarang

Tattarang strives to make the world a better place. We focus on gender equality, consider social and environmental impact, invest in decarbonising the economy and work to feed the world. We deliver premium, sustainable products and experiences that offer the best of Australia.

www.tattarang.com

 

[Smurf1976]

Sure, but they already had the chile mine BEFORE they had the U.S one. Why not just dig another one in chile? It was clearly the better option.

Right?

The new mine is a new investment and the decision will reflect circumstances prevailing at the time.

There's countless examples of "big" projects such as mines, factories and so on that would never be built today but, since they already exist, will operate until the ore runs out or the factory ceases to be profitable and then it's over. At the time they were originally built they seemed like the best option and in many cases they were indeed the best for many years thereafter but they're not now.

As of right now Rio Tinto seems to have concluded that the US is a better option than expanding in Chile. Simple as that. The Chile operation remains because it's already built and can't be unbuilt, the capital can't be recovered and with that considered a sunk cost it's profitable to continue but that doesn't automatically make it the best option for new investment.

Just about everyone does a small version of that in their own life. There's countless things most people own that they continue using because they already have them but no chance they'd buy the exact same product new today.

 

[over9k]

Oversimplified insights from someone who has an extremely pessimistic view of China from memory. You could've posted the same thing 20 years ago when there was minimal Chinese demand and said that it was going to be going nowhere. It is misleading and taking into your own political persuasions and emotional charges biases. This is evidenced in the times you accused me of being a China fanboy when I simply questioned your logic.

You need to understand the value of iron ore. Not iron ore demand. Iron / steel is valuable from the PoV of elements in the soil of Earth and in terms of its place on the periodic table. It is used to build buildings taller than a couple of stories and is used for cars, machinery, utensils etc. For what it does and it's intrinsic chemical value, a kg of iron is a bargain.

I bought in at $1.70. There were haters then who said $2 was too much. Now $20 is too little

Are you that crank that was carrying on like an utter loon over in the china thread?


I don't even know where to start with what you've posted. Literally every single thing you said is wrong. I would have to write an essay to explain why on every point.

Maybe start with the fact that what I've asserted is not unique to china and work your way out from there. My point, like with value collector, has clearly gone clean over your head.

Emotion has nothing to do with it. I don't even know what you're basing that assertion on.



I'll try this REAL simple for you guys: There are some products which depend on expansion in order to sell. Buildings, for example. There's no need to build houses if there's nobody to live in them (no demand for them) is there?

If you have a baby bust, you no longer have expansion. You have to sell (export) your stuff to someone else. Japan and south korea have been doing this very well with cars etc for quite some time. But if someone else has a baby bust too, there's nobody left to sell to overseas, and nobody left to sell to (no expansion) within your borders either.

In short, your markets literally no longer exist on account of having never been born.

This is the same question of why a nightclub owner might be concerned about a lack of 18-25 year olds or gerry harvey selling furniture worrying about 25-35 year olds but taken to a macro level. When your target market was literally never born, your target market thus no longer exists. Demand for your product drops.


This alone is a big problem for an economy, but it doesn't happen in a vacuum. Old farts are expensive. In fact, the more old farts:young people your economy has, the more deadweight it has. Those old farts have to be paid for by the young if a nest egg (sovereign wealth fund) is not put away in the decades prior, which, news flash, it hasn't been.

This means that, if you haven't been saving the money, you have to start doing things like raising taxes on the young in order to pay for the old. This reduces the amount of demand from the young (the people who do the overwhelming majority of the buying of the stuff) even further.


This is not unique to china, I just bring it up in this context because of the amount of rocks/dirt that china buys.

What you guys should be thinking is "Why would the chinese keep buying it? What would they be making with it? Who would they be selling whatever they make with it to?"

If you can't answer those questions, you should be very very worried.



It is abundantly clear that neither of you have any kind of actual background in economics whatsoever. You're those "self taught" types that think they know better than those who have spent several years being trained in something.

You don't.

 

[over9k]

The new mine is a new investment and the decision will reflect circumstances prevailing at the time.

There's countless examples of "big" projects such as mines, factories and so on that would never be built today but, since they already exist, will operate until the ore runs out or the factory ceases to be profitable and then it's over. At the time they were originally built they seemed like the best option and in many cases they were indeed the best for many years thereafter but they're not now.

As of right now Rio Tinto seems to have concluded that the US is a better option than expanding in Chile. Simple as that. The Chile operation remains because it's already built and can't be unbuilt, the capital can't be recovered and with that considered a sunk cost it's profitable to continue but that doesn't automatically make it the best option for new investment.

Just about everyone does a small version of that in their own life. There's countless things most people own that they continue using because they already have them but no chance they'd buy the exact same product new today.

I've never said otherwise. What I keep alluding to is why. It is the same reason why multi-billion-dollar car and chip manufacturing companies have literally dozens of multi-billion-dollar new manufacturing plants planned/approved/under construction in the USA & mexico rather than, say, china, which was the place that absolutely everyone wanted to be in previous years.

There is a reason.