FMG - Fortescue Ltd

dat111 said:

Renewables are currently more expensive than fossil fuels unless the government is involved.... That is one of the reasons China is kicking the rest of the worlds buttocks

Click to expand...

Yes I know, but the penny hasn't dropped with many.
However whether you or I like it, it is the trajectory the media has decided Australia will take, so whether it is sensible or logical is a mute point.
That is the thing with investing, you have to see where the herd is being taken by the nose and get there first.
Cheers.

divs4ever said:

China if it wanted to , can buy plenty of weapons grade uranium from Russia as it decommissions it's old nuclear missiles

previously Russia was selling it to the US , but as far as i know the deal has been can

Click to expand...

kennas said:

All the nuclear waste ever produced could be stored on a footy field. It's one of the only forms of energy (maybe the only) where the waste is fully contained and does not get into the environment.

Finland have a good plan for storage that is a good model. Plenty of countries would have the right geological setting to copy this.

Click to expand...

Not true...There is low-level waste, transuranic waste and high level waste. Look at the Waste Isolation Pilot Plant in New Mexico, Nevada Test Site for low-level waste and also what was planned for high level waste at Yucca Mountain also in Nevada. Those were the three government run repositories for radioactive waste not including Department of Defense and Department of Energy facilities. There are also private disposal facilities in the US for low-level waste.

sptrawler said:

Yes I know, but the penny hasn't dropped with many.
However whether you or I like it, it is the trajectory the media has decided Australia will take, so whether it is sensible or logical is a mute point.
That is the thing with investing, you have to see where the herd is being taken by the nose and get there first.
Cheers.

Click to expand...

Perfect post to respond to:



So is this actual forecast or market manipulation?

Thing is, either MS expects the market to drop (and thus have positioned in expectation of it) or they are trying to make it drop (because they have positioned in the hopes that it will).

Either way, bad juju.

It isn't really rocket science, it has become a pizzing game, the U.K, U.S has decided China is going to become the major player.
The problem China has is it is dealing with a very wobbly over extended population, the difference between the lower class and the upper class, is 1,000,000 times worse than the U.S.
So the haves and the have nots are really becoming obvious, and why the crackdown on the mega rich, an interesting dynamic that could turn sour for China, if not controlled.
So now we are entering a phase where China wants to control its inputs, eg the price of production (raw materials), to do that they have to become less dependent on them, so we as investors have to make money from that. ?
The key to investing, is not to be emotional about it.
Most of my bad decisions, regarding investment, have been emotionally driven.
e.g bought 2,000 CSL at $27 and sold them not long after because I had to retire and thought I might need the cash, sold at $30.?
Have a plan based on the reason for buying the stock, stick to the plan, review the plan and only dump the plan when it turns to poo.
Which is what really good chartists do. lol
My rant for the month, stressful family issues.

For the technical traders:


The 50DMA's have just been busted, 100DMA up next.

R2K already through the 200DMA and still dropping.

Even gold has sold off.

basilio said:

I think we could easily see a continuing drop in iron ore prices as Evergrande unwinds and there is an immediate impact on the construction industry in China. The next question will be "what will be the real demand for steel in China and around the world "? In the end we still need steel and iron ore. It will come back to best value producers and marketing connections with buyers.

One of FMG's skills is directly dealing with Chinese steel mills to make iron ore mixes specifically for their needs. (It's possible other companies have similar relationships. )

It does come back to the dollars. At $100 a ton FMG is still very profitable. VC calculated earlier that selling ore at $60 a ton would yield 69c dividend per share. At $14 a share that is a 5% yield. Not brilliant but not shabby.

Dividends would be around $0.69 if Iron Ore averaged $60 for 12 months. post 3714

Click to expand...

Yep. Evergrande impacting FMG is a long shot imo.
FMG <- China Buying Iron Ore <- Construction industry <- Evergrande.

Each one of these links is not a strong link IMO.
Evergrande is just one of many property developers. Others will gladly pick up the slack they've left.
Construction industry crash does not mean Iron Ore crash (or low iron ore demand from China)
Iron Ore crash does not mean FMG as a company is in the sh*tter as long as their cost/t is low and competitive

Oh dear, it's getting worse:



Dow at -2 and still going.


At least BTU seems to have found some kind of a bottom:



But still miles off its peak:

sptrawler said:

Yes I know, but the penny hasn't dropped with many.
However whether you or I like it, it is the trajectory the media has decided Australia will take, so whether it is sensible or logical is a mute point.
That is the thing with investing, you have to see where the herd is being taken by the nose and get there first.
Cheers.

Click to expand...

sptrawler said:

Yes I know, but the penny hasn't dropped with many.
However whether you or I like it, it is the trajectory the media has decided Australia will take, so whether it is sensible or logical is a mute point.
That is the thing with investing, you have to see where the herd is being taken by the nose and get there first.
Cheers.

Click to expand...

The penny will never drop in China... If you haven't noticed they are quadrupling down on coal fired power plants... and laughing at the rest world who believe they can solve climate change... Climate change cannot be fixed as long as the rest of the world is willing to transfer their manufacturing to other countries...

dat111 said:

Climate change cannot be fixed as long as the rest of the world is willing to transfer their manufacturing to other countries...

Click to expand...

So far as FMG is concerned though what matters is that there's a market for their hydrogen and iron ore and it's profitable.

Probably 90% of all things sold arguably don't make sense in one way or another but if there's a buyer at a profitable price well that's what matters so far as the supplier is concerned.

Morning
Ready for some climatic action.
Buckle up your Superfunds.

tech/a said:

Morning
Ready for some climatic action.
Buckle up your Superfunds.

Click to expand...

thanksfully was done a week ago, FMG is really a canary in the mine, and in a way, a very useful one

sptrawler said:

It isn't really rocket science, it has become a pizzing game, the U.K, U.S has decided China is going to become the major player.
The problem China has is it is dealing with a very wobbly over extended population, the difference between the lower class and the upper class, is 1,000,000 times worse than the U.S.
So the haves and the have nots are really becoming obvious, and why the crackdown on the mega rich, an interesting dynamic that could turn sour for China, if not controlled.
So now we are entering a phase where China wants to control its inputs, eg the price of production (raw materials), to do that they have to become less dependent on them, so we as investors have to make money from that. ?
The key to investing, is not to be emotional about it.
Most of my bad decisions, regarding investment, have been emotionally driven.
e.g bought 2,000 CSL at $27 and sold them not long after because I had to retire and thought I might need the cash, sold at $30.?
Have a plan based on the reason for buying the stock, stick to the plan, review the plan and only dump the plan when it turns to poo.
Which is what really good chartists do. lol
My rant for the month, stressful family issues.

Click to expand...

hope you will be ok, stressful times on all subjects

Have exposure in superfund self managed
Only a portion in Stock rest in property and cash.
a bit in my discretionary trades

sptrawler said:

Just a quick question @basilio , wouldn't that equation depend on how much ore you sold, as well as what price it is sold for?

Click to expand...

True. As I said I was re quoting VC. My guess is he assumed similar ore tonnages sold as previously. Other important factors would be the US dollar rate.

These figures come from the March 2021 Financial statements.

• Average revenue of US$143/dry metric tonne (dmt) increased 17 per cent compared to the previous quarter with revenue realisation at 86 per cent of the average Platts 62% CFR Index

• C1 cost of US$14.90/wet metric tonne (wmt) increased 16 per cent compared to Q2 due to seasonally lower volumes and the strength of the Australian dollar, with year-to-date C1 cost of US$13.45/wm

Pretty soft I think.
My Discretionary portfolio is green
(Was Bleeding yesterday)

Stockhead offers an analysis of the iron ore market. Covers a range of suppliers and scenarious.

China pushed iron ore below US$100/t and took the ASX resources sector with it. When will we hit the bottom?​

Investors in iron ore companies who’ve seen prices tumble from record highs to under US$100/t could be in for more pain in the coming months as the rout intensifies for Australia’s most valuable commodity.

But opportunities could emerge after a six-month window as steel factories end their buyer’s strike and Chinese customers restock on Australia’s prized Pilbara dirt

With regard to FMG's new direction. Twiggy came out with all guns blazing at the Clean Energy Council meeting last month. IMV made a lot of sense with regard to

1) The urgency around moving to renewable energy
2) The effectiveness of having a high stretch target to put a rocket under business , Governments and the community
3) Calling out the BS around "Blue Hydrogen"


Pic: Clean Energy Council/FMG

Green Energy: ‘Clean hydrogen like healthy smoking’ says Andrew Forrest as Fortescue expands green hydrogen ambitions​

Andrew Forrest has launched a searing attack on the oil and gas sector and Australian Government’s favoured low emissions technologies, hinting a national net zero target is needed to galvanise the energy sector to take real action on climate change.

He has also accused energy companies of using colour coded hydrogen as a ‘smokescreen’ to keep their oil and gas assets in production as the world shifts towards renewables.

“Blue, yellow, pink, grey hydrogen is not renewable green hydrogen, they are made from fossil fuels, and studies now confirm they are more carbon emitting than if they were simply burnt as fossil fuels,” he said, comparing technologies favoured by the Morrison Government like blue hydrogen and carbon sequestration as being like ‘healthy smoking’.

“That is why the fossil fuel sector has quickly flipped to using a colour code and the new term `clean hydrogen’, this has as much accuracy as ‘clean coal’ or ‘healthy smoking’ — and don’t get me started on the smokescreen of sequestration,” he said.

“The most recent argument that hydrogen made from fossil fuel — where carbon emissions have attempted to be sequestered buried in the ground — is the new green is false.”

“Regardless of the success of sequestration – it normally fails – there are huge carbon emissions emitted in its process anyway. If it’s not renewable green don’t be fooled by any other coloured spin.”

In his wide-ranging keynote speech for the Clean Energy Council this morning, the Fortescue Metals Group founder said his new Fortescue Future Industries arm has set an ambitious target to become a hydrogen production and export powerhouse by producing 15Mtpa of green hydrogen by 2030 and ramping up to 50Mtpa.

That would make FFI comparable, Twiggy said, to some of the world’s biggest oil and gas companies.

He said driving the investment to reach “net zero” in Australia would require ambitious ‘stretch targets’ like those employed at FFI, suggesting a national direction was needed to galvanise industry to act.

“Net zero for Australia is simply one big project, a compilation of national and State projects driven by businesses who are most motivated,” he said.

“To crystallise that motive the nation needs a target.

“While renewable green hydrogen is not the only answer to get us there, it will make the biggest difference and allow the Australian Government to confidently state a national target of 2050 net zero.

“Giving us that target allows success to be driven by business and I, for one, will work tirelessly to lead that change.”

Forrest said Australia had a big opportunity to grab a share of a hydrogen market which could be as big as US$12 trillion by 2050, dwarfing the scale of its $150 billion a year iron ore export industry.

He's copying adani:



I've been saying for a while that a pivot to india has been on the cards. This renewable energy etc stuff is how he's doing it.

Why do you think he bought all the land @frugal.rock mentioned where he did?

See:



There's plenty over in QLD etc but nope, he bought the rights on the W.A coastline.

Twiggy is actually quite a bit behind adani energy on this, but that doesn't mean his head isn't still well & truly in the game.



Iron ore to china isn't the future, but coal to china and whatever india wants to india IS

Twiggy probably looked at all the help Adani got in QLD and decided WA has a better place to start from , in his pursuit of renewables and energy innovation , but of course he may have talked the Peter Bond , or Clive Palmer and just got a basic feel of political risk on the East Coast

over9k said:

Twiggy is actually quite a bit behind adani energy on this, but that doesn't mean his head isn't still well & truly in the game. ???

Click to expand...

Not sure about these points Over9K

1) When I checked out the net it seems that Adanis big announcement was literally just made today. Twiggy flagged this comprehensive new renewable energy program from mid 2020. The company infrastructures are developed. The short and longer term strategy plans are in place. He spent most this year looking for suitable international projects and partners and focused FMG's engineering team on a range of renewable energy projects that would be integrated into his current iron ore activities.

2) The rationale behind the focus on WA for renewable energy is because he intends to integrate them into his iron ore business. Bit hard to do that from Queensland. That doesn't mean he isn't interested in doing projects elsewhere in Australia. There just has to be a good business partner in the deal.

I'm pretty cautious about Adani as well. I think that have a lot of baggage in terms of dodgy governance and capacity to execute plans.

https://www.fmgl.com.au/ Check out Climate Change report